Release Date: May 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Page Industries Ltd (BOM:532827, Financial) achieved a PAT growth of 38.1% in Q4 FY24.
- The company maintained its leadership in quality and market presence across all categories.
- E-commerce channel witnessed substantial growth, reflecting evolving consumer purchasing preferences.
- Page Industries Ltd (BOM:532827) remains debt-free, with a strong focus on operational excellence and digital transformation.
- The company has successfully reduced inventory days from 124 in Q4 FY23 to 93 in Q4 FY24, indicating healthier inventory management.
Negative Points
- FY24 annual revenue declined by 2.7%, reflecting weaker demand and consumption.
- The operating environment remained challenging with sluggish consumer demand and erratic climate events affecting growth.
- Inventory levels at channel partners' end are still elevated and not at ideal levels.
- The EBITDA margin for Q4 was lower at 16.8% due to increased investments in marketing and technology.
- The company faces increased competitive intensity, with some peers performing better on the P&L front.
Q & A Highlights
Highlights of Page Industries Ltd (BOM:532827) Q4 and Full-Year FY24 Earnings Call
Q: Given your comments of a slight uptick in the demand conditions towards the end of the quarter, how far do you think we are from looking at the mid-teens kind of value growth that we target? How are you looking at FY25 from a sales growth perspective?
A: FY25 may see gradual improvement. The latter part of the year should be buoyant due to economic growth, good monsoon, and industrial output. We are planning for a gradual uptick to be cautiously aggressive in our approach. (V. S. Ganesh, Managing Director)
Q: Is it fair to say that until the recovery pans out, margins are likely to remain at the lower end of the 19% to 21% range?
A: We are comfortable with margins between 18% and 21%, despite not touching prices. We have taken initiatives to protect margins without price changes, which should benefit the brand in the long run. (V. S. Ganesh, Managing Director)
Q: Can you update us on the current dealer inventory levels, especially in the innerwear space?
A: Inventory levels at channel partners have improved by about six days for the full year and three days in Q4. While overall inventory levels have dropped, it varies by category. The inventory correction is ongoing and will take time. (Karthik Yathindra, President, Chief Sales Officer, & Chief Marketing Officer)
Q: What are the key financial highlights for Q4 FY24?
A: Sales volumes were 45.3 million pieces, a 6.1% year-on-year growth, resulting in revenue of INR9,954 million. EBITDA grew by 24.5% year-on-year to INR1,672 million, with a margin of 16.8%. PAT for the quarter was INR1,082 million, a growth of 38.1%. (Deepanjan Bandyopadhyay, Chief Financial Officer)
Q: How has the performance been in different product categories like men's, women's, and athleisure?
A: Men's innerwear grew in line with the 6% volume growth. Women's innerwear showed better growth than men's. Athleisure showed growth in Q4 but a decline for the entire year due to a subdued first half. (Deepanjan Bandyopadhyay, Chief Financial Officer)
Q: What is the current status of the ARS implementation and trade inventory levels?
A: The ARS implementation has improved inventory control. The inventory in the channel outside of Page, which we have access to, is about 20 million pieces. (Karthik Yathindra, President, Chief Sales Officer, & Chief Marketing Officer)
Q: What are the marketing strategies and investments for the women's and kids' segments?
A: We have disproportionate investments towards women's innerwear and kids' segments. For women's innerwear, we launched the "Bras As Versatile As I Am" campaign. For kids, we launched our first TV commercial for Jockey Juniors. Overall, we maintain marketing spend at 4% to 4.5% of revenue. (Karthik Yathindra, President, Chief Sales Officer, & Chief Marketing Officer)
Q: How has the e-commerce channel performed, and what is its contribution to overall revenue?
A: E-commerce contributed over 8% to revenue in Q4, growing by 30% year-on-year. For the entire year, it contributed around 7% and showed phenomenal growth. (Deepanjan Bandyopadhyay, Chief Financial Officer)
Q: What is the impact of competitive intensity on Page Industries, and how do you see the overall growth in the medium to long term?
A: Despite competitive intensity, we remain optimistic due to our strong market position and consumer loyalty. We focus on maintaining quality, market presence, and hygiene in the marketplace. The long-term growth prospects remain positive. (V. S. Ganesh, Managing Director)
Q: Can you provide more details on the favorable order received from CESTAT?
A: We received a favorable order from CESTAT regarding an investigation for undervaluation in customs duty for our imports. The order ruled in our favor, and the allegations were overruled. (Deepanjan Bandyopadhyay, Chief Financial Officer)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
