Page Industries Limited

Bloomberg Ticker: PAG: IN | Sector: Consumer Goods, Cyclical | Industry: Textile – Apparel Clothing | Sub Industry: Apparel Manufacturers

Page Industries Limited
Company Valuation
10/7/2011

FinExpertise- Research & Valuation
Analyst: Rajat Dhar
Contact Details:
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October 7, 2011 [PAGE INDUSTRIES LIMITED] www.finexpertise.blogspot.com

Table of Contents
Section Page#
1 Review of Page Industries Limited. 3
A Industry Structure & Development 4
B Business / Segment Overview 5
C Product Line 6
2 Financial Overview - Page Industries 7
A Common size Statement Analysis 8
a Balance Sheet Analysis 8
b Profit & Loss Analysis 9
3 Historical Stock Trend Analysis 10
Price-Volume
A Graph 11
B Indexed Stock Price Performance 11
4 Valuations 12
A Current Valuations 13
B Adjusted Clean Numbers (LTM / TTM) 13
Projection
C Snapshot 13
5 Financial Review - Detailed 14
A Historical & Projected Financial Review 15
B Raw Material's Analysis 16
C Internal Liquidity Analysis 17
D Operating Performance Analysis 18

FinExpertise – Research & Analytics. .All Rights Reserved. Page 2


Table of Contents (…contd)
Section Page#
6 Risk Analysis 19
A Financial Risk Analysis 20
B Business Risk Analysis 21
7 Growth Analysis 22
A Key Growth Statistics 23
B DUPONT Analysis 23
C Stock Projections 23
8 Profile 24
A Shareholding Pattern 25
B Management Profile 26
C Contact Details 26
9 Analyst Details 27
A Brief Profile
B Key Expertise
10 Contact Details 28
11 Disclaimer 28



1. Review of Page Industries Limited
A. Industry Structure & Development
B. Business / Segment Overview
C. Product Line



A. Industry Structure & Development
The domestic innerwear industry is valued by industry sources at Rs. 140 billion, accounting for 9% of the Indian apparel industry (valued at Rs. 1500 billion).Wo men’s
innerwear accounts for 66% of spend on innerwear (Rs. 90 billion) while men’s innerwear accounts for 34% (Rs. 50 billion).The innerwear market is growing at a faster rate
than overall apparel market, and has been witnessing 16% revenue CA GR over FY 06-10.

The innerwear market can be d ivided into lo w, econo my, middle, premiu m and super – premiu m segments. The premiu m and super – premiu m segments are branded markets
characterized by faster growth. As per KSA Techno Pack Report 2005 the men’s premiu m market is growing at the rate of 28% per annu m and super premiu m market is
growing at the rate of 40% per annum. Similarly wo men’s innerwear premiu m market is growing at the rate of 31% per annum and super premiu m market is growing at over
40% per annum.

Govern ment of India has extended the Technology Upgradation Fund (TUF) for the eleventh five year plan and has increased fund allocation. Govern ment of India is also
setting up various apparel Parks, integrated textile parks and Special Economic Zones in partnership with private sector.

Opportunities: The premiu m innerwear industry is expected to grow at high rate due to the follo wing factors.

1. Rising urbanization as well as penetration of organized retailing.
2. Increasing brand aspiration among consumers
3. Higher disposable inco me
4. Change in consumer behaviour
5. Shift fro m unorganized to organized sector
6. Larger marketing spend by companies creating general awareness of the product
7. Rap id e xpansion of modern retail format

Threats:

All the majo r international innerwear Brands have commenced operations in India realizing that the Indian Market is likely to emerge as one of the largest market in the
World in the next few decades.

Outlook:

In anticipation of gro wing demand, the Co mpany has substantially expanded its installed production capacity. And with the ongoin g addition of new buildings, infrastructure
and facilities, the installed capacity is scalable and can be ramped up with incremental machinery to meet the expected healthy growth in demand.



B. Business / Segment Overview.
(in INR
Mn)
Key Financial Indicators
2007 2008 2009 2010 2011 2012 (E) 2013 (E) 2014 (E)
Revenue 1359.39 1923.48 2546.51 3393.80 4915.62 7,127.6 10,335.1 14,985.9
EBITDA 206.38 339.33 657.38 1475.51 1232.31 1,926.3 3,011.3 4,707.2
EBIT 148.27 245.56 508.80 1238.12 903.92 1,437.9 2,287.2 3,638.3

EPS 5.66 13.51 34.95 95.74 60.99 93.42 135.46 196.42
DPS 4.37 10.00 17.00 21.00 26.00 42.04 70.44 102.14
Source: Company, FinExpertiseResearch

