ICICIdirect has upgraded Page Industries to 'Buy' with target price of Rs 8,660 as against current market price (CMP) of Rs 7,336 in its report.
Commenting on the investment rationale, ICICIdircet said, "Page Industries' Q1FY15 revenues were marginally lower than our estimate. A superior operational performance led to in-line PAT. Revenues increased 24.4% YoY to Rs 3.78 billion led by 9% volume growth (30.5 million pieces) and 14.2% realisation growth. Strong growth in the brassiere and leisure segment aided this performance. Owing to lower-than-expected selling and advertising expenses and also relatively lower raw material costs, the operating margin at 20% (up 100 bps YoY) was higher than our estimate of 17.9%. Consequently, PAT at Rs 543 million (up 26.0% YoY) was in line with our estimate of Rs 538 million.
Many consumer oriented companies that have delivered consistent growth are trading at premium multiples. Similarly, we believe Page should also command a premium considering its strong fundamentals and consistent dividend payouts. Page has been able to grow consistently while many of its peers are struggling to grow."
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