Page Industries first-mover advantage in the affordable premium segment of innerwear has helped it reap significant gains. As the category expanded, led by consumer uptrading, Page found itself well positioned, with good products/business model.
Over the years, new brands cropped up but are now insignificant. We see Page continuing to do well as a benign competitive scenario will continue for some time and the category will keep growing due to under-penetration. We initiate coverage of Page with an add rating and target price of R4,700 (26X FY2015E EPS).
Page Industries volumes and market share in FY2013 imply the affordable premium category of innerwear catered to just 53 million men and 28 million womenonly ~6% of Indias population in FY2013. Rising per capita incomes and favourable demographics imply the market for premium innerwear will likely increase to a much higher proportion in future.
We expect high growth rates to continue. We expect Page to post revenue CAGR of 24% over FY2013- 6 versus 35% CAGR over FY2008-13. Page, with its 21% and 12% shares (FY13) in the premium (and mid-premium) mens and womens innerwear category, dominates Indias innerwear space. First-mover advantage and bestin- class execution have led the company to far outperform the competition over the past few years. Page posted sales CAGR of 36% over FY2007-13 against 18-20% CAGR by competing companies like Rupa & Co and Lovable Lingerie.