Page Industries Limited
Page Industries is the exclusive licensee of Jockey International Inc. (USA) and has recently signed an agreement to become t he exclusive licensee for the Speedo brand
as well. It is positioned as the Premiu m brand in India. The Co mpany is engaged in the business of manufacturing garments. Therefore there is no separate reportable
segment. The Co mpany is engaged in the business of “Manufacturing of Garments”. As the basic nature of these articles are g overned by the same set of risk and returns,
these have been re-grouped as a single business segment. Further the co mpany sells primarily in the do mestic market where its operations are gov erned by the same set of
risks and returns and the overseas sales are insignificant. Accordingly the separate primary and secondary segment reporting disclosure as envisaged in Accounting
Standard (AS - 17) on Seg mental Reporting notified by the Co mpanies (Accounting Standard) Rules 2006 is not applicable to the company.

Manufacturing Distribution Marketing
Innerwear Leisure wear
Men Men
Women Women
Source: Company Filings



C. Product Line of Page Industries Limited

Men's Women's Sports &
Innerwear Innerwear Leisure Thermals

3D Innovations Active Bras
Sport Performance
Zone Stretch
Essence Bras Mens
Comfort Stretch
Gold Edition Signature Stretch Sport
Elance Soft Wonder
Zone Lace Stretch 24x7 Stretch
Comfort Plus
Comfies Women's
Modern Classic
Socks
Boy's Simple Comfort



2. Financial Overview of Page Industries Limited
A.Common Size Statement Analysis –
a. Balance sheet Analysis
b. Profit & Loss Analysis


a. Common Size Statement Analysis –Balance Sheet
2007 2008 2009 2010 2011
Balance Sheet
Value % Value % Value % Value % Value %
Assets
Current Assets
Cash & Cash Equivalents 301.91 29.8% 1.75 0.1% 102.98 5.3% 29.53 1.1% 25.81 0.8%
Trade Accounts Receivables - net of Allowances 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0%
Inventories 363.73 35.9% 573.85 40.6% 679.86 34.8% 945.50 35.8% 1647.16 50.1%
Other Current Assets 2.72 0.3% 7.76 0.5% 0 0.0% 0 0.0% 0 0.0%
Interest Accrued on Investments 0 0.0% 0 0.0% 0.96 0.0% 0.10 0.0% 0 0.0%
Sundry Debtors 55.76 5.5% 91.20 6.4% 169.90 8.7% 204.55 7.7% 258.46 7.9%
Loans & Advances 100.92 10.0% 327.71 23.2% 448.63 23.0% 688.80 26.1% 423.13 12.9%
Total Current Assets 825.04 81.5% 1002.27 70.8% 1402.34 71.8% 1868.48 70.7% 2354.55 71.7%

Fixed Assets
Property Plant & Equipment 245.75 24.3% 506.57 35.8% 698.48 35.8% 1012.98 38.3% 1258.93 38.3%
Accumulated Depreciation 58.11 5.7% 93.78 6.6% 148.58 7.6% 237.39 9.0% 328.39 10.0%
Property Ne t 187.64 18.5% 412.79 29.2% 549.90 28.2% 775.59 29.3% 930.54 28.3%
Other Non-current Assets
Total Assets 1012.67 100.0% 1415.06 100.00% 1952.24 100.0% 2644.07 100.0% 3285.10 100.0%
Liabilities & Shareholder's Equity
Current Liabilities
Short Term Debt 29.94 1.8% 0 0.00% 0 0.0% 100.00 3.5% 594.36 16.6%
Current Portion of Long Term Debt 0 0.0% 0 0.00% 0 0.0% 0 0.0% 0 0.0%
Trade Accounts Payable 0 0.0% 0 0.00% 0 0.0% 0 0.0% 0 0.0%
Accrued Expenses & Other Liabilities 0 0.0% 0 0.00% 0 0.0% 0 0.0% 0 0.0%
Income Tax Payable 8.35 0.5% 26.58 1.23% 16.80 0.7% 19.76 0.7% 25.56 0.7%
Total Current Liabilities 38.29 2.3% 26.58 1.23% 16.80 0.7% 119.76 4.2% 619.92 17.3%
Long Term Debt 223.30 13.6% 372.01 17.20% 194.89 8.3% 186.97 6.6% 404.82 11.3%
Other Non-current Liabilities/Provisions 27.72 1.7% 206.03 9.53% 391.30 16.7% 544.24 19.2% 78.40 2.2%
Deferred Income T ax Asset 0 0.0% 10.28 0.48% 0 0.0% 0 0.0% 0 0.0%
Preferred Stocks 0 0.0% 0 0.00% 0 0.0% 0 0.0% 0 0.0%
Share Capital 120.00 7.3% 120.00 5.55% 120.00 5.1% 120.00 4.2% 120.00 3.4%
Paid-in Capital 111.54 6.8% 111.54 5.16% 111.54 4.8% 111.54 3.9% 111.54 3.1%
Reserve & Surplus 565.68 34.4% 662.21 30.62% 756.68 32.3% 878.74 31.0% 1126.23 31.5%
Retained Earnings 114.73 7.0% 107.67 4.98% 94.46 4.0% 122.06 4.3% 247.49 6.9%

