On the charts, Page Industries’ relative strength index (RSI) stood at 61. An RSI reading above 70 indicates that the stock is in overbought territory.
Nearly 36% of the 22 analysts that have coverage on Page Industries have maintained their ‘Buy’ recommendation on the counter after its September quarter earnings. The stock has also received its highest projected price target of ₹54,000 per share in the next 12 months.
That price target came from brokerage firm Motilal Oswal, that has also upgraded the stock to ‘Buy’ from its earlier rating of ‘Neutral’. The price target implies a further upside of 20% from the stock’s closing levels on Thursday.
What analysts say on Page Ind
Motilal Oswal
The Page Industries stock has underperformed massively for the last two years (down 15%) owing to weak volume growth. With volume growth pressure bottoming out and benign input costs likely to lead to a better margin print, Motilal expects the earnings cycle to pick up from hereon.
The brokerage believes the valuation will remain rich, as it can find only a few consumer stocks with comfort on both growth and margin in the near term.
With Page’s strong execution history and a large market opportunity, Motilal expects an uptick in the earnings cycle and also expects valuation to see a quick re-rating.
The brokerage has increased its earnings per share estimates by 5% and 3% for FY25 and FY26 on account of an improvement in volume growth assumption and higher margin.
It expects demand improvement to continue in the second half of FY25. Motilal estimates a CAGR of 13%, 17%, and 19% in sales, EBITDA, and profit over FY24-27E.
Emkay
Emkay in a note said the company’s revenue growth returned to double-digits, but is likely to have been led by a favorable festive shift and low base – reflected in the uncertain commentary.
Page attributed its stronger margins to better employee and asset utilisation, but expects EBITDA margin to stay in the 19-21% band, with expected IT investments in the second half. Encouragingly, channel inventory is down by 3 days in H1 to 40, and Page expects to completely bridge the gap between primary and secondary growth by FY25-end.
Emkay remains conservative on uncertain trends – retaining ‘Reduce’, and a price target of ₹39,000 per share.
Nuvama
Page reported an uptick in growth in Q2, driven by an increasing share of e-commerce, in particular quick commerce’s contribution. EBITDA margin improved driven by cost-optimisation initiatives.
Given improving growth prospects for the company combined with margin efficiencies that management has projected, Nuvama has revised
up the target P/E (price-to-earnings) from 48 times to 55 times, which has been Page’s long-term
average.
“With growth picking up across channels and positive momentum throughout festive season, we believe the worst is behind for Page,” the brokerage said.
The recent run-up captures revenue growth as well as margin improvement and, hence, Nuvama has maintained its ‘Reduce’ stance on the stock. However, the brokerage has upped its price target to ₹42,803 from ₹33,326 earlier.
Citi
The global brokerage firm has kept its ‘Sell’ rating unchanged but has raised the target price from ₹33,100 to ₹35,800 per share.
Cost control measures contributed to year-on-year EBITDA and PAT growth of 21% and 30%, respectively.
Volume growth at 6.7% YoY fell short of its 8% forecast.
Consumer sentiment shows little improvement.
Citi remains cautious due to the absence of short-term catalysts.
The foreign brokerage has increased its FY25-27 earnings per share estimates by 4-7%.
Page Industries Q2 update
Page Industries reported a Q2 earnings beat, driven by strong margin execution. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter rose by 25.6% to ₹296 crore, while EBITDA margin saw an expansion of over 250 basis points to 23.5%.
Page Industries reported 6.7% growth in overall volumes for the quarter, compared to expectations of 5.7%.
The company saw a 30.5% growth in its net profit from the same quarter last year to ₹195.5 crore.
Revenue came in at ₹1,246 crore, a growth of 11% from the same quarter last year.
The management attributed the margin performance to focus on operational efficiencies, cost control and strategic sourcing initiatives.
Out of the 22 analysts that have coverage on Page Industries, 8 of them have a ‘Buy’ rating, while five of them have a ‘Hold’ and 9 say ‘Sell.
Shares of Page Industries Ltd. are currently trading 6.07% higher on Friday at ₹47,801.00. The stock has risen 23% so far in 2024.
