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SYNOPSIS

Page Industries Ltd engaged in the

manufacturing, distribution and

Marketing the brands of Innerwear/

leisurewear for men and women in

India, Sri Lanka, Bangladesh, and

Nepal and UAE.

During the quarter, the robust growth

of Net Sales is increased by 38.52% to

Rs. 1542.87 million.

The company has declared & paid three

interim dividends of Rs.5/- per share,

Rs.12/- per share and Rs.10/- per

share on Equity Share value.

The company has awarded sole

marketing & distribution rights from

UAE, & entered into an exclusive

licensing agreement with Speedo

International Ltd.

Net Sales and PAT of the company are

expected to grow at a CAGR of 21% and

20% over 2011 to 2014E respectively.

Years Net sales (Rs. mn)

EBITDA (Rs. mn)

Net Profit (Rs. mn) EPS (Rs) P/E

FY 12 6834.09 1513.89 899.86 80.68 37.19

FY 13E 7859.20 1573.61 934.59 83.79 35.80

FY 14E 8732.72 1704.99 1005.32 90.13 33.28

Stock Data:

Sector: Textiles

Face Value Rs. 10.00

52 wk. High/Low (Rs.) 3266.00/1659.25

Volume (2 wk. Avg.) 3279.00

BSE Code 532827

Market Cap (Rs in mn) 33462.00

Share Holding Pattern

1 Year Comparative Graph

BSE SENSEX PAGE INDUSTRIES LTD

C.M.P: Rs.3000.00 Target Price: Rs.3450.00 Date: June 5th 2012 BUY

PAGE INDUSTRIES LTD

Result Update: Q4 FY 12

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Peer Group Comparison

Name of the company CMP(Rs.) Market Cap. (Rs.Mn.) EPS(Rs.) P/E(x) P/Bv(x) Dividend (%)

Page Industries Ltd 3000.00 33462.00 80.68 37.19 20.18 260.00

Zodia Clothing 194.00 3738.40 5.70 34.04 2.34 50.00

Rupa & Company 140.10 11141.40 5.22 26.84 6.83 100.00

House of Pearl Fashions 78.45 1668.10 2.04 37.75 0.58 0.00

Investment Highlights

Q4 FY12 Results Update

Page Industries Ltd has reported net profit of Rs 170.50 million for the quarter

ended on March.31, 2012 as against 128.71 million in the same quarter last year,

an increase of 32.47%. It has reported net sales of Rs 1542.87 million for the

quarter ended on March.31, 2012 as against Rs 1113.80 million in the same

quarter last year, a rise of 38.52%. Total income grew by 38.06% to Rs 1585.62

million from Rs.1148.53 million in the same quarter last year. During the quarter,

it reported earnings of Rs 15.29 a share.

Quarterly Results - Standalone (Rs in mn)

As At Mar-12 Mar-11 %change

Net sales 1542.87 1113.80 38.52

PAT 170.50 128.71 32.47

Basic EPS 15.29 11.54 32.47

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� Break up of Expenditure

� Declared Payment of Dividend

Page Industries Ltd has declared payment of 1st Interim Dividend of Rs. 10 per

share on an equity share value of Rs. 10 each, and recommend a total dividend of

Rs. 37/- per share (inclusive of interim dividends of Rs. 5 per share, Rs. 12 per

share and Rs. 10 per share) on the paid up equity share of Rs. 10/-.

Company Profile

Page Industries was set up in 1994 with the key objective of bringing the world

renowned brand 'Jockey' to India. Its promoters, Genomal family, had then been

associated with Jockey International Inc. for 44 years as their sole licensee in the

Philippines. It became a public company in March 2007.

The company is located in Bangalore, India are the exclusive licensees of Jockey

International Inc. (USA) for manufacture and distribution of the Jockey brand

innerwear/ leisurewear for men and women in India, Sri Lanka, Bangladesh, and

Nepal and UAE.

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In the early 1990s, when globalization was just unfolding in India, innerwear was a

low involvement category for consumers. There was no organized international

innerwear brand retailed in India. Page Industries Ltd identified this need and

introduced a wide range of quality products for men and women employing modern

global marketing and distribution methods.

The company commenced operations in the year 1995 with the manufacturing,

distribution and marketing of Jockey products. As of the end 2011, the company

employs over 13,000 people with manufacturing operations spread over eight plants in

Bangalore totaling 7,35,000 square feet of space. It commands wide spread pan India

distribution encompassing over 18,000 retail outlets in 1,100 cities and towns and has

revolutionized the innerwear market by launching exclusive Jockey outlets across

India numbering 65 as of March 2011. In August 2008, Page Industries' promoter’s

Genomal family and Jockey International USA celebrated their golden anniversary of

association and both groups renewed their commitment to an even more exciting next

50 years.