Total Common Shareholder's Equity 677.22 41.2% 773.75 35.78% 868.22 37.1% 990.28 35.0% 1237.77 34.6%
Total Liabilities & Shareholder's Equity 1643.74 100% 2162.40 100% 2339.42 100% 2831.52 100% 3578.69 100%
Source: Analyst’s Estimates, Company filings



b. Common Size Statement Analysis – Profit & Loss Statement
2007 2008 2009 2010 2011
P&L Statement
Value % Value % Value % Value % Value %

Ne t Sales 1359.39 100% 1923.48 100% 2546.51 100% 3393.80 100.0% 4915.62 100%
Cost of Goods Sold 1028.21 75.6% 1378.42 71.7% 1680.95 66.01% 1636.38 48.2% 3305.64 67.2%
Gross Profit 331.19 24.4% 545.06 28.3% 865.56 33.99% 1757.42 51.8% 1609.98 32.8%
SG&A 182.92 13.5% 299.50 15.6% 356.77 14.01% 519.30 15.3% 706.06 14.4%
Ope rating Profit 148.27 10.9% 245.56 12.8% 508.80 19.98% 1238.12 36.5% 903.92 18.4%
Interest Income 4.71 0.3% 19.34 1.0% 29.70 1.17% 10.51 0.3% 8.2584 0.2%

Interest Expense/Bank Charges (23.64) (0.02) (33.82) (0.02) (30.68) (0.01) (29.74) (0.01) (52.25) (0.01)
Other Income 22.57 1.7% 25.50 1.3% 34.14 1.34% 38.09 1.1% 112.70 2.3%
PBT 151.91 11.2% 256.58 13.3% 541.95 21.28% 1256.98 37.0% 972.62 19.8%
Provision for income Taxes 88.76 6.5% 105.89 5.5% 152.09 5.97% 189.07 5.6% 292.35 5.9%
PAT 63.15 4.6% 150.70 7.8% 316.30 12.42% 396.10 11.7% 680.27 13.8%
Extraordinary loss (Income) 0.00 0.0% 0.00 0.0% 0.00 0.00% 0.00 0.0% 0.00 0.0%

Reported Net Income 63.15 4.6% 150.70 7.8% 316.30 12.42% 396.10 11.7% 680.27 13.8%
Source: Company Filings, FinExpertise Research

Balance Sheet Analysis: Apart from in 2007, CCE was maintained under 1.5% of total assets till 2011, the variations seen were 29.8% & 5.3% in 2007 &
2009 respectively. The area of concern is the steady increase in the Inventories from 35.9% in 2007 to 50.1% in 2011; and also sundry debtors are seen
increased from from 5.5% in 2007 to 7.9% of total assets in 2011. Total current liabilities are 17.3% of total liabilities & shareholder’s equity in 2011,
which has 16.6% weightage of short term debt. Between 2007 till 2010, the figure remained under 4.5% range.

P&L Analysis: Cost of Goods Sold (COGS) have seen steady decline from 75.6% in 2007 to 67.2% of net sales in 2011. 2010 saw drastic fall in COGS on
account of a great fall in cotton prices, with COGS being 48.2% of total sales. In 2011, when the sales increased by 44.8% over 2010,but EBIT fell by
27.0% on account of cotton prices again moving up. PAT has increased consistently as percentage of sales from 4.6% in 2007 to 13.8% in 2011. They
have also controlled their Selling General & Administrative (SG&A) under 15.5% levels.



