After the dismal quarterly show, analysts are becoming sceptical about the growth prospects of Page IndustriesNSE 0.41 %, India’s largest branded apparel company which sells the Jockey brand in the country. While rising competition is a major concern, some analysts also expressed displeasure over the company’s accounting policy.
Page Industries’ stock fell by over 10 per cent on Monday after it reported 20 per cent year-on-year drop in the March quarter earnings on flat sales volume.
The management attributed the weak performance to liquidity crunch in the trade channels after the implementation of the Goods and Services Tax (GST). While the management expects volume growth to return to 10 per cent and above, analysts are uncertain over the company’s medium-term recovery amid intensifying competition.
“Our key concern is on the rising competitive intensity... from Van Heusen, which has made a dent in the premium inner wear market in the past two years... In just two years, the brand has crossed Rs 200 crore in revenues, which is 15 per cent of Page’s male innerwear sales,” said Credit Suisse. If Van Heusen ramps up revenues to 30-40 per cent of Page’s male innerwear sales, it can change the dynamics of the segment, which is a near monopoly of Page, Credit Suisse said.
Another brokera ..
The company’s management called out one-offs in the previous year’s corresponding quarter to justify the slowdown in the latest quarter, which did not go down well with analysts. “We find it amusing that even a company like Page would choose to highlight past one-offs (for the first time) to explain a weak current print. Lesser mortals engage in such inconsistent practices. We expect a company like Page to disclose the ‘accretive 4QFY18 oneoffs’ in 4QFY18 itself,” Kotak Institutional Equities sa ..
0 Comments