Page Industries to see 27% upside, says UBS; what makes the brokerage bullish on stock?

Page Industries share price NSE BSE: Page Industries, one of the leading manufacturers and retailers of innerwear, loungewear, and socks, and the exclusive licensee of Jockey International Inc. (USA) for the manufacture, distribution, and marketing of the Jockey brand in India, Sri Lanka, Bangladesh, Nepal, and the UAE, was on investors' radar on Monday, March 18, as global brokerage UBS has initiated coverage on the stock with a 'buy' rating. The brokerage sees a 26.94 per cent upside in the company's share price at Rs 44,000 against the previous closing price of Rs 34,661. 

At around 10:07 a.m., shares of Page Industries traded 1.08 per cent, or Rs 375.35, higher at Rs 34,984.6 apiece on BSE. The market capitalisation of the company at around the same time stood at Rs 39,021.38 crore.

UBS, in its note, said that the improving demand will help drive volume and that the strong distribution and brand recall will drive growth for the company. It further says that it estimates Page Industries' margins to reach pre-pandemic levels, given the factors mentioned earlier. It added that the stock has de-rated almost 35 per cent from a peak of nearly 80x one-year forward PE, and now it sees likely limited downside risks for the stock. UBS expects the stock to re-rate to its historical average multiple in the medium term.

How did Page Industries fare in Q3? 

Page Industries reported a 23.1 per cent year-on-year growth in profit after tax (PAT), amounting to Rs 152.4 crore in comparison to Rs 124 crore clocked during the same quarter last year. 

The company achieved a revenue of Rs 1,228.8 crore, marking a year-over-year increase of 2.4 per cent. Meanwhile, the apparel maker's sales grew 4.6 per cent to Rs 5.52 crore in the third quarter of the financial year 2024 (Q3FY24).

The stock performance of the company has disappointed investors in the past one year, as the shares have slipped nearly 8 per cent during the window. 

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