Page Industries - Q4FY20 First Cut - ICICI Securities

(CMP: Rs. 19146, MCap: Rs. 21355 crore)

Page Industries reported a weak set of results wherein numbers came in below our estimates across all parameters. The results for the quarter were materially impacted by Covid-19 owing to temporary store closures from mid-march onwards across India.

Q4FY20 Earnings Summary

- Revenue for the quarter de-grew 11% YoY (vs. estimate of 7.2% de-growth) to Rs. 541.3 crore mainly owing to volumes declining 18.7% to ~ 30 million pieces. The company was unable to execute confirmed orders worth Rs. 90.0 crore

- Gross margins declined 476 bps YoY to 58.8% (I-direct estimate: 58.0%). We believe higher share of outsourced goods would have led to significant contraction in gross margins. On the opex front, employee expenses grew 8% YoY to Rs. 134.4 crore, while other expenses de-grew 3.7% YoY to Rs. 137.3 crore. Owing to negative operating leverage, EBITDA margins contracted sharply by 1100 bps YoY to 8.7% (I-direct estimate: 13.0%). Absolute EBITDA de-grew 61% YoY to Rs. 46.9 crore

- Higher depreciation (up 11% YoY) and lower other income (down 50% YoY) further impacted profitability. Ensuing PBT declined 68% YoY to Rs. 37.7 crore. PAT for the quarter came in at Rs. 31.0 crore (I-direct estimate: Rs. 47.6 crore)

- Despite loss in revenues, better working capital management translated to NWC days coming down by nine days to 89. The company generated healthy CFO worth Rs. 476 crore (vs. Rs. 229.7 crore) with FCF of Rs. 400.0 crore. Page continues to be a virtually debt free having cash balance worth Rs. 117 crore as on FY20

- As on date, 89% of EBO outlets (677) and 64% LFS touch-points (1290) are operational. The company is witnessing encouraging signs post partial lifting of lockdown, with athleisure segment witnessing strong demand. Post lockdown relaxations, share of revenues from e-commerce space have risen sharply to 10% (vs. 4% in FY20)

We would be coming out with a detailed report soon.

Shares of PAGE INDUSTRIES LTD. was last trading in BSE at Rs.20929.95 as compared to the previous close of Rs. 19169.5. The total number of shares traded during the day was 7242 in over 3145 trades.

The stock hit an intraday high of Rs. 21176.65 and intraday low of 18999. The net turnover during the day was Rs. 149191380.

Source : Equity Bulls

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