3. Historical Stock Trend Analysis
A. Price-Volume Graph
B. Indexed Stock Price Performance

/



A.Comparative Price-Volume Graph
250000
BSE – Price-Vol 25000 7000000
PAG:IN – Price-Vol 3000
6000000 2500
200000 20000
5000000
2000
150000 15000 4000000
1500
100000 10000 3000000
1000
2000000
50000 5000 500
1000000
0 0 0 0

Source: www.bseindia.com
B.Indexed Stock Price Performance Comparison Graph

1200.00
The stock has truly being a performer and has
1000.00 beaten Sensex based on its strong fundamental
growth, which is showcased by its year-on-year
800.00
PAGE Ind. Sensex
performance.
600.00
Fundamentally, we see the stock price to be INR
400.00 3609.15/- by 2013 end and INR 5,233/- by 2014
end.
200.00
Trailing P/E (TTM) being 26.81, while forward
0.00 P/E being 26.26.
16-03-2007 16-03-2008 16-03-2009 16-03-2010 16-03-2011



4. Valuation - Page Industries Limited
A. Current Valuation
B. Adjusted Clean Numbers
C. Projections Snapshot



A. Current Valuation – PAG: IN B. Adjusted Clean
Numbers INR
Current Previous
(INR in Mn except
per share data) Annual Stub Stub LTM
Selected Balance Sheet Adjusted Gross Profit 2506.91 967.09 506.87 2967.13
Stock Price Current Value Items (31/03/2011) Adjusted EB IT 1024.87 511.58 138.29 1398.16
Stock Fully
Adjusted EB ITDA 1123.17 511.58 138.29 1496.46
Price(07 Diluted
Oct'11) 2,452.8 Shares 11.15 Cash 25.54 Adjusted Net Income 720.59 374.48 74.73 1020.33
52 Adjusted Profi t for
Week Equity Equi ty Hol ders 720.59 374.48 74.73 1020.33
High 2,772.0 Value 27,357.66 Total Debt 1,149.58
Adjusted B asic EPS 64.60 33.57 6.70 91.48
52
Week Enterprise Shareholders' Adjusted Diluted EPS 64.60 33.57 6.70 91.48
Low 1,211.0 Value 28,481.71 Equity 1,237.77
Trailing P/ E 26.81
Forward P/ E 26.26
Source: BSE, Bloomberg, Company Filings, Analyst’s Deductions Source: Analyst’s analysis
C. Projection Snapshot
Enterprise Value Multiples P/E Multiple
%(52-Wk Enterprise
CMP M.Cap Sales EBITDA EBIT PE
High) Value
LT M FY12(E) FY13(E) LT M FY12(E) FY13(E) LT M FY12(E) FY13(E) LT M FY12(E) FY13(E)

2,452.75 88% 27,357.66 28,481.71 9.60x 4.00x 2.76x 19.03x 14.79x 9.46x 20.37x 19.81x 12.45x 26.81x 26.26x 18.11x
Source: Analyst’s estimates

Analyst Net
Estimates Revenue Income EBITDA EBIT Page Industries Limited has the Enterprise Value of INR 28,481.71/- Mn. ,
2012(E) 7,127.6 5,785.2 1,926.3 1,437.9 with Market Capitalisation being INR 27,357.66/- . Since, EV & P/E multiples
decrease in the future, it clearly shows strong signs of growth of sales and
2013(E) 10,335.1 8,388.5 3,011.3 2,287.2
3,638.3 the resulting EBITDA, EBIT and P/E multiples.
2014(E) 14,985.9 12,163.3 3,638.3
Source: Analyst’s estimates



5. Financial Review - Detailed
A. Historical & Projected Financial Analysis
B. Raw Material’s Analysis
C. Internal Liquidity Analysis
D. Operating Performance Analysis



A. Historical & Projected Financial Analysis
(INR in Mn, unless specified otherwise) 2007 2008 2009 2010 2011 CAGR 2012 (E) 2013 (E) 2014 (E)

Total Assets (Mn) 972.54 1,110.87 1,340.06 2,004.48 2,927.32 31.7%

Revenue 1,359.39 1,923.48 2,546.51 3,393.80 4,915.62 37.9% 7,127.64 10,335.08 14,985.87

Total Assets Turnover 1.40x 1.73x 1.90x 1.69x 1.68x

PAT 63.15 150.70 389.86 1,067.91 680.27 81.2% 5,785.18 8,388.51 12,163.34
Net Profit Margin 4.6% 7.8% 15.3% 31.5% 13.8% 14.6% 14.6% 14.6% 14.6%
Annual Rate of Growth in Revenue n.m. 41.5% 32.4% 33.3% 44.8%
Annual Rate of Growth in EBIT n.m. 65.6% 107.2% 143.3% -27.0% 59.1%
Annual Rate of Growth in EBITDA n.m. 64.4% 93.7% 124.5% -16.5% 56.3%
Annual Rate of Growth in PAT n.m. 138.6% 158.7% 173.9% -36.3% 81.2%
Annual Rate of Growth of Dividends n.m. 129.0% 70.0% 23.5% 23.8% 61.6%
Annual Rate of Growth of EPS n.m. 138.6% 158.7% 173.9% -36.3%
Gross Profit Margin 24.4% 28.3% 34.0% 51.8% 32.8%
EPS 5.66 13.51 34.95 95.74 60.99 34.2% 93.42 135.46 196.42
DPS 4.37 10.00 17.00 21.00 26.00 42.04 70.44 102.14
Payout Ratio 77.1% 74.0% 48.6% 21.9% 42.6% 52.9% 45.00% 52.00% 52.00%
P/E 52.30 30.87 10.30 8.34 26.64 25.69
Dividend Yield (%) 1.47% 2.40% 4.72% 2.63% 1.60%

