Shares of Page Industries Ltd rose nearly 7% on the National Stock Exchange in opening deals on Friday. The Street has given a thumbs up to the company’s Q4FY22 earnings performance. revenue at 1,111 crore and operating margin exceeds consensus estimates at 24% 1,061 crore and 20.5% respectively.
In a post earnings conference call, management said that sales growth in Q4 was strong across product categories and sales channels. Growth was driven by its retail expansion and introduction of new products. In Q4, it saw volume growth of 7% and 28.9% in FY22. In terms of number of units, it sold 50 million pieces in 4Q versus 46 million in the same quarter last year. Management said the outlook remains strong and reiterated its target of achieving $1 billion in sales by FY25-26.
That said, cost inflation remains a headwind for the company in the near future. Page Industries hasn’t hiked prices since its 8% price hike in December.
However, the management will closely monitor the raw material position and further hike in prices will depend on the same. Note that management aims to maintain EBITDA in the range of 20-22%. Ebitda is short for earnings before interest, taxes, depreciation and amortization.
According to analysts at Yes Securities Ltd, the company’s margin performance was helped by growth of 5% in Q1 and 8% in Q3 but it may be difficult to maintain the 4Q margin level considering further rise in yarn prices . However, the domestic brokerage house is of the view that continuing premiumization across all product segments could lead to a 21-22% increase in margins.
Similarly, analysts at Emkay Global Financial Services Ltd said that unlike peers, the company was able to negate the raw material spike through an almost 15% hike in price pre-Covid versus 30% lower by peers. “While raw material pressure remains in place, Page Industries expects to remain in the 20-21% EBITDA margin range of 20-21% on the back of inventory stocking (now 92 days vs 72/89 days FY21/FY20),” the Emkay report said. Is.”