Analyst Concall
Page Ind retains EBITDA margin target for FY25 at 19-21%
This story was originally published at 21:17 IST on 5 February 2025
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--Page Ind: EBITDA margin target for FY25 remains 19-21%
--CONTEXT: Comments by Page Industries' mgmt in post-earnings analyst concall
--Page Ind: Scope to bring down inventory in athleisure
--Page Ind: Don't expect any increase in raw material prices going forward
--Page Ind: Don't see significant change in gross margin in FY26
--Page Ind: Current expansion plans enough to meet growth for next 3 years
--Page Ind: Aim for equal revenue flow from all pdt categories in next 5 yrs
By Akshita Kumar and Narayana Krishna
MUMBAI/HYDERABAD – Page Industries Ltd. Wednesday retained its earnings before interest, tax, depreciation, amortisation margin target in the range 19-21% for 2024-25(Apr-Mar). During market hours Wednesday, the company reported an EBITDA margin of 23.0% for the December quarter, up 450 basis points on year.
The company said there are some other expenses planned for marketing, which may have an impact on margins. It is currently preparing its budget for next fiscal and thinks that 19-21% is the comfort zone going forward.
The company reported a net profit of INR 2.05 billion for the quarter, up 34% on year, driven by consistent revenue growth and control over operating expenses. Its top line for the quarter was INR 13.13 billion, up 7% on year.
The management said the company's inventory levels are already at the optimum level and believes there is still scope to bring down the inventory in the athleisure space. The inventory levels are in a much better shape now than they were at the start of the year, it added.
The company said it does not expect any major upward movement in raw material prices in the near future. The company's raw material prices have softened on a year-to-year basis. For Oct-Dec, the company's raw material costs fell 5.8% on year to INR 2.69 billion.
The management also said it does not expect any significant changes in its gross margin in 2025-26 (Apr-Mar). When asked about expansion plans, the management said the company has two plants coming up in Mysore and Odisha, and that there is enough to meet growth for the next three years.
The organic growth will have to rely to an extent on the market picking up and consumer trends, the company said. The expansion plans were in line with what's always been there and how aggressive the company had been over the past four to five years, whether it is with exclusive brand stores or multi-brand store expansions, the management said.
The company aims for equal revenue flow from all its product categories in the next five years. Currently, men and women innerwear category is the lead revenue contributor for Page Industries, followed by multi-brand retail and new-age trade channels like e-commerce. The company said that irrespective of what growth rates it delivers from its categories, it does not see a big change in EBITDA because of its product mix.
Wednesday, shares of the company closed at INR 45,795.15 on the National Stock Exchange, down 2.4%. End
Edited by Deepshikha Bhardwaj
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