Page Industries Faces Uphill Battle as Volume Growth Hits Multi-Quarter Low
Page Industries Ltd, the manufacturer and distributor of popular apparel brands like Jockey and Speedo, is grappling with a significant challenge: achieving sustained volume growth recovery. The company's December quarter (Q3FY26) results revealed a volume growth of just 1.4%, marking a multi-quarter low. Units sold during this period reached 58.6 million, reflecting the ongoing struggle in a highly competitive market.
Festive Shift and Competitive Pressures
Management attributed part of the weak performance to an early Diwali, which shifted festive-led demand to the previous quarter (Q2). However, they noted that demand has improved sequentially in Q3 and is expected to maintain momentum into Q4. Despite this, the company's aspiration to return to double-digit growth—driven by marketing initiatives, distribution expansion, and new product launches—faces headwinds.
Analysts at ICICI Securities have raised concerns, suggesting that Page's narrative of premiumization-led growth is hitting a demand ceiling. This is evidenced by persistent deceleration in volume growth, which has remained in the low single digits in recent quarters. The competitive landscape has intensified, particularly in menswear and womenswear segments.
Two-Pronged Competitive Assault
The ICICI report, dated 6 February, highlights a "two-pronged competitive assault" exacerbating Page's challenges:
- Aggressive Trade Promotions: Legacy peers are engaging in heavy discounting and promotions.
- Rise of D2C Brands: Direct-to-consumer brands with niche aesthetics and superior digital engagement are successfully attracting Gen Z and millennial consumers.
Additionally, a behavioral shift among consumers, transitioning from offline to online channels, poses a negative impact given Page's high reliance on offline sales, as noted by Centrum Broking. Weak entry-level demand further complicates near-term prospects.
Channel Performance and Revenue Insights
Among sales channels, e-commerce continues to lead growth, while physical channels—such as exclusive brand outlets and multi-brand outlets—are experiencing muted like-for-like trends. The Centrum report emphasizes that sentiment pick-up at the lower end of the pyramid remains a key monitorable, especially as the company intensifies below-the-line (BTL) efforts. BTL strategies involve highly targeted, direct, and personalized promotions aimed at specific consumer groups.
In Q3FY26, revenue growth was modest at 5.6% year-on-year, supported by better realizations and an increase in average selling price (ASP). The ASP uptick was driven by a favorable channel and product mix, including high-priced athleisure and winter products.
Financial Outlook and Strategic Initiatives
Despite challenges, Page maintains its double-digit revenue growth guidance for the medium term. Gross margin improved by approximately 160 basis points (bps) year-on-year to 57.9%, benefiting from stable raw material prices and a higher premium product mix. The company did not implement any price hikes last quarter but is closely monitoring potential input cost inflation, particularly amid volatility in textile exports. Price hikes may be considered only if costs rise steeply.
Page reported an EBITDA margin of around 23% in Q3 but maintains its FY27 operating margin guidance of 19-21%, anticipating increases in marketing and technology costs. On the product front, the JKY Groove line saw its second phase launch in Q3FY26 with the winter 2025 collection, receiving a positive response. The next phase, the Summer '26 collection, is scheduled for launch in April.
Investor Sentiment and Market Reaction
However, management's ambitious growth targets have failed to excite investors. The stock declined by approximately 2.5% on Friday and has corrected by 20% over the past year. Some brokerages have trimmed earnings estimates for FY27/FY28 due to expensive valuations. According to Bloomberg data, the stock trades at a multiple of 45 times the estimated price-to-earnings for FY27, highlighting valuation concerns amid ongoing growth struggles.
