Page industries


(Bobby Mehrotra) #323

My reasoning was: 1. down 20% from top and 2. availeble at 38 PE FY17e. But now that the earnings have been downgraded too, the price corrected further. Your observation of time/price correction throws up another query: Why is Page (given the quality of the stock) not going thru a time correction, like GRUH? Gruh has been hovering around 240’s for a long time.

Discl: Invested both in Page and Gruh.


(vinay ambekar) #324

Gruh first corrected from 300 levels and is hovering near 240 which is 20% down. Page has indeed corrected the most from its top in recent history. But volatility has seen a general increase in this counter since inclusion in FnO.

Page is my top holding and at 45x 1-year forward (my estimate) its starting to look interesting. If it follows same pattern as Gruh then there will be ample opportunities to buy.

Not a reco. Standard disclaimers apply.


(Bobby Mehrotra) #325

Thanks Vinay, so FnO makes it volatile.


(richdreamz) #326

So, you want to know why Page is so highly (richly) valued? The more I research various other stocks/sectors for investment the more I get to understand Page :-).

There are companies which have super ROCE, good FCF, tempting dividend yield, low capex, ethical management, durable moat BUT they lack REVENUE GROWTH. They strive very hard for a 15-20% growth. Some through inorganic route, some through organic.

Page has all the above and a superior sales growth (even during the times of low economic activity) - what a combination to have?! Page does NOT age!

Disclosure: I hold page as indicated in my portfolio.


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#327

You would need to keep in mind that we are not justifying adverse combination of valuation vs. expected growth


(vivek naik) #328

macroman and macrowoman is increasing its advertisements in the print media and on tv and internet ,how much of a threat to page can this be? invested in page


(gautham1) #329

a small observation. recently i was in a mall in bangalore. it was a weekend. spent about 15 mins in a jockey store checking out things. to my surprise, the billing counter was occupied all the time. i had to wait for more than 5 mins in the q to mine billed. at the same time, there were so many other stores like Allen solly, peter England ( not comparable. but still saying) with hardly any footfall.


(richdreamz) #330

After a long time, an eerie feeling with regards to Page price movement. Price movement generally/typically tells what’s going to come.

As per the one year daily chart from chartlink, for the first time in many years, Page chart deviated from being ‘secular uptrend’ to ‘downward channel’.

Page should break this channel sometime in future, either up or down. I said eerie feeling because, it looks to me as if it might break towards the lower level. At the current juncture, it is located at the top of this channel with RSI and CCI showing over-bought levels and fundamentally high PE and a slow Q1 FY16 growth.

Is the chart telling us something? Can the technical experts on this forum read any pattern here?

Disclosure: I HOLD page. I’m NOT a technical expert, I just read the chart to identify trends as an amateur, that’s it. This is NOT any suggestion to sell/buy, just my observation. Of all the people in this world, I’m the worst technical analyser of charts.


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#331

I have a similar feeling that it is poised to make a big move in some direction. I have noticed that every small rally is being sold into. IMO, the breakdown could happen post Q2 results unless some big down move in indexes happen before. The biggest outperformer of the last bull market is obvious target for profit booking

Disc: Hold Page


#333

I don’t even consider myself technical expert as such. I would say hold your thoughts as I still see downside . Look at the last 8 mins on NSE it fell from 14773 to 14503. It is trapping bulls IMO. However, it looks like robust IIP might keep the market supported.


(richdreamz) #334

Page FY 16 Q2 results are out:

http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/08EB582E_EE17_4DF3_B0C4_79AC9780FEF7_135243.pdf

Revenue growth about 16% and Profit growth about 20%. It looks like Page is slowing down a bit. I’m concerned with the high valuations and as I see it upside is capped and is either open to a bit lower levels or under go time correction. 16% top line growth is good in this environment but I think the current valuations more than capture this kind of growth.

Balance sheet - Company paid off short term borrowings with the profits during the year, so finance costs may go down a bit in coming quarters.

It looks like there is minimal benefit of cotton prices falling so far on the P&L. So the full year EPS could be around 220. Also, I do not see any increase in other expenses where the company could be showing advertising expenses. Strange, something is amiss here for my brain.

As usual, dividend of 21 INR.


(Krishna kumar) #335

Q2 Results out:

Revenue up by 16% from 396 cr to 461 cr.
NP up by 21% from 49.90 cr to 60.2 cr

Pat margin increases to 13% from 12.5%.