In 2005 and 2009, the company was awarded the 'best licensee of the year' by Jockey

International Inc., as recognition for its outstanding achievement in establishing and

strengthening the Jockey brand as a market leader in India.

Page Industries has entered into the new licensing agreement with Jockey

International Inc. up to December 31, 2030. In 2010, the Company bagged the

“International Licensee of the Decade” award for achieving record growth year after

year, offering world class products and maintaining global quality standards across all

operations.

Products

• Men's Innerwear

• Women's Innerwear

• Sport and Leisure

• Thermals

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Financial Results

12 Months Ended Profit & Loss Account (Standalone)

Value(Rs.in.mn) FY11 FY12 FY13E FY14E

Description 12m 12m 12m 12m

Net Sales 4915.62 6834.09 7859.20 8723.72

Other Income 120.95 183.56 198.24 214.10

Total Income 5036.57 7017.65 8057.45 8937.82

Expenditure -4008.18 -5503.76 -6483.84 -7232.83

Operating Profit 1028.39 1513.89 1573.61 1704.99

Interest -52.26 -66.73 -70.07 -73.57

Gross profit 976.13 1447.16 1503.54 1631.42

Depreciation -98.30 -106.22 -118.97 -132.05

Profit Before Tax 877.83 1340.94 1384.57 1499.36

Tax -292.35 -441.08 -449.99 -494.04

Profit After Tax 585.48 899.86 934.59 1005.32

Equity capital 111.54 111.54 111.54 111.54

Reserves 1126.23 1546.44 2481.03 3486.35

Face value 10.00 10.00 10.00 10.00

EPS 52.49 80.68 83.79 90.13

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Quarterly Ended Profit & Loss Account (Standalone)

Value(Rs.in.mn) 30-Sep-11 31-Dec-11 31-Mar-12 30-Jun-12E

Description 3m 3m 3m 3m

Net sales 1805.98 1721.09 1542.87 2175.45

Other income 55.92 44.68 42.75 48.74

Total Income 1861.90 1765.77 1585.62 2224.18

Expenditure -1450.07 -1425.91 -1300.99 -1792.57

Operating profit 411.83 339.86 284.63 431.61

Interest -11.28 -19.12 -15.67 -16.45

Gross profit 400.55 320.74 268.96 415.16

Depreciation -25.53 -30.14 -27.17 -28.53

Profit Before Tax 375.02 290.60 241.79 386.63

Tax -121.69 -91.46 -71.29 -124.88

Profit After Tax 253.33 199.14 170.50 261.75

Equity capital 111.54 111.54 111.54 111.54

Face value 10.00 10.00 10.00 10.00

EPS 22.71 17.85 15.29 23.47

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Key Ratios

Particulars FY11 FY12 FY13E FY14E

No. of Shares(in mn) 11.15 11.15 11.15 11.15

EBITDA Margin (%) 20.92% 22.15% 20.02% 19.54%

PBT Margin (%) 17.86% 19.62% 17.62% 17.19%

PAT Margin (%) 11.91% 13.17% 11.89% 11.52%

P/E Ratio (x) 57.15 37.19 35.80 33.28

ROE (%) 47.30% 54.27% 36.05% 27.94%

ROCE (%) 47.18% 56.53% 43.84% 37.27%

Debt Equity Ratio 0.93 0.73 0.49 0.37

EV/EBITDA (x) 32.54 22.10 21.26 19.63

Book Value (Rs.) 110.97 148.64 232.43 322.57

P/BV 27.03 20.18 12.91 9.30

Charts:

Net Sales & PAT

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P/E Ratio

Debt Equity Ratio

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EV/EBITDA (x)

P/BV Ratio

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Outlook and Conclusion

At the current market price of Rs.3000.00, the stock is trading at 35.80 x

FY13E and 33.28 x FY14E respectively.

Earning per share (EPS) of the company for the earnings for FY13E and FY14E

is seen at Rs.83.79 and Rs.90.13 respectively.

Net Sales and PAT of the company are expected to grow at a CAGR of 21% and

20% over 2011 to 2014E respectively.

On the basis of EV/EBITDA, the stock trades at 21.26 x for FY13E and 19.63 x

for FY14E.

Price to Book Value of the stock is expected to be at 12.91 x and 9.30 x

respectively for FY13E and FY14E.

We expect that the company will keep its growth story in the coming quarters

also. We recommend ‘BUY’ in this particular scrip with a target price of

Rs.3450.00 for Medium to Long term investment.

