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Temporary logistics impact in 1Q; FY27 guidance remains intact

* Page Industries (PAGE) reported 1QFY27 revenue growth of 8% YoY (est. 12%) and volume growth of 6% (vs. est. 12%; 2% in 1QFY26 and 11% in 4QFY26). Underlying consumer demand remained healthy, but temporary logistics and manpower constraints impacted last-mile deliveries toward the end of June. Management stated that the last 7 days of billing remained undelivered (normally 3-4 days), implying that an additional ~3 days of billing was pushed to 2QFY27 (3-4% impact on 1Q volume). Management expects the lost sales to be recovered in 2QFY27 and remains confident of sustaining double-digit volume growth in FY27. JKY Groove continues to see encouraging traction, while the Disney/Marvel collaboration should support revenue growth going forward.

* GM contracted 190bp YoY to 57.2% (est. 59.8%, 58.4% in 4QFY26) due to inflation in cotton and synthetic products. PAGE absorbed part of the cost pressure through strategic sourcing and supply chain initiatives and implemented a calibrated 2.2% price hike in May to partly offset RM inflation. The full benefit of the hike will flow through from 2QFY27 due to FIFO inventory movement. FG/RM inventory days improved to 66 from 73 at the beginning of 1QFY27 and are expected to remain at current levels.

* EBITDA margin contracted 200bp YoY to 20.3%. Management reiterated its long-term EBITDA margin guidance of 19-21% (vs. 22% in FY26). While RM inflation remains a near-term margin headwind, calibrated pricing and expected normalization in input costs should support profitability going forward. We model EBITDA margin at ~21.5% for FY27/FY28.

* PAGE’s 1QFY27 growth was impacted by temporary constraints, while underlying consumer demand remained healthy. The company continues to target double-digit volume growth in FY27 (we model 8%), supported by recovery of deferred 1Q sales in 2Q, calibrated pricing, and improving traction across channels. The ~2% price hike taken in May will fully reflect from 2QFY27, while Disney/Marvel merchandise and JKY Groove should provide incremental growth. We remain positive on PAGE’s medium-term growth outlook, though near-term margins could remain under pressure from RM inflation as the company balances margin protection with volume growth. We model 12% revenue and 11% EBITDA CAGR over FY26-28E. We reiterate our BUY rating on the stock with a TP of INR45,000, premised on 50x FY28E EPS.

Highlights from the management commentary

* Management stated that the last-mile delivery was impacted toward the end of June due to third-party logistics disruptions. This was driven by speculation around fuel price hikes, availability issues, and third-party labor constraints during the month.

* Approximately 7 days of quarterly billing went undelivered and had to be pushed to the next quarter, compared to the normal 3 to 4 days. This created a net delta of roughly 3 days of invoiced billing that could not be reported as revenue in 1Q. Thus, all the lost 1Q sales will be realized in 2Q.

* Net working capital days improved marginally to 54 days from 56 days.

* The company continues to target volume-led growth and expects double-digit volume momentum to sustain in FY27.

Valuation and view

* We cut our EPS estimates by 2-3% for FY27 and FY28.

* PAGE’s 1QFY27 growth was impacted by temporary constraints, while underlying consumer demand remained healthy. The company continues to target double-digit volume growth in FY27 (we model 8%), supported by recovery of deferred 1Q sales in 2Q, calibrated pricing, and improving traction across channels. The ~2% price hike taken in May will fully reflect from 2QFY27, while Disney/Marvel merchandise and JKY Groove should provide incremental growth. We remain positive on PAGE’s medium-term growth outlook, though near-term margins could remain under pressure from RM inflation as the company balances margin protection with volume growth. We model 12% revenue and 11% EBITDA CAGR over FY26-28E. We reiterate our BUY rating on the stock with a TP of INR45,000, premised on 50x FY28E EPS.

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