Share Price (ending March-xx) 296.10 417.10 360.00 798.05 1,625.00 2,489.07 3,609.15 5,233.27
Source: Analyst’s analysis, Company Filings
PEG Ratio n.m. 22.27 6.49 4.79 -73.40
During 5-year duration from 2007-11, while revenue increased at CAGR of 39.9% , EBIT saw a increase of 59.1% . During the same period Net Income increased
by 81.2% . Due to steep increase in the stock price we see the dividend yield decreasing from 4.72% in 2009 to 1.60% in 2011. Payout ratio decreased from
77.1% in 2007 to 21.9% in 2010 before increasing to 42.6% in 2011.



B. Raw Material’s Analysis
2007 2008 2009 2010 2011
Description (in Mn) Value Value %(y-o-y) Value %(y-o-y) Value %(y-o-y) Value %(y-o-y)
Bra Accessories 6.66 29.16 337.6% 56.50 93.7% 37.61 -33.4% 91.34 142.9%

Elastic - - n.m. - n.m. - n.m. 20.9 n.m.

Imported Labels - - n.m. - n.m. - n.m. - n.m.

Yarn Socks & Elastic - - n.m. - n.m. - n.m. 41.8 n.m.

Total 6.66 29.16 337.6% 56.50 93.7% 37.61 -33.4% 154.04 309.6%
Yarn 332.74 391.12 17.54% 532.70 36.20% 884.77 66.1% 1333.62 50.7%
Woven Fabric 37.91 99.54 162.56% 106.31 6.80% 109.69 3.2% 184.99 68.6%

Elastic 73.96 61.36 -17.03% 36.29 -40.85% 38.61 6.4% 16.45 -57.4%
Indigenous
Consumables - 4.42 n.m. 10.94 147.67% 27.22 148.8% 44.33 62.9%

Packing Materials - 12.32 n.m. 13.75 11.55% 17.27 25.6% 294.77 1606.8%
Others 124.77 157.23 26.02% 205.65 30.79% 30.43 -85.2% 189.49 522.7%
Total 569.38 726.00 27.51% 905.6422 24.74% 1107.99 22.3% 2063.65 86.3%

Indegineous:
Boughtouts Socks 13.19 9.84 -25% 15.5 57% 7.12 -54% 268.00 3664%
Readymade/Finished Garments 0 6.45 n.m. 0 n.m. 0 n.m. 0 n.m.
Total 13.19 16.29 24% 15.5 -5% 7.12 -54% 268 3664%

Grand Total 589.24 771.45 31% 977.65 27% 1152.72 0.179078 2485.69 116%

Apart from the increase in the imports of the Bra accessories, we see imports of ‘Elastics’ & ‘Yarn socks and elastics’. Since 2007 till 2011, we see great reduction
y-o-y in use of indigenous elastics with value falling from INR 73.96 Mn /- in 2007 to INR 16.45 Mn/- in 2011. There has been a phenomenal increase in indigenous
paking materials and those categorised under ‘other category’. Indigenous socks Boughtouts have seen approximate increase of INR 258 Mn/- in expenditure.



C. Internal Liquidity Analysis

2007 2008 2009 2010 2011
Value Value %(y-o-y) Value %(y-o-y) Value %(y-o-y) Value %(y-o-y)
Current Ratio 21.55 37.70 75.0% 83.49 121.4% 15.60 -81.3% 3.80 -75.7%
Liquidity
Analysis

Quick Ratio 12.05 16.12 33.8% 43.01 166.9% 7.71 -82.1% 1.14 -85.2%
Cash Ratio 7.88 0.07 -99.2% 6.13 9232.2% 0.25 -96.0% 0.04 -83.1%

Receivables Turnover Ratio 24.38 21.09 -13.5% 14.99 -28.9% 16.59 10.7% 19.02 14.6%
Average Collection Period
(Days) 14.77 17.07 15.6% 24.02 40.7% 21.70 -9.7% 18.93 -12.8%
Activity Analysis

