Page Industries needs sustained growth to support rich valuations

Page is the exclusive licensee of Jockey International Inc. (USA) for manufacturing, distribution and marketing of the brand in India, and a few other countries.

For the full year, Ebitda margin rose 271 bps in FY25 to 21.5%. Still, Page’s management is being measured in setting expectations for the future, keeping Ebitda margin guidance at 19-21% in the coming quarters. This is when it isn’t looking to raise prices, and neither does it anticipate an increase in raw material cost in the near future. However, it sees cost pressures such as salary increases and investments in IT, keeping the margin within the guided range.

For now, the strong margin show has helped Page clock higher profit growth than revenue growth. FY25 net profit increased 28% to ₹729 crore, while revenue grew 8% to ₹4,935 crore. In Q4FY25, net profit increased sharply by 51% year-on-year to ₹164 crore, while revenue increased at a far slower pace of 10.6% to ₹1,098 crore, aided by volume growth and realization/mix.

Q4 revenue growth marks a return to double-digits after the 7% and 11% growth seen in Q3 and Q2, respectively. According to Page, consumer demand growth remained muted through most of FY25, but encouraging signs of recovery emerged in the second half. The company said growth was more pronounced in tier 2 and tier 3 cities, outperforming metro and tier 1 markets.

Amid this, Page managed to clock 8.5% volume growth in Q4, which is the best in the past few quarters. Innerwear, along with accessories like socks, handkerchiefs, towels, and caps, grew faster than athleisure. The management attributes this largely to inventory levels in the channel. Volume increased 5.5% in FY25 and Page is targeting a high single-digit growth in FY26.

Focus on Jockey

The company continues to focus on its reach with flagship brand Jockey available in nearly 1,11,000 multi-brand outlets and 1,453 exclusive brand stores at FY25-end. The Odisha plant is set to be operational by June. Page expects a capital expenditure of about ₹180 crore in FY26, which will be mainly for an expansion of the KR Pete plant and purchasing more land in Odisha and usual upgrades.

To be sure, consumer sentiment can improve meaningfully in FY26 amid tax exemptions, expectations of a bountiful monsoon and low retail inflation. “Inventory optimization through the ARS (auto replenishment system), new product launches, capacity expansion, and digitalization initiatives will support growth, in our view," said analysts from Motilal Oswal Financial Services. “We model an Ebitda margin at the higher end of the guidance at about 22% for FY26-FY27 (there is still upside risk due to strong gross margin recovery)," they added.

Having said that, Page’s stock trades at rich valuations, suggesting investors are capturing a good share of the brighter prospects, unless of course, growth recovery turns out to be better-than-expected. The stock trades at 65 times estimated FY26 earnings, showed Bloomberg data.

Stiff competition in the innerwear and athleisure categories is a sore spot. “While recovery trends are encouraging, sustainability of demand improvement and consistency in growth execution remain key monitorables," said an ICICI Securities report.

According to the broking firm, downside risks include underperformance of men’s innerwear segment and sharper-than-expected raw material inflation; whereas faster-than-expected recovery in volume would be an upside risk.

Also Read: Page Industries sees uptick, but growth hurdles persist