Page Industries Ltd’s shares have declined 6% since it announced its December quarter (Q3FY25) results, reflecting that investors are not focused on the solid operating margin, but on sluggish revenue growth.
Despite the festive tailwind in October, Page’s Q3 revenue increased only 7% year-on-year to ₹1,313 crore, marking a reversal from the double-digit 11% growth seen in Q2 after clocking single-digit growth or decline since Q3FY23.
This year, demand in November and December failed to sustain October’s strong sales momentum, leading to a volume growth of just 4.7%, lagging expectations. Better product mix aided realizations. Page’s Q3FY25 performance indicates a return to familiar headwinds, raising questions about the strength of the demand recovery and whether Q2 was an exception.
While secondary sales are gradually picking up, consumer sentiment remains muted. The premium innerwear category continued to perform well, accompanied by a drop in trade inventory at the distributor level. E-commerce is a bright spot, but it is still a relatively small part of the business. Page has kept prices steady for three years, suggesting limited room for price-led growth ahead.
Page holds the exclusive license for the manufacture, marketing and distribution of the Jockey brand in some countries, including India.
Also Read: Page Industries sees uptick, but growth hurdles persist
Nonetheless, better cost discipline helped Page deliver on profitability in Q3. Gross margin expanded as much as 340 basis points year-on-year, driven by stable raw material and labour costs, coupled with improved manufacturing efficiencies. Employee expenses rose only marginally, helping Ebitda margin reach 23%, an 11-quarter high. Thus, Ebitda came in at ₹302 crore, clocking 32% year-on-year growth, far ahead of revenue growth.
The company’s Ebitda margin stood at 21.6% in the first nine months of FY25. The management has an Ebitda margin guidance of 19-21% for Q4, citing increased IT and marketing costs due to digitalization initiatives.
However, revenue growth is the primary concern. The key ask from the stock remains the double-digit top-line growth, which the company used to report before covid, said a report by Nuvama Institutional Equities.
Page is pushing for growth through capacity expansion. The Odisha plant is set to be operational by March, and a new sewing facility in KR Pete, near Mysore, Karnataka, will improve efficiency and help meet rising demand.
Page’s shares are currently trading at around 60 times FY26 estimated earnings, showed Bloomberg data. While cost efficiencies are supporting margins, the critical question remains whether Page can reignite double-digit revenue growth. Without that, it would be tough for the stock’s premium valuations to sustain.
Also Read: Page Industries declares 3rd interim dividend of ₹150 per equity share; details here
