Page industries

Page industries is the licensee of jockey brand of underclothing and various brand extensions which now includes socks, track pants, pajamas, ladies underclothing and kids underclothing. They also display sports and leisure wear on their website. I guess the brand strength of jockey doesnt need to be emphasised enough.

Coming to financial details,

cmp around 2800-2850, market cap close to 3200 crores.

Company has low debt and that too might be to take advantage of TUFS scheme.

Coming to last few years results

year 08 09 10 11 12 q1fy13

sales 192 255 347 491 683 218

np 23.8 31.6 39.6 58.5 90 32.7

eps for fy 12 was 80.6

25% growth in profits should take eps to around 100 per share.

While the stock might seem expensive on the conventional PE parameters, one has to take the bigger picture into consideration and look at the opportunity before the company with the brand strength it has.

In a new development in last year, company has got the licensee rights for speedo brand of swimwear. Now if one were to look at the flat and appartment schemes these days, most of them are having swimming pools. For anybody shelling out 50-100 lacs for flats, buying good quality speedo brand swimwear and allied products should not be a big issue. Although the opportunity seems quite small in comparision to the underwear and like categories, it can add to company’s growth and shows management resolve to keep looking for opportunities of growth.

This is a company with very good long term potential. Only concern for the cautious traditional investor would be the valuations. But over the years, this company has never traded cheap and as long as growth momentum continues, it is unlikely to trade cheap.

current quarter may be considered to be lacklustre and therefore the stock may languish at these levels or may correct a bit which might provide a good entry point for long term investors.

views invited.


How were the latest quarterly results announced today ?

Have you analysed them Hitesh Bhai?

hi hitesh, if i remember correctly you used to own this stock before and exited out of it. what new positives do you see in this stock now.

Rough Calculations

Indian Population : 120 crores

Males : Almost 55% i.e. 66 crores

If Page is able to cover 10% market share (Rupa, Lux, Amul cover major share), so it gets a population of ~ 6.5 crores to serve (High end customers)

Avg no. of innerwear brough per person a year(high end) : 3 each (top and bottom) = 6 per person

So a market of 39 crore units innerwears for Page

Now the average price of Jockey is close to 100 Rs. so it can have a Sales value of 3900 crores.


Ashwini ,

It is not only about male inner wares. Recently I visited some big malls in Pune and saw that Jockey is marketing very aggressively female inner wares as well.

I do not have the statistics for it but My feeling is that they will be able to successfully tap this segment as well.

yes i have often bought and sold page inds shares. thing is it tends to remain stagnant and range bound for long periods of time. then suddenly it tends to give a spike up followed again by range bound trading. overall trend remains up though.

regarding new positives, i feel the management has turned more pro active now with a lot of ads visible on banners, on tv, in newspapers etc. so they seem to be keen on propelling the growth to next level.

and in such kind of stories you keep praying for that poor quarter or poor couple of quarters which offers u the stock cheaper.

till now that doesnt seem to have happened even after a lacklustre quarter. i guess there is a lot of bullish consensus on the company among the existing holders.

Page has been a big miss for me. I had been working on this co during 2008-09 but felt valuations are not cheap when every other stock was just falling off and things seemed really tough. One big lesson was - few things will always remain in premium and one has to consider the bigger picture and look at the brand value, quality of earnings also.

I agree, we should keep a tab on Page and try to capitalize on corrections which might be there on weak nos.



I guess this will be my debut comment on this forum. So, here it goes.

Although, speedo is famous for swimwear related products, what’s not noticed much is it’s presence in footwear market. Any idea, if Page will also market them in India ?

Abroad, i have seen the speedo footwear getting shelf space alongside other major footwear brands like Adidas,Nike etc…

I recently went to the Jockey sale in New Bbay to see if I can pick up something. The hall was full, people buzzing around; most of all the major categories (vests, innerwear) in popular sizes was already sold out and what was remaining were some of the large sizes and few new designs of vests etc.

A few months ago, they had some kind of anniversary sale, on selected Jockey undies out in 3-packs. I visited a local Jockey shop, and could get one of the few remaining box left. The shopkeeper said, the stock was depleting twice as fast as he expected.

