Page Industries shares reported Q2 sales growth of 11 per cent, with healthy 7 per cent YoY volume growth. Demand improved sequentially, but a full recovery is likely in H2FY25.
Page Industries Ltd climbed 5 per cent in Friday’s trade to hit its fresh 52-week high level following a strong set of September quarter results.
Ebitda margin improved driven by cost-optimisation initiatives.
The stock rose 4.55 per cent to hit a high of Rs 47,161. It is up 21.53 per cent year-to-date. Analysts are positive on the company’s prospects, but are unsure whether the prevailing rich valuations of Industries shares may sustain.
Page Industries maintained its margin guidance of 19–21 per cent for FY25 on increased IT spending in Q3 and Q4.
Nuvama Revises Target Price for Page Industries to Rs 42,803; Maintains ‘REDUCE’ Rating
Nuvama has revised its target Price-Earnings (PE) ratio for Page Industries to 55x, reflecting improving growth prospects and margin efficiencies projected by the company. This new target aligns with Page’s long-term average PE multiple. Nuvama’s updated estimates indicate a 7.4% increase in projected profit after tax (PAT) for both FY25E and FY26E, resulting in a higher target price of Rs 42,803, up from Rs 33,326 previously.
Despite this upward revision, Nuvama maintains a ‘REDUCE’ rating on Page Industries, citing that the recent stock run-up has already priced in revenue growth and margin improvement.
According to Nuvama, demand improved during the festive season, and secondary inventory turnover showed progress. However, they expect a full recovery only in the second half of FY25.
MOFSL Analysts Upgrade Page Industries to ‘BUY’
On the other hand, Motilal Oswal Financial Services (MOFSL) has upgraded Page Industries from ‘Neutral’ to ‘BUY’ with a revised target price of Rs 54,000, based on a higher PE multiple of 60x for Mar’27E earnings per share (EPS).
MOFSL analysts believe the earnings cycle for Page Industries will improve, driven by the bottoming out of volume growth pressures and expected margin improvements due to benign input costs.
They also point out that, despite a 15% decline in Page’s stock over the past two years, the outlook for growth and margins in the near term remains favorable.
In their analysis, MOFSL highlights that primary growth, which lagged behind secondary growth due to high trade inventory, should catch up in the second half of FY25.
Additionally, MOFSL sees improvements in inventory management through the ARS system as key drivers of better secondary order fulfillment and overall operational efficiency.
Conclusion:
While Nuvama remains cautious with a ‘REDUCE’ stance on the stock, MOFSL is more optimistic, upgrading its rating and setting a higher target price for Page Industries, driven by improved fundamentals and growth potential.