Industry Overview

The domestic innerwear industry is valued by industry sources at Rs. 140 billion,

accounting for 9% of the Indian apparel industry (valued at Rs. 1500 billion).Women’s

innerwear accounts for 66% of spend on innerwear (Rs. 90 billion) while men’s

innerwear accounts for 34% (Rs. 50 billion).The innerwear market is growing at a

faster rate than overall apparel market, and has been witnessing 16% revenue CAGR

over FY 06-10. The innerwear market can be divided into low, economy, middle,

premium and super – premium segments. The premium and super – premium

segments are branded markets characterized by faster growth. As per KSA Techno

Pack Report 2005 the men’s premium market is growing at the rate of 28% per annum

and super premium market is growing at the rate of 40% per annum. Similarly

women’s innerwear premium market is growing at the rate of 31% per annum and

super premium market is growing at over 40% per annum. The India consumption

growth story is expected to continue for some time. Rising disposable income, more

discerning and brand conscious consumers and growing awareness about personal

hygiene is boosting growth of the premium innerwear market. Also enhancing the

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growth is the rise in modern trade (malls, shopping complexes, etc).Government of

India has extended the Technology Up gradation Fund (TUF) for the eleventh five year

plan and has increased fund allocation. Government of India is also setting up various

apparel Parks, integrated textile parks and Special Economic Zones in partnership

with private sector.

Textile sector

The textiles industry in India enjoys a distinctive position due to the pivotal role it

plays by way of contribution to industrial output, employment generation (second

largest after agriculture) and export earnings of the country. The industry is rich and

varied, embracing the hand-spun and hand-woven sector at one end and the capital

intensive, sophisticated mill sector at the other. Its association with the ancient

culture and tradition of the country lends it a unique advantage in comparison with

textiles industry of other countries, thus giving it an uncommon edge to cater to a vast

variety of products and market segments both domestically, as well as, globally.

The industry currently contributes about 14 per cent to industrial production, 4 per

cent to GDP, and 17 per cent to the country’s export earnings, according to the

Annual Report 2010-11 of the Ministry of Textiles. The industry accounts for nearly 12

per cent share of the country's total exports basket. It provides direct employment to

more than 35 million people.

Industry sub-sectors

The textile industry comprises the following:

� Organized Cotton/Man-Made Fibre Textiles Mill Industry

� Man-Made Fibre / Filament Yarn Industry

� Wool and Woollen Textiles Industry

� Sericulture and Silk Textiles Industry

� Handlooms, Handicrafts, the Jute and Jute Textiles Industry

� Textiles Exports

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Production

During February 2011, total cloth production rose by 5.8 per cent year-on-year (y-o-y).

During April- February 2011 cloth production increased by 4.5 per cent y-o-y.

Export

Total textile exports during April-December 2010 registered an increase of 16.54 per

cent in rupee terms at Rs 87,582.83 crore as against Rs 75,149.98 crore during the

corresponding period of the previous year, according to the latest data released by

DGCI&S, Kolkata. The same were valued at US$ 19,217.12 million as against US$

15,695.07 million during the corresponding period of the previous year, registering an

increase of 22.44 per cent.

The share of textile exports in total exports was 11.29 per cent during April-December

2010 as against 12.34 per cent during April- December 2009.

The Road Ahead

India's T&C industry has great potential, and is one of the mainstays of the country’s

economy. The industry has enormous opportunities for domestic as well as

international investors given its consistent growth performance, abundant cheap

skilled manpower and growing domestic demand. With the abolition of quotas, India

has surged ahead of other countries and positioned itself as a value-added

manufacturer with a varied material base, an educated and English-speaking class of

executives with high product development and design orientation.

On the global front, India is set to become an even bigger participant, both as a

consumer and as a producer. The country offers an attractive combination of a large

domestic market, and a base for low cost production. The industry has gained a strong

position in cotton based products, especially in the readymade garments and home

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furnishings segment, which are expected to be the key drivers of growth for the

industry.

Besides this, the T&C industry is contributing towards promoting inclusive growth. It

has been contributing to broad based socio-economic development by providing

employment opportunities at local level.

The government envisions building state-of-the-art production capacities and

achieving a preeminent global standing in the textile sector by 2020, which includes

manufacture and export of all types of textiles.

_____________ ____ _________________________ Disclaimer:

This document prepared by our research analysts does not constitute an offer or solicitation

for the purchase or sale of any financial instrument or as an official confirmation of any

transaction. The information contained herein is from publicly available data or other

sources believed to be reliable but do not represent that it is accurate or complete and it

should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s

affiliates shall not be in any way responsible for any loss or damage that may arise to any

person from any inadvertent error in the information contained in this report. This document

is provide for assistance only and is not intended to be and must not alone be taken as the

basis for an investment decision.

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