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Systematix Report
Page Industries Ltd.'s Q3 FY26 revenue growth was in line with expectations while operating margin and PAT were above expected. Revenue/ Ebitda/ PAT growth stood at 5.6%/ 5.2%/ 9.7% YoY respectively. Volumes grew 1.4% YoY to 58.6 million pieces. Net realization increased by 4%, this growth was due to product mix shift to more premium items and a channel mix shift towards online platforms where the company realizes full MRP as revenue.
Gross margin expanded 159 bps YoY to 57.9%. Ebitda margin declined 10 bps YoY to 22.9%. Employee cost increased 110 bps YoY and other operating expenses grew 59 bps YoY. Adjusted PAT grew 9.7% YoY to Rs 225 crore. Consumer demand remained broadly subdued in 9M FY26. The improved margin performance 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.
For the last few years (~3 years) company has not taken a price increase however company is now monitoring volatile input costs, particularly cotton, and may consider price adjustments if costs increase substantially. Company expects margins to remain in the range of ~19-21% moving ahead.
The rising competition in the innerwear and athleisure categories remain a concern, in the brokerage's view.
Over FY26- 28E, Systematix trimmed its revenue estimates by 6-8% and PAT estimates by 3-4%. The brokerage have projected operating margins of 22%/ 20.8%/ 20.9% for FY26E/ FY27E/ FY28E respectively, and build in revenue/ Ebitda/ PAT CAGR of 7.6%/ 6.5%/ 5.8% over FY25-FY28E.
Systematix maintains Hold rating with a revised target price of Rs 37,748 (Rs 41,881 earlier) based on 50x Dec 2027 EPS, a ~15% discount to PAG's long-term average multiple of ~60x.
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