Target: ₹39,450
CMP: ₹45,485.10
We reiterate Reduce on Page Industries, keeping our target price unchanged at ₹39,450 (45x Jun-27E EPS), on account of a likely increase in competitive intensity amid muted demand trends.
RelDel, the JV between RIL Retail (RRVL) and Delta Galil, has recently launched French innerwear brand Athena in India. While it is still initial days, we will keenly watch this ramp-up given RIL’s large disruptions across Telecom, Retail, and FMCG. The JV is aimed at leveraging RRVL’s retail expertise and Delta Galil’s research/manufacturing excellence, to offer innovative products at relatively accessible price-points (MRP difference of 15-20 per cent).
Current channel margins, though, are broadly in line with the market. Delta Galil is a global manufacturer/marketer of innovative seamless innerwear ($2 billion scale in CY24; about 9 per cent CAGR over CY11-24) and has leading market share across Israel. It also sells its products under licensed brands, including Adidas, Columbia, Tommy Hilfiger, Lululemon, etc. Helped by its ‘Stay New’ feature and attractive product value proposition, the brand has garnered decent initial interest for men’s inner-wear in its maiden distributor meet, per our checks.
Page Industries currently trades at about 60x 1-year forward and continued slow growth poses a de-rating risk, in our view.