The brokerage has a price target of ₹41,450 per share on the stock, which implies a potential downside of nearly 8% from Thursday’s closing levels.
A lack of growth drivers
According to HSBC, Page Industries lacks growth drivers. While the past decade has seen significant market share gains for Page Industries in men’s innerwear and the scaling up of the women’s and athleisure segments, HSBC expects growth to moderate.
The market share expansion in men’s innerwear is moderating, given Jockey’s high penetration rate and increasing competition from smaller rivals. In women’s innerwear, Page’s conservative approach in terms of limited inventory and styles has created space for other brands to scale up, grow faster, and gain market share
Page’s most promising segment, Athleisure, saw a spurt in growth during the Covid-19 pandemic, but the brokerage doesn’t think this will be sustained as its collections lack depth and clear positioning.
The brokerage expects Page’s overall FY25-28 revenue growth estimates to slow to a CAGR of 10%.
As highlighted by HSBC, Page’s topline growth will moderate as all three segments are missing drivers, unlike the past when at least one of the segments achieved above-average growth.
HSBC’s profit estimate for FY27e is 6% lower than Bloomberg consensus.
The brokerage values Page Industries at a P/E (price-to-earnings) of 50x, lower than its 10-year average of 59x, due to slowing revenue growth, which it sees as the main factor driving valuation, given the company’s stable margins, strong cash position, and high RoCE.
The key upside risk, as per the brokerage, is a pick-up in growth, especially in the athleisure segment.
Shares of Page Industries Ltd. are currently trading 0.43% lower at ₹44,680. The stock is down 6% in the last one month.
