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Page Industries: Strong volume growth seen across categories

News: Page Industries reported a robust operational performance in Q2FY22 with revenues coming in at an all-time high and crossing the Rs.1000 crore mark. Sales momentum picked up signifcanlty with ease in store restrictions. Revenue for the quarter grew 46% YoY to | 1084.0 crore (I-direct estimate: Rs.895 crore). The robust trajectory could be partially attributed to favourable base (5% de-growth in previous year). However, two-year CAGR remains impressive at 18.2%. Company continued to strengthen its distribution network with addition of 13950 MBO touchpoints (total: 94200 ) and 54 EBOs (total: 1000+). On account of higher RM prices, gross margins declined 65 bps YoY to 54.8% (I-direct estimate: 57.1%). However on account of better than estimated sales growth (positive operating leverage), EBITDA margins came in higher than our estimates at 21.5% (I-direct estimate: 20.4%, Q2FY21: 22.3%). Tracking the healthy operational performance, PAT grew 45% YoY to Rs.160.5 crore (I-direct estimate: Rs.121.5 crore).

Views: The company’s products are witnessing strong demand and the management expects the trend to continue. The company is striving to increase capacities to meet the enhanced demand. All its channels are fully operational and the company is witnessing increased momentum in sales across all product categories backed by expansion in its product portfolio and existing network. The management expects to sustain healthy revenue trajectory and targets to its sales to reach US$1 billion by FY26 (CAGR: 21%)