Page Industries Q2 Review — Weak Demand Weighs On Growth; Systematix Maintains 'Hold', Trims Target Price

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Systematix Report

Page Industries Ltd. reported muted performance in Q2 FY26. Revenue/ Ebitda/ PAT growth stood at 3.6%/ -0.7%/ -0.3% YoY respectively. Volumes grew 2.5% YoY to 56.6 million pieces.

Consumption remained subdued through most of the quarter. However, with the start of the festive season company did see a good uptick in primary sales during later half of September.

The GST rate rationalization in September also had a positive rub off on consumer sentiments. Company has passed on the rate benefit to consumers as applicable.

Gross margin improved 345 bps YoY to 59.9%. Gross margin improvement was attributed to stable raw material prices.

Moreover strategic inventory build up helped mitigate potential price volatility. Ebitda margin declined 93 bps YoY to 21.7% led by higher employee cost from capacity expansion and salary increments. Moreover marketing spends too were on the higher side in Q2 FY26.

Adjusted PAT declined 0.3% YoY to Rs 1.95 billion. Company launched a new product line with bonded technology in men's innerwear and bras in Sept 2025.

The initial consumer response has been encouraging. Modern retail including ecommerce continued to do well. The Auto Replenishment System continues to improve the health of inventory at the distributor network resulting in better secondary order fulfilment.

Moreover, network consolidation and rationalization is giving impetus to higher return on investment.

Consumer demand remained subdued in H1 FY26.

The improved margin performance in H1 FY26 was led by stable raw material, and running a tight ship on costs, and it still intends to increase essential spends on marketing, distribution especially on D2C, EBOs and product innovation, given still low penetration rates across segments and markets.

Soft raw material prices should also drive some volume and margin recovery as there is no imminent need of a price hike.

Page Industries expects margins to remain in the range of ~19-21% moving ahead. Inventory health and ROIs of channel partners should improve further after healthy improvement since the implementation of auto replenishment system helping control distributor attrition.

The rising competition in the innerwear and athleisure categories remain a concern, in our view.

Over FY26-28E, we have trimmed our revenue estimates by 6- 11% and PAT estimates by 10-15%.

We have projected operating margins of 21.7%/ 20.5%/ 20.2% for FY26E/ FY27E/ FY28E respectively.

We have build in revenue/ Ebitda/ PAT CAGR of 10.4%/ 8.1%/ 6.9% over FY25-FY28E.

We maintain our Hold rating with a revised target price of Rs 41,881 (Rs 46,626 earlier) based on 55x Sept 2027 EPS, a 10% discount to PAG’s long-term valuation multiple of ~60x.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.