Page Industries : Transcript of Analysts/Institutional Investor Meet/Con. Call

November 16, 2022
The Secretary	The Secretary
Corporate Relationship Dept.	National Stock Exchange of India
The Bombay Stock Exchange	Limited
1st Floor, New Trading Ring	Exchange Plaza
Rotunda Building	Bandra Kurla Complex
Phiroze Jeejeebhoy Towers	Mumbai - 400 051
Dalal Street, Mumbai - 400 001

Dear Sir,

Sub: Audio Recording and Transcript of Investor call

We herewith enclosed the transcript of investors call for the financial results for the Quarter ending 30 September 2022.

Audio recording of the investor call is available in the following link: https://youtu.be/OEaLtDIZ8_4

This is for your information and records.

Thanking you,

Yours truly,

For Page Industries Limited

Digitally signed by

Murugesh Murugesh

Date: 2022.11.16 13:26:25 +05'30'

Murugesh C

Company Secretary

"Page Industries Limited

Q2 FY2023 Earnings Conference Call"

November 10, 2022

MANAGEMENT: MR. V.S GANESH - MANAGING DIRECTOR- PAGE

INDUSTRIES LIMITED

MR. K. CHANDRASEKAR - CHIEF FINANCIAL OFFICER -

PAGE INDUSTRIES LIMITED

MR. GAGAN SEHGAL - CHIEF OPERATING OFFICER-

PAGE INDUSTRIES LIMITED

MR. RAHUL SHUKLA - PRESIDENT AND CHIEF RETAIL

OFFICER - PAGE INDUSTRIES LIMITED

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Page Industries Limited

November 10, 2022

Moderator:Ladies and gentlemen, good day and welcome to the Q2 FY2023 Earnings Conference Call of Page Industries Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal the operator by pressing "*" then "0" on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. V.S Ganesh, Managing Director of Page Industries Limited. Thank you and over to you Sir!

V.S Ganesh:Thank you so much and good evening everyone. It is a pleasure to talk to you and thank you all for joining for this call today.

An exciting time for us to be in the industry such as ours with an increasing urban population, rapid urbanization, growing aspiration for global brands, shift in organized retail and an increasing awareness for branded innerwear to name a few. It gives branded players like us a huge market to explore and to grow. I am delighted to inform you that we have registered a robust revenue growth, record margins and earnings per share performance added by good growth across all our product categories. We actually have recorded the second-best quarter in our history just behind the Q1 record which we had.

With the demand environment being lukewarm with inflationary pressures abating a recovery in consumption, we are happy to announce that we actually recorded a 7% volume growth if we look at the growth without mask. Overall, the reported growth is 1% but if we look at our core category, our volume has grown 7% and in our core category, the revenue has grown 20% but if we include mask and if we compare then it is a 16% growth.

We continue to intensify our focus on distribution, modern trade, and e-com to drive product strength, increase consume engagement while making substantial progress in the digital led marketplace. Looking ahead despite the volatile macroeconomic environment, we remain very confident in our ability to further build on to the progress made so far and continue drive strong top and bottomline growth. This is made by possible by our incredible team who came together to connect closer to the consumer than any time before.

Let me share quick highlights before CFO details a financial performance for the quarter and for the half year. Our Q2 revenue has grown by 16% year-on-year but shown a degrowth by 6% quarter-on-quarter if you look at the strong Q2 of last year base whereas volumes have grown 1% year-on-year if we look at actually the core category, we have actually grown 7%. On a like-to-like if you compare it has shown a degrowth of 10% quarter-on-quarter.

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Page Industries Limited

November 10, 2022

Coming back to the volumes as I told you without mask it is a 7% growth. As of September-end, we are present in 118,000 MBOs, 1191 EBOs and 2741 LFS. Our channel expansion continues to be line with our growth plans. I am very pleased to share that we have opened our first flagship store in Connaught Place, New Delhi and few days back we opened our 10th EBO in Dubai. We are also now present in Qatar and Maldives.