Other income 48 lac vs 6.2 crores. (virtually nil other income this qtr)

Long term borrowings come down to 30.85 crores from 34.53 crs
Short-tem borrowings come down to 25.52 crores from 99.86 crores

Interim dividend of 21 for this quarter in addition to 19 paid in the previous quarter.


(Akaash Bansal) #336

Now PE of 70X looks extremely high for Page Industries, seeing its last 3 QTRS Growth rate of 20-25% …Its slowing down definitely.

Exited the stock today after 3 years of Holding.


(gautham1) #337

Decent set of numbers in this environment. Even the dividend is consistently being increased. I too am in a dilemma. There are so many companies reporting massive degrowth in sales and/or profit. at least this one is showing some growth. The TTM PE is now 67. ( looks good compared to 90 plus PE it had a few months ago). that gives some comfort :smile:
discl: invested since 2010. no buy/sell in last one year.


(richdreamz) #338

Disclosure: I’m no way remotely can be called a technical analyst. But I usually see trends when I want to sell any of my core holdings. I hold page and I have trimmed it as disclosed in my portfolio thread earlier in order to make way for alpha returns and I intend to trim it further.

Page Industries 1 Year Daily chart

Chart source: Chartlink.com

  1. As indicated in one of my earlier posts above, Page though briefly breached the upper line it soon resumed its down trend and it looks it is headed towards touching the lower line at around 12000. However, currently the stock is in over sold levels (look at RSI and CCI indicators) so there could be some lower selling pressure before the downturn resumes towards 12000. It appears as if Page made a significant top at 17000 though on low volumes.

Page industries 5 year weekly chart

  1. It looks like Page is forming “Head and Shoulders” pattern in the weekly 5 year chart and if the chart plays out the targets could be around 10000 which is the difference between neck line and head top. Any break down below 13000 on weekly close could proved to be negative. Since this is a weekly chart the targets also play accordingly on medium term. So if the above daily chart plays out, it paves way to weekly chart as well.

Fundamentally too, it looks like the high PE coupled with lower growth relatively as well as in comparison to its track record could mean PE compression.

Again my amateurish technical skills could be playing a confirmation bias here as my previous post played out as predicted when Page fell from 14500 to 13000 levels.

EDIT: I’m as bullish on the Page business prospects as ever. Business prospects are different from stock returns prospects. With back to back lower revenue growth my perspective on stock prospects have changed.


( s das) #339

If i not wrong page management had already told some analyst about a slower Q2. they also said things will be normal from Q3 onwards. though diff opinion makes a market i will wait for the earnings to catch as its difficult to find a stock like page with 20%+ growth and nearly 45% dividend payout ratio for 3-4 years to come. I feel market will always give page some premium i.e some more pe multiple for every quarter dividend policy and increasing dividend every year. its very difficult to find such stock and if we are lucky will get one or two in many years. Needless to say i hold page shares.


(Bobby Mehrotra) #340

Hi S Das, I agree with you. Tho riche’s head and shoulder and a target of 10000 was interesting and scary. And he maybe right. But the kids wear and the online portal should be the next drivers. As fr the online sales, I am a bit curious. Will these bring offline sales online? Page has abt 30,000 points of sale. Would online complement offline sales, which means growth in revenue+online revenue? India has a low broadband penetration, i think abt 20% as compared to S Korea or Japan with more than 70%. And the overall scenario says 40% of all retail sales wld be online by 2020. Just to give an example, Maggi was back today, sold online thru snapdeal.


( s das) #341

i normally buy jockey from online through jockey e-commerce site. no bad experience till date.ya riche’s may be right, no argument. it was just my thought. my guts feeling is that it will wait for the earning to catch up in this range. i can be wrong also as i dont understand or follow technical chart.


(Rajesh_R) #342

With most of the good companies reporting flat growth, page seems to be doing alright. I am looking forward to a turn around in the next quarter due to festival season.

Disc: Invested


#343

I think it is getting ready to deliver better growth. EBITDA grew 35% yoy mainly due to 3%+ expansion in gross margins. It is ticking all the boxes by reducing debt, increasing dividends and increasing cash on the balance sheet. Don’t know what caused massive drop in other income and increase in tax rate. Without these it was headed to 35% growth in Q2 EPS. It is too much to expect an elephant to run too fast that too in the rainy season. However, raw material benefits will keep EPS growth good enough for the next few quarters at least.