Page Industries shares plunge 13% as higher RM costs hit Q2 profitability; can festive demand drive a recovery?

Detailed summary

Page Industries shares fell 13% to their lowest level since April after higher input costs limited profit growth in Q2 FY27. Revenue rose 11.5% to ₹1,439.6 crore, while profit after tax increased 4% to ₹202.5 crore. The company expects festive demand and new products to support growth.

Shares of Page Industries, the licensee for Jockey and Speedo in India, plunged 13% in Thursday's trade, 12 November, falling to the lowest level since April at ₹31,850 as investors were disappointed with the company's performance in the second quarter, weighed down by higher input costs.

The company reported an 11.5% year-on-year (YoY) increase in revenue to ₹1,439 crore in Q2 FY27, compared with the corresponding period last year, driven by a 5.5% rise in sales volume to 59.7 million pieces.

However, profitability growth remained relatively modest amid elevated raw material costs. EBITDA increased 7.4% YoY to ₹300 crore, with an EBITDA margin of 20.8%, while profit after tax (PAT) rose 4% to ₹202.5 crore, translating into a net profit margin of 14.1%.

The company's total expenses rose nearly 13% to ₹1131 crore, dragged by an 11.5% rise in raw material costs. For the first half of FY27, the company reported a 9.7% YoY increase in revenue to ₹ ₹2,860 crore, while sales volume grew 5.6% to 121.7 million pieces.

EBITDA rose 2.6% to ₹589.1 crore, with a margin of 20.6%. However, profit after tax remained broadly flat at ₹395.4 crore, compared with the corresponding period last year, with a PAT margin of 13.8%.

Commenting on the results, V.S. Ganesh, Managing Director of Page Industries, said the company delivered double-digit revenue growth in Q2 FY27, supported by healthy volume growth, premiumisation and a strong consumer response to new product launches. He acknowledged that raw material costs remained elevated but said profitability had stayed within the company's planned range.

He added that positive demand trends, strong brand momentum, an encouraging pipeline of new product ranges and ongoing operational efficiency initiatives would support the company's growth outlook.

With the festive season getting underway, Page Industries expects a healthy improvement in consumer demand over the coming months.

It also expects expanded manufacturing capacity, streamlined processes…

Opening of the article, excerpted from Mint. To read the rest, open the article on the publisher's site.