Revenues jumped by almost 63% year-on-year (y-o-y) to ₹881 crore in Q4FY21—the second-highest for any quarter, according to the company. True, a favourable base helped considering revenues had fallen 11% a year earlier. Even so, the performance is better than expected, helped by a robust performance by the athleisure portfolio.
“For the first time since 3QFY19, Page has reported double-digit two-year average volume growth in 4QFY21," said analysts from Motilal Oswal Financial Services Ltd in a 27 May report.
Needless to say, investors would watch whether the momentum sustains. “While there seems to be a potential recovery to double-digit volume growth, it would still be below the nearly 30% sales CAGR seen over FY08-18," the analysts said. CAGR is compounded annual growth rate.
Earnings before interest, taxes, depreciation and amortization or Ebitda margin contracted by 510 basis points to 19.3%, disappointing some analysts. The sequential drop in margins is due to an increase in staff costs and other expenses. Ebitda margin expanded y-o-y helped by operating leverage.
Margins could well improve from hereon. “We believe Page will tinker with product pricing and ad spends to maintain full-year Ebitda margin around the 21% mark," said analysts from Kotak Institutional Equities in a report on 28 May. In FY21, Ebitda margin stood at 18.6%.
To be sure, Page has put up a strong revenue show in the past two quarters. This has curtailed the y-o-y drop in FY21 revenues to just around 4%, which is commendable given that Q1 was a washout due to the lockdown. The second covid wave is expected to adversely impact near-term financials. “Success of new categories (such as kidswear) and entry into new geographical areas are key to near-term growth," Kotak analysts said.
Investors are likely to look beyond the near-term worries. Kotak has revised down FY22 revenue/earnings per share estimates by 1.5/3.5%, respectively, but has broadly retained its FY23 estimates.
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