Stock Price Movement and Market Context
On the day the new low was recorded, Page Industries Ltd’s share price fell by 1.15%, aligning with the sector’s overall performance. The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating sustained downward momentum. This contrasts with the broader market, where the Sensex opened 183.12 points lower and closed down by 295.23 points at 84,482.79, a decline of 0.56%. Despite this, the Sensex remains just 1.98% shy of its 52-week high of 86,159.02, with its 50-day moving average still positioned above the 200-day moving average, signalling a mixed market environment.
Performance Over the Past Year
Page Industries Ltd has underperformed significantly over the last twelve months, with a negative return of 26.77%, compared to the Sensex’s positive 8.10% gain. The stock’s 52-week high was Rs.50,470.60, highlighting the extent of the recent decline. This underperformance is also evident over longer periods, as the company has lagged behind the BSE500 index over the past three years, one year, and three months.
Financial Metrics and Valuation
The company’s recent quarterly earnings per share (EPS) stood at Rs.17.52, marking the lowest level in recent quarters. Despite this, Page Industries maintains a robust