Till now we only saw it in malls and department stores, but I’m now seeing Jockey products being available more widely even in small shops.Off late I’m also seeing a lot of small independent clothing shops whose signboard is taken over by Jockey (a la Mobile service provider).Though even here, Jockey is still the most premium brand, but I see it as definitely spreading its reach to the working-class aunty who still purchases innerwear from small shops staffed with ladies on the shopfloor. Consumer purchasing behaviour in this segment is very important to nudge sales.

All this might point towards a sustained strategy to move into the mass-market with a big push in the distribution channel. I’ll admit a few yrs back, I had this perception that Jockey was a luxury brand ala Adidas/Nike et al, but now I perceive it more as a brand with excellent-value for a slightly premium price.

with all due optimism, it is my humble query that whether it will be able to maintain the same rate of growth i.e. 25-30% yoy? and hence valuation in that respect in the current is desirable or not?

Promoter selling is an ongoing thing on this company.

Its been going on seen the stock price was 600 odd rupees. I guess it should not be a matter of concern.


Emkay gave a sell call on Page ind with a price target of 2800 odd.

The Emkay call is a most futile exercise, the company has intiated the sell call on the two premises

a) Page having a relationship with Jockey till 2030 only. ( A terminal growth multiple of 0%, ridiculous)

b) To meet capex Page will have to reduce dividend payout ratio or raise debt, both of will lead to P/E de-rating.

(In the discussion itself there is the Nestle example where company has maintained dividends at constant levels thereby reducing payout %age, and has led to no P/E de-rating)

Any major correction in Page will be great opportunities to buy more.

The Emkay call is a most futile exercise, the company has intiated the sell call on the two premises

a) Page having a relationship with Jockey till 2030 only. ( A terminal growth multiple of 0%, ridiculous)

b) To meet capex Page will have to reduce dividend payout ratio or raise debt, both of will lead to P/E de-rating.

(In the discussion itself there is the Nestle example where company has maintained dividends at constant levels thereby reducing payout %age, and has led to no P/E de-rating)

Any major correction in Page will be great opportunities to buy more.

Emkay gave a sell call on Page ind with a price target of 2800 odd.

Hi Rudra,

Eventhough, I agree with everyone here that, by all means Page industries is a great business to own. I tend to disagree with majority of the boarders here that these are typically pricey business and hence one should be ready to pay premiium for such stocks. From whatever I have read/absorbed from all type of great value investors, the key trait of their decision is “margin of safety”. Where is the margin of safety in pricing Page at 38 times TTM P/E?Market is pricing in that Page will grow at 23-24% CAGR for next 15-20 years. It may happen to be true, butit assumes things willgo only incompany’s favourfor a long time.Now when one operates business, there maybe many unforseeneventualities and ofcourse competition does enter when returns are so sweet. So landscape may change. Incase of less than anticipated performance of the company,is no loss of capitalensured at current price or slightly lower price? I too know that there are number of high quality companies such as Nestle/Asian Paints/Titan of the worldthat have traded at premium and have still ensured good retunrns for the investors. But, then one must look at opportunity cost too! If one is looking for steady 15-20% compounder, there are many better opportunities in the market today. Moreover, as a licensee of the brand, one can not and shall not ignore the risk of agreement not gettin rennewed or terminated. What if Jockey decides to venture on its own in India? Even though unlikely at this stage, not unthinkable.

So the point I am trying to stress here is that if one is following value investing principles thaneven for great businesses, one can pay reasonable price which factors in conservatively estimated growth rate (10-15%)and still provides some margin of safety to keep odds in favor of the investor.

It would be interesting know views of the veterans/boarders having market edge here.

Best Regards

Dhwanil Desai

But at what price? Company trading at 38 times TTM P/E means that market is pricing in 22-23% CAGR for next 18 years (i.e. till 2030)

Hi Dhwanil,

The queries/reasons you raised was in my mind 2 years back when page was trading at 1175 odd rupees. My first concern was what will happen if the licence is not renewed? The second query in my mind was what will happen if growth slows down?

The first query was answered by researching on my own. Jockey has this model of selling their expertiseand provide technical know-how and R&D expertise for 5% royalty. They follow this in many countries. Also page has got 5 decade good relationship with jockey right from their association inPhilippines.

A company has very little probability to get thelicence(though not an absolute impossibility) terminated with such associations. Besides they have got International Licencee of the decade and recently outstanding advancement of the jockey retail image in 2012.Globally they wererecognised.