Inventory Turnover Ratio 5.43 4.62 -15.0% 4.72 2.1% 5.58 18.4% 11.27 102.0%
Days of Inventory Holdings
(Days) 66.25 77.98 17.7% 76.35 -2.1% 64.50 -15.5% 31.93 -50.5%
Payables Turnover Ratio 9.71 7.89 -18.7% 11.61 47.1% 6.69 -42.4% 10.77 61.1%
Payables Payment Period
(Days) 37.07 45.61 23.0% 31.00 -32.0% 53.85 73.7% 33.42 -37.9%
Cash Conversion Cycle (Days) 43.95 49.45 12.5% 69.37 40.3% 32.35 -53.4% 17.44 -46.1%
*Avg. Period = 360 Days

Page Industries Ltd had excess liquidity which was gradually trimmed to current ratio, quick Ratio & Cash ratio of 3.8, 1.14 & 0.04 respectively. Thus, it has
freed much of its cash. The management of credit has improved post 2009, resulting in reduced ACP (Average Collection Period) from 24.02 Days in 2009
to 18.93 Days in 2011. The company has good inventory management with days in Inventory holdings (DIH) are now down to 31.93 Days in 2011 from
76.35 Days in 2009. The has been about 46% reduction on the Cash Conversion Cycle (CCC) from 32.35 Days in 2010 to 17.44 Days in 2011.



D. Operating Performance

2007 2008 2009 2010 2011
Description % (y- % (y-o- % (y- % (y-
Value Value o-y) Value y) Value o-y) Value o-y)
Total Asset Turnover 1.34 1.36 1.3% 1.30 -4.0% 1.28 -1.6% 1.50 16.6%
Operating
Efficiency

Net Fixed Asset Turnover 7.24 4.66 -35.7% 4.63 -0.6% 4.38 -5.5% 5.28 20.7%
Equity Turnover 2.01 2.49 23.8% 2.93 18.0% 3.43 16.8% 3.97 15.9%

Gross Profit Margin 24.4% 28.3% 34.0% 51.8% 32.8%
Profitability
Operating

Operating Profit Margin 10.9% 12.8% 20.0% 36.5% 18.4%
Net Profit Margin 4.6% 7.8% 12.4% 11.7% 13.8%

Return on Total Assets 9.76% 17.35% 26.06% 46.83% 27.52%
Investment (ROI)

Return on Net Assets 52.7% 59.5% 92.5% 159.6% 97.1%
Return on

Return on Owner's Equity 187.9% 240.4% 188.7% 189.3% 225.3%
ROE 9.3% 19.5% 36.4% 40.0% 55.0%
ROI- Before Tax 16.0% 18.0% 35.0% 71.9% 52.5%
PAT/EBIT 0.43 0.61 44.1% 0.62 1.3% 0.32 n.m. 0.75 135.2%

Better utilisation of assets have resulted in the higher total asset turnover ratio which recovered from the low of 1.28 in 2010 to 1.50 in 2011. Net Fixed
Assets Turnover improved by 20.7% from 4.38 in 2010 to 5.28 in 2011. NPM saw the gradual increase from 4.6% in 2007 to 13.8% in 2011. Gross Profit
Margin saw increased to 51.8% in 2010 as compared to 34% in 2009. Although the higher ROI in 2010 is very much attributed to the low cost of raw
matrials, the 2011 figure justifies its srong performance as it is above those of 2009 and the preceding years. Before Tax ROI has increased to 52.5% in
2011 from 16% in 2007.



6. Risk Analysis - Page Industries Limited
A. Financial Risk Analysis
B. Business Risk Analysis



A. Financial Risk Analysis

2007 2008 2009 2010 2011
Value %(y-o-y) Value %(y-o-y) Value %(y-o-y) Value %(y-o-y) Value %(y-o-y)
Financial Risk Analysis
n.m.
Debt-Equity Ratio 0.33 0.49 49.8% 0.22 -54.6% 0.19 -15.9% 0.33 73.2%
Leverage Analysis

Long Term Debt / Total Capital n.m.
Ratio 0.37 0.75 101.5% 0.68 -9.6% 0.74 9.4% 0.39 -47.1%
n.m.
Total Debt Ratio 0.31 0.45 44.8% 0.41 -8.2% 0.49 19.2% 0.64 29.7%
n.m.
Capital Equity Ratio 1.33 n.m. 1.49 12.4% 1.22 -18.0% 1.19 -2.9% 1.33 11.6%
Interest Coverage Ratio 6.27 n.m. 7.26 15.8% 16.58 128.4% 41.63 151.1% 17.30 -58.4%
-
Cash Flow
Coverage
Analysis

