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Growth positivity sustains; strengthening the core

We interacted with Mr. Karthik Yathindra, CEO of Page Industries (PAGE), to discuss consumption trends in the innerwear segment, growth strategy, distribution expansion, category opportunities, and the company’s profitability outlook.

* PAGE’s growth strategy remains anchored on strengthening its leadership in men’s innerwear while accelerating growth in underpenetrated categories such as women’s innerwear and athleisure. The company currently has ~20% penetration of the men’s innerwear TAM, while penetration in women’s innerwear stands at just 7-8%, providing significant headroom for further growth. Management expects women’s innerwear and athleisure to outpace the overall business, supported by their lower existing base. PAGE is also expanding its athleisure offering through accessible, differentiated products and youth-focused initiatives such as JKY Groove.

* Recent demand trends continue to show sequential improvement. While Tier 2/Tier 3 markets continue to outperform metros, the metros and Tier 1 markets have also improved meaningfully versus last year. PAGE’s revenue base is currently split ~40% across Metro/Tier 1 and ~60% in Tier 2/Tier 3 markets.

* The 1QFY27 volume impact was largely a reporting-timing issue, with a four-day delivery delay affecting reported volume growth by ~4%. Management clarified that underlying tertiary performance and distributor-level secondary sales remain on track with its annual plan.

* PAGE continues to gain from narrowing price differentials vs value brands. It has refrained from its historical 3-3.5% annual price increases for the last four years, resulting in a 17-18% reduction in relative pricing. This has narrowed the price gap between Jockey and economy brands from 30-35% to 20-25%.

* Distribution remains a key growth driver, with PAGE operating 1,600+ EBOs and targeting 120-150 new stores annually over the next 3-5 years. Of the 150 EBOs added last year, 70 were in first-time EBO towns. The company is also adding 8,000-10,000 net new outlets annually and has established a dedicated rural vertical to deepen penetration in smaller towns.

* Women’s innerwear and athleisure remain key growth opportunities, supported by lower penetration and greater headroom. Smaller categories such as socks, handkerchiefs, and towels are also growing at high rates, albeit from a small base. PAGE continues to refresh its portfolio through an annual review of products.

* The company is expanding its international presence with a full-fledged GCC entry in 2Q-3QFY27, leveraging its existing manufacturing and product backend. Through its global licensee network, PAGE also gains ~12 months of advance visibility into market trends, enabling it to effectively adapt its international products and market strategies.

* Management is targeting double-digit volume growth and mid-teens value growth for the full year FY27, while maintaining operating margins within the sustainable 19-21% range. The ramp-up of the Odisha facility is currently resulting in temporary unabsorbed overheads, with stable operations and cost benefits expected from January 2028.

* The company maintains its FY27 target of double-digit volume growth and mid-teens revenue growth. The trade-related impact on 1Q volume growth is expected to be recouped, with management remaining positive about delivering growth in the coming quarters. The ~2% May price hike will fully reflect from 2QFY27, while 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 CAGR and 11% EBITDA CAGR over FY26-29E. We reiterate our BUY rating on the stock with a TP of INR43,000, premised on 45x Sep’28E EPS.

Demand: Sequential recovery gaining traction, with broad-based improvement across markets

* Management highlighted a steady recovery in consumption over the last three quarters, with 4QFY26 performing better than 3QFY26, and 1QFY27 showing further improvement from 4QFY26.

* Tier 2 and Tier 3 markets continue to outpace Metro/Tier 1 markets, although the latter have also witnessed a meaningful improvement versus last year. PAGE’s revenue base is currently split into ~40% across Metro/Tier 1 and 60% in Tier 2/Tier 3 markets, providing a broad-based consumption base.

* PAGE indicated that the improvement in metros is partly being driven by the rapid expansion of quick commerce and e-commerce. The addition of dark stores is leading to higher primary sales as platforms stock inventory to cater to localized demand. Within e-commerce, quick commerce is currently witnessing the fastest growth.

* 1Q volume growth was impacted by a temporary reporting-timing issue, as the transition to outsourced warehousing and logistics resulted in a four-day delivery delay at the end of 1QFY27, impacting reported volume growth by ~4%. Management clarified that the impact was largely timing-related, with underlying tertiary performance and distributor-level secondary sales remaining on track with the annual plan.

Valuation and view

* PAGE has had a remarkable track record of revenue and earnings growth over the past decade. Over FY16-26, it posted a CAGR of 11%/12%/14% in sales/EBITDA/PAT. Moreover, the company has delivered RoE of over 40% in the last 10 years.

* The women’s innerwear and athleisure segments continue to have several white spaces in the product portfolio. We expect PAGE to address these portfolio gaps, while digital and marketing efforts should help in market share gains.

* In our view, inventory optimization through the ARS system, new product launches, capacity expansion, and digitalization initiatives will support growth. PAGE’s brand equity is also evolving beyond its traditional innerwear positioning toward a broader lifestyle brand, enabling the company to extend its relevance across product lines.

* The company maintains its target of 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% May price hike will fully reflect from 2QFY27, while 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 CAGR and 11% EBITDA CAGR over FY26-29E. We reiterate our BUY rating on the stock with a TP of INR43,000, premised on 45x Sep’28E EPS.

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