Delving into the macro environment and its effect, I am pleased to report that the supply chain is back on track despite witnessing major demand shifts. We have invested heavily on mobilizing inventory both to manage the input cost volatility and bring our stock levels to where it should be.

During the quarter, we faced very high inflationary trends which impacted nearly all costs including cotton which is now softening, packaging, fuel, logistics; however, we managed it and we were able to partially reverse the strength and hold onto our margin strength with the calibrated pricing actions, strong budgets and export control measures and optimum use of inventory. Our expansion plans are in line with accelerated sales growth strength and that we have been in the market place and this is supplemented by strengthening our relationship with our supply chain partners.

We will continue to have disproportionate attention on our growing categories namely Athleisure, the women's range and juniors. Our retail expansion has equal focus for tier 3 and 4 towns as we have for metros and tier 1 and 2.

I am delighted to inform you that our Speedo business is back on track and the revenue numbers are very encouraging and it is line with our budgets.

I would like to take this opportunity to thank on your behalf the 28,000 plus associates for the great work they have put in and for showing a very robust performance during the quarter.

I have today Mr. Gagan Sehgal along with me our COO, and Mr. Rahul Shukla - President and Chief Retail Officer, who will be more than happy to answer any questions that you may have in this domain as regards to sales and modern trade. As usual I am joined by Mr. K. Chandrasekar, our CFO who will now give you further insights on our Q2 financial performance.

Let me thank you once again for joining the call today and I pass on to Mr. Chandrasekar. KC!

KC Chandrasekar: Thank you, Mr. Ganesh. Welcome everyone to the call and thanks for being here and your support to Page.

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Page Industries Limited

November 10, 2022

Jumping into the financial performance for the quarter, we had revenues of 12,550 million and that, as Mr. Ganesh explained is the best Q2 in history on the back of the best quarter ever which was previous Q1. The last year Q2 was Rs.10,840 so there is a growth of 16% in value and a degrowth of 6% quarter-on-quarter. The EBITDA is Rs.2379 million and this is a growth of 2% over the last year, Q2 and there is a degrowth of about 20% quarter-on- quarter. EBITDA margins are coming in slightly lower at 19% which compares with 21% year-on-year and 22.2% quarter-on-quarter.

We have not pulled back any of our opex which are contributing to the growth of Jockey brand. We have spent more on opex mainly on advertisement, in building warehousing, capacity, we have spent on digital media advertising and e-com growth has been good so therefore there are attendant commissions so the opex has been more. The gross margins remain to be around 39% so the opex in Q2 has taken the EBITDA to about 19%.

The Q2 PAT is Rs.1621 million which is a growth of 1% year-on-year and a degrowth of about 22%. The PAT margins are 12.9% and it compares with 14.8% year-on-year and the quarter-on-quarter is 15.4%. As I already said the gross margins have been 39% which is generally at par so the pricing decision which we have taken have been vindicated.

As far as the H1 is concerned, these numbers obviously because of weak pandemic Q1 last year, clearly are looking extremely good. H1 revenues are the best again in history Rs.25,963 million which compares to only Rs.15,855 million last year H1, which is a growth of about 64%. Similarly, the EBITDA for H1 is Rs.5357 million compared to Rs.2676 million, a growth of 100%. EBITDA margins are 20.6% for H1 this year as a whole and last year was only 60.9% because of Q1 under absorption. The H1 PAT is Rs.3692 million and it compares with Rs.1714 million only last year H1. This is again a growth of 115.4%.

With respect to cash and cash equivalents, we have come down to about Rs.833 million and this compares with Rs.3144 million as of June 2022. This is because we have continued to invest in inventory and we have gone a little ahead of the curve as far as the inventory is concerned, which should rationalize a bit going forward but we have a healthy inventory and that should support further growth in Q3 and Q4. The inventory actually stood at Rs.13,592 million as against about Rs.11,200 million in June.

Networking capital has not gone up because a lot of it is the build of inventory has come from the cash reserves as well as the payable is more so networking capital was Rs.7880 million which compares with about Rs.7300 million at June.

With that I request that we move to the Q&A session.

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