The second query was answered when i spoke with many retailers/shop owners/cloth shops just to see the visibility of the brand and the acceptance. The response was phenomenal. Many of them said that it is the no 1 both on sales/brand. They said it was so for many years now. So the chance of the brand value getting diluted was very little.

The market for them is huge. They are covering not even 5% of the population. Also i had a chance to read Mckinsey report later on india and the growing middle class. Our middle class population is expected to grow 10 times by 2025-2030.

Somehow i got convinced, even though it was hugely valued at that time(it never was cheap)

At that time too there were concerns for the huge valuations, promoter selling, PE contraction risk if growth subdues etc…Also there were concerns that it has already become a 3 bagger from 2009(300 odd) and it cannot grow like this forever.

I took a plunge and betted heavily. Also added on dips. In hindsight i believe it was a good call. There are some queries that come like if i had invested in x co instead of page, which has now grown up by 5 times, i always think in the next 3-4 years there would not be much difference.

Though whatever i discussed here had already been discussed.

Hi Dhwanil,

First, Page is in no ways a value buy. Period.

Growth investing is totally different from value investing. Here one is riding on the growth from future earnings. In Peter Lynch lingo they are in the “BUY High, SELL Higher” category.

If you follow price movements in Page, you will see the stock has remain very expensive for a considerable period of time on a trailing basis. After good earnings >> the P/E rises in expectation >> company performs >> EPS rises , P/E falls >> again P/E rises to old levels before earnings…and the cycle goes on.

At every point of time…be it at 1100…1700…2600…or 3000 Page remained very expensive. And it will remain so.

If you look at Jockey in US, it has been the inner wear/leisurewear brand not with the biggest market share but the biggest mind share as well. Look at the current Jockey campaigns of “Jockey or Nothing” you will understand the significant brand moat and pricing here.

Add to that the Genomals as promoters. They have been associated with JOCKEY International Inc. for 50 years as their sole licensee in the Philippines. They set up Page Industries in 1994 to bring Jockey in India.

In the last 18 years, Page has established a superb distribution machinery reaching across India which is very very hard to replicate for late entrants. The combination of this distribution + brand moat makes Page a lethal force in the Indian context.

Just consider the following

  1. Consider the business as a whole and what kind of premium someone will be wiling to pay for acquiring the company.

  2. PLC: Every satisfied customer will serve the companies top line frequently due to the shorter product life cycle. r

  3. With growing disposable income levels the rise in aspiration levels and forseeable demand shift from unorganized/unbranded market to Jockey.

  4. Expansion in women inner wear which is an expanding category in itself.

  5. Growth coming from Speedo brand in next decade

  6. New brand relations / licensing.

Regarding licensing renewal, Page Industries was awarded as the best licensee in a decade
by Jockey International. The chance of license non-renewal is an even which is possible but with negligibly low probability that can be ignored.

Growth investing does not work with margin of safety. It is very well to avoid this category and stay with value stocks but to assume this will come down to levels with adequate margin of safety and very low P/E is wishful thinking. Markets does not work that way.

The low liquidity ( Promoters 60%, FII 16.5%, DII 18%) will lead to some irrational price movements, but all in all this remains a secular growths story.

P/E?Market butit assumes things willgo only incompany’s favourfor a long time.Now maybe many unforseeneventualities Incase company,is capitalensured worldthat thaneven (10-15%)and

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Hi Dhwanil,

Coudnt agree more with you. Loving only growth without Margin of Safety can lead to loss of capital. When you expect growth at such at high clip even slight bumps in growth can create/ change the perception of the company leading to sharp correction in prices. If the fundamental story then also remains intact then these are the corrections when one can enter them.

I think Buffet bought both Coca-Cola and Amex when they suddenly corrected very sharply due to some temporary problems in these stocks. At these prices there was enough margin of safety for him.



''Good Things Don’t Come Cheap" .

High PE multiple means earnings are predictable . Look at it on Forward year basis it will look cheap . It will become cheap with the results and will become expensive before next quarter results are out. A person buying a stock at a multiple of 5 with no growth and bad management is more prone to loose than a person buying a stock with a multiple of 35 , honest management , scalable business and predictable growth for 5-6 years . You cannot build a brand such as JOCKEY .

If it worries you then sell it down to the sleeping point