Page Industries Ltd, the company behind popular brands like Jockey and Speedo, is actively searching for the final piece to complete its ambitious comeback plan. The manufacturer has been grappling with persistently muted growth, leaving investor confidence shaky despite its concerted efforts to turn the tide.
Operational Efficiencies Fail to Spark Investor Confidence
Last week, the company's shares touched a new 52-week low of ₹38,160, cementing a worrying trend that has seen the stock decline by 18% so far in 2025. This performance comes as a disappointment, especially since volume growth was anticipated to improve starting from the September quarter (Q2FY26) as trade inventory levels normalized.
However, this expected recovery did not materialize, hampered by ongoing dull consumer demand and intense market competition. The numbers tell a sobering story: volume grew a mere 2.5% year-on-year, while realization saw a minimal 1% increase. The result was a modest overall revenue growth of approximately 3.6%.
The company's own strategy of deliberate channel de-stocking has contributed to volatile volume growth in recent times. Q2FY26 marked the second quarter in a row of low-single-digit volume growth, though the management has expressed optimism that this volatility will begin to moderate moving forward.
New Product Launches and Margin Pressures
In a bid to reclaim its growth trajectory, Page Industries is heavily reliant on new product introductions. The company launched a new line featuring bonded technology in bras and men's innerwear in September. Positioned at a premium to the standard Jockey range, management reports an encouraging initial consumer response.
Other bright spots include the continued strong performance of the JKY Groove athleisure line. The Spring Season Collection was notably successful, and a new winter line is scheduled for launch within the next two weeks.
On the profitability front, Q2FY26 offered a mixed bag. The company witnessed a sharp year-on-year gross margin expansion of 345 basis points, a positive development driven by stable raw material prices and a more efficient product sourcing strategy.
However, this was offset by rising costs. The Ebitda margin fell to 21.7%, impacted by higher staff expenses. While this figure remains above the management's guidance range of 19-21%, analysts warn that the Ebitda margin faces clear downside risk if revenue growth does not accelerate, particularly while marketing spends remain elevated.
Brokerages Downgrade Amid Rich Valuations
The challenging environment has not gone unnoticed by financial institutions. A clear divergence in performance is visible, with premium range products outperforming entry-level categories across innerwear, women’s wear, and athleisure. This weak sentiment for entry-level products is adversely affecting the company's ability to attract new customers.
In response to these headwinds, several brokerages have revised their earnings estimates for FY26 and FY27 downwards. JM Financial Institutional Securities highlighted the company's muted long-term performance, noting, "Overall performance over a longer period also has been muted versus its own historical performance; we note revenue/profit after tax growth over FY19-25 has been only in low double digits and FY26 also appears to be a dismal year."
Despite these growth concerns, the stock continues to trade at a rich valuation, commanding a FY27 price-to-earnings multiple of 50x, according to Bloomberg data. This places significant pressure on the company to deliver a robust recovery in the second half of the fiscal year to justify investor faith and its current market price.
