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Page Industries stock gains 10% despite 58% fall in Q4 profit; here's why

Share price of Page Industries gained up to 10.47% to Rs 21,176 against previous close of Rs 19,169

twitter-logoBusinessToday.In | June 24, 2020 | Updated 16:58 IST
Page Industries stock gains 10% despite 58% fall in Q4 profit; here's why
Page Industries stock closed 9.18% or Rs 1,760 higher at 20,929 on BSE. The inner wear maker reported a 58.63% fall in Q4 net profit to Rs 31 crore against Rs 75 crore profit in Q4 of 2018-19

Page Industries share price gained over 10% today after the consumer durables and apparel maker posted weak earnings for the March quarter. Share price of Page Industries gained up to 10.47% to Rs 21,176 against previous close of Rs 19,169. Later, Page Industries stock closed 9.18% or Rs 1,760 higher at 20,929 on BSE. The inner wear maker reported a 58.63% fall in Q4 net profit to Rs 31 crore against Rs 75 crore profit in Q4 of 2018-19.

Earnings before interest tax, depreciation and amortisation (EBITDA) fell 51.4% to Rs 58.1 crore in Q4 against estimate of Rs  98.1 crore. Net sales slipped 11% to Rs 514.26 crore in March quarter compared to Rs 607.86 crore sales in corresponding quarter of 2018-19.

"Lower absorption of costs invested in sales and marketing, and people and technology, contributed to the lower profit after tax," the firm said.

However, the stock shrugged off all the negative sentiment arising out of earnings and took cues from the management commentary.

Post Q4 earnings, management of the firm said,"Current situation is better than feared. Production facilities are running at 85% now. According to management, in 6-9 months, the company would be back to where it was last year unless there is a second wave of COVID-19.The firm received Rs 90 crore worth orders in 4QFY20 that were not dispatched or billed; however, the same will now be part of 1QFY21 revenues."

This stock held by Rakesh Jhunjhunwala hits all-time high, zooms 90% in 3 months

This led to a rise  in the stock today. Stock price of Page Industries stood higher than 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages. Page Industries share price has gained 15.55% value in one week, over 15% in one month and 1.41% in a year.  Market cap of the firm rose to Rs 23,345 crore on BSE. Total 7,242 shares changed hands amounting to turnover of Rs 14.91 crore.

Brokerage Emkay Global has given a hold rating to Page Industries stock with a 12-month target price of Rs 17,500.

Emkay said, "Factoring in the delayed reopening and gradual recovery from the second half, the brokerage has reduced its FY21/22E EPS by 10 per cent. While Page seems to be benefitting from work from home-led demand for its products and share gains, the brokerage awaits better clarity on recovery trends. Despite the underperformance, valuations at 47 times FY22EPS are not attractive and the brokerage is waiting for a better entry point. It maintains a hold rating with a revised target price of Rs 17,500 (from Rs 18,200) based on 40 times Jun-22 EPS."

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