Dear All,
Forwarding you the Result Flash on Page Industries for 4QFY2011 with an Accumulate recommendation and a Target Price of `1898 (12 months).
Page Industries – 4QFY2011 and FY2011 financial result highlights
· For 4QFY2011, net sales increased by 34.7% yoy and declined by 16.9% qoq to `111cr and was inline with our estimates.
· The company ended FY2011 with a 44.8% yoy increase in net sales to `492cr vs. our expectation of `493cr.
· EBITDA increased by 14.0% yoy in 4QFY2011 to `17.1cr but witnessed a decline of 38.3% qoq on the back of lower revenue generated on a qoq basis. The margin took a hit of 280bp yoy and 532bp qoq to 15.4% because of increased other expenses and staff cost.
· For FY2011, EBITDA increased by 45.6% yoy to `401cr but margin dipped by 42bp at 18.5%.
· 4QFY2011 witnessed a 17.6% yoy decrease in PAT to `12.9cr on the back of margin compression during the quarter. However, PAT margin only declined by 10bp yoy to 11.6% due to lower tax provisions during the quarter, which stood at 17.5% of PBT.
· FY2011 witnessed a strong increase in PAT by 47.8% yoy to `59cr on the back of higher revenue. Though OPM contracted during the year, PAT margin increased by 24bp to 11.9% due to higher other income, which increased by 89% to `12cr.
· Outlook and valuation: Considering the immense potential of India’s consumption story, the company’s predominant presence in a fast-growing market, strong brand recall and consistent financial performance, we remain positive on the stock and. We continue to maintain our Accumulate rating on the stock with a target price of `1,898, valuing it at 24x FY2013 earnings. We may revise our numbers post interaction with the management.
4Q And FY2011 Performance Highlights
| Y/E March (Rs cr) | 4QFY11 | 3QFY11 | % chg (qoq) | 4QFY10 | % chg (yoy) | FY2011 | FY2010 | % chg |
| Net Sales | 111.4 | 134.1 | (16.9) | 82.7 | 34.7 | 491.6 | 339.4 | 44.8 |
| Consumption of RM | 51.6 | 64.7 | (20.3) | 38.9 | 32.7 | 240.9 | 163.4 | 47.5 |
| (% of Sales) | 46.3 | 48.3 | (196.3)bp | 47.0 | (70.5) bp | 49.0 | 48.1 | 86.7 bp |
| Staff Costs | 23.9 | 23.8 | 0.5 | 16.5 | 44.4 | 89.7 | 58.1 | 54.3 |
| (% of Sales) | 21.4 | 17.7 | 370.8 bp | 20.0 | 144.2 bp | 18.2 | 17.1 | 112.3 bp |
| Other Expenses | 18.8 | 17.8 | 5.4 | 12.2 | 53.5 | 70.3 | 53.8 | 30.5 |
| (% of Sales) | 16.8 | 13.3 | 357.2 bp | 14.8 | 205.9 bp | 14.3 | 15.9 | (156.9) bp |
| Total Expenditure | 94.2 | 106.3 | (11.3) | 67.6 | 39.3 | 400.8 | 275.3 | 45.6 |
| Operating Profit | 17.1 | 27.8 | (38.3) | 15.0 | 14.0 |
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