CF / Long Term Debt Ratio 0.36 n.m. 0.21 -42.1% 0.54 155.4% 0.41 -24.2% -0.003 100.8%
-
CF / Total Debt Ratio 0.32 n.m. 0.20 -37.3% 0.52 164.1% 0.35 -33.0% 0.00 100.4%
Working Capital/Total Assets 0.78 0.69 0.71 0.66 0.53
Test Ra tios
Some more
Insolvency

Cash/ Current Liabilities 7.88 0.07 6.13 0.25 0.04
Retained Earnings/Total Assets 0.11 0.08 0.05 0.05 0.08
Working Capital/Sales 0.58 0.51 0.54 0.52 0.35
Source: Analyst’s analysis,

The lenders have financed 64% of assets in as per 2011 figures, up from 49% in 2010. Due to increase in Debt financing, we have seen ICR (Interest
Coverage Ration to fall 41.63 times in 2010 to 17.30 times in 2011. Better management of Working Capital have resulted in the Working Capital to be 53%
of the total assets in 2007, down from 78% approx. in 2007. The company has freed any excess cash, leading to better management of resources.



B. Business Risk Analysis

Business Risk

Standard Deviation of Operating Earnings 457.49
Variability
Operating
Earning's

Mean Operating Earnings 608.93
Coefficient of Variation of Operating Earnings 0.75
Standard Deviation of Sales 1390.366
Variability
Sales

Mean Value of Sales 2827.76
Coefficient of Variation of Sales 0.49

Source: Analyst’s analysis

Page Industries has high Coefficient of Variation of Operating Earnings of about 0.75; while that of Sales is 0.49 only.

This primarily due to the impact of Raw Materials and the changes in their prices involved.



7. Growth Analysis - Page Industries Limited
A. Key Growth Statistics
B. DUPONT Analysis
C. Stock Projections



A. Key Growth Statistics B. DUPONT Analysis

DU PONT
Growth Analysis 2007 2008 2009 2010 2011 ANALYS IS 2007 2008 2009 2010 2011
Value Value Value Value Value EBIT/SALES 0.11 0.13 0.20 0.36 0.18
Retention Rate 0.23 0.26 0.51 0.78 0.57 PBT/EBIT 1.02 1.04 1.07 1.02 1.08
PAT/PBT 0.42 0.59 0.72 0.85 0.70
ROE 9.3% 19.5% 36.4% 40.0% 55.0% 40.0%
ROE 9.3% 19.5% 36.4% 55.0%
Total Asset
Source: Analyst’s analysis
Turnover 1.34 1.36 1.30 1.28 1.50

Equity Turnover 2.01 2.49 2.93 3.43 3.97 Page Industries has has seen marginal increase in sustainable growth rate
Net Profit Margin 4.6% 7.8% 12.4% 11.7% 13.8% in 2011 of 31.53% as compared to 31.23% in 2010.
Sustainable
Growth Rate (%) 2.13 5.06 18.71 31.23 31.53 Although, the DUPONT figures reflect 55% ROE in 2011, the PAT/EBIT
showed lower esults as compared with 2010 figures.
Source: Annual Report 2010-11

B. Stock Projections
*Average Value

(INR in Mn, unless specified otherwise) 2007 2008 2009 2010 2011 CAGR 2012 (E) 2013 (E) 2014 (E)
Gross Profit Margin 24.4% 28.3% 34.0% 51.8% 32.8% 34.2%
DPS 4.37 10.00 17.00 21.00 26.00 0 42.04 70.44 102.14
Payout Ratio 77.13% 74.0% 48.6% 21.9% 42.6% 52.9% 45.0% 52.0% 52.0%
P/E 52.30 30.87 10.30 8.34 26.64 25.69*
Dividend Yield (%) 1.47% 2.40% 4.72% 2.63% 1.60% Source: Analyst’s analysis

We are projecting the Dividend per Share of INR 102.14, INR 70.44 42.04 in 2014, 2013 and 2012 respectively. Dividend Yield appears to be decreasing
on account of th stock prices moving up sharply.



8. Profile - Page Industries Limited
A. Shareholding Pattern
B. Management Profile –Board Composition
C. Contact Details



A. Shareholding Pattern
Promoter & Promoter Group Public
Indian Foreign Institution FII DII Non Institution Body Corporate
22,32,320 4466305 38,05,123 15,36,362 22,68,761 6,50,126 1,08,934
Source: Company Filings

Macro View Body
Subdivision - Public Holdings Corporate
Non Institution 1%
8%
Promoter &
Promoter DII
Group Institution
Public 27%
44% 46%
56%
FII
18%

Non Institution Body
4%
Entity-wise Corporate
1%

DII Indian
15% 15%
FII
10%
Foreign
30%
Institution
25%



B. Management Profile - Board Composition

Chairman &
Independent Managing Non-Executive Independent
Director Directors Directors
Director
Mr. Ramesh
Genomal

Mr. Pradeep Mr. Sunder Mr. Nari
Mr. G P Albal
Jaipuria Genomal Genomal

Mr. Timothy
RalphWheeler

Source: Annual Report 2010-11
C. Contact Details
Registered Address
6/2 & 6/4, Abbaiah Reddy Industrial Area, Jockey Campus, Hongasandra,
Begur Hobli, Bangalore 560068
Telephone +(91)-80-25732952
Fax +(91)-80-25732226
Email investors@jockeyindia.com
Website www.jockeyindia.com



About The Analyst:
Profile:
Rajat Dhar is an Investment Banking Analyst who holds a Bachelor of Engineering Degree from University of Pune, and has done PGDM in
Marketing. He started his career as a banker in HDFC Bank Ltd and subsequently moved into Wealth Management space in H SBC. He has
approximately 3.5 Years of Banking & Wealth Management expertise. He is IRDA & AMFI-Dealer’s Module certified. He has undertaken rigorous
training in Financial Modelling and Investment Banking at ARC Academia, India Office of Wall St. Training Institute – New York.

Key Expertise:
He is an independent Investment Banking Analyst with expertise in Oil & Gas segment.
His core specialities include Financial Modelling / Equity Reports / Company Reports / Sector Reports / Transaction Advisory / Trading Comparables /
DCF Valuation / Pitch Books / Equity Portfolio Management / Financial Planning & Advisory.
He is a visiting faculty at Amity University, and has co-chaired many panel discussions with latest being “The paradigm shift in Financial Markets post
liberalisation of 1990s, and its impact on Global Markets”. His research reports are also published at Thomson Reuters.
His works are publically available at: http://www.fixexpertise.blogspot.com

He is associated with a couple of firms / institutes of repute.

Firms* Institues*
• ARC Financial Services • Amity University
• RMJ Commodity Pvt Ltd • ARC Academia
• S R Bagai & Company • IREF
• South Asian Stocks Ltd • RMJ Institute of Capital Markets

*Arranged in Alphabetical Order



Contact Details We are Launching a fully dedicated website for Research & Valuation in a week’s time by
25Th Oct’11, hosting scores of Research Reports. Stay in touch.
Analyst: Rajat Dhar
FinExpertise – Research & Analytics
For more copies or other information, contact

Institutional/Retail: Rajat Dhar
Phone: + (91) 9999.760.359 E-mail: rajat.dhar1@yahoo.com
Blog: www.finexpertise.blogspot.com
FinExpertise, 3rd Floor, Malviya Nagar, New Delhi 110 017.

Disclaimer
This Re port is based on data publicly available or from sources considered reliable by the Analyst. However, the Analyst does not guarantee the accuracy, ade quacy or completeness of the Data / Re port
and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. The Data / Report are subject to change without any prior notice . Opinions expressed he rein are
our current opinions as on the date of this Report. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoe ve r. The Re port is not a re commendation to buy /
sell or hold any securities of the Company. Analyst especially states that it has no financial liability, whatsoever, to the subscribers / users of this Re port. This document does not constitute an offe r or
solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. This document is provide d for assistance only and is not intende d to be and must not alone
be taken as the basis for an investment decision. The views expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information.
This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or publishe d, copie d, in whole or in part, for any purpose . This re port is not
directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state , country or othe r jurisdiction , where such distribution, publication,
availability or use would be contrary to law, regulation or which would subject Research An alyst to any registration or licensing re quirements within such jurisdiction. The distribution of this document in
ce rtain jurisdictions may be restricted by law, and persons in whose possession this document comes, should inform themselves about and observe , any such restrictions.
The information given in this document is as of the date as mentioned in the report and there can be no assurance that future results or e vents will be consistent with this information. This information is
subject to change without any prior notice. Analyst reserves the right to make modifications and alterations to this statement as may be re quired from time to time. Howe ve r, the Analyst is under no
obligation to update or keep the information current. Nevertheless, the Analyst is committed to providing independent and transparent recommendation to its client and would be happy to provide any
information in response to specific client queries. The Analyst shall not be liable for any damages whether direct, indirect, special or consequential including lost re venue or lost profits that may arise from
or in connection with the use of the information. Past performance is not necessarily a guide to future performance. The analyst for this re port ce rtifies that all of the vie ws expressed in this re port
accurately refle ct his or her personal views about the market, subject company or companies and its or their securities.
Copyright (c) 2011 Rajat Dhar


Page Industries Limited

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