Page Industries Q3 Review - Dolat Capital Downwards Rating To 'Reduce', Lowers Target Price — Here's Why

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Dolat Capital Report

Page Industries Ltd.'s Q3 FY25 revenue was below, while Ebitda/adjusted profit after tax were in line with our estimates. Revenue/Volume grew by a mere 7.1/4.7% YoY due to subdued demand conditions. Further, management is optimistic about a significant pickup in growth rate once the industry revamps, given its dominant position in the market.

Gross margin expanded by 330bps YoY in Q3 FY25, led by lower raw material costs. Moreover, Ebitda margins expanded by 460 bps to 23.0% on account of operational efficiencies, cost control and strategic sourcing initiatives. Ebitda margins are expected to remain in 19-21% range.

In order to factor in Q3 performance and management guidance of 19-21% margins in the long run, we have upward revised our FY25E EPS estimates by 4.1% at Rs 624 but downward revised FY26/27E EPS by 0.3/1.5% at Rs 730/845.

A favorable base and anticipated increase in volumes should help to maintain Ebitda margins within range. Valuing the stock at 58x FY27E EPS we arrive at a target price of Rs 49,023 (Rs 49,777 earlier). Considering the recent run up in the stock price, we have downward revised our rating to ‘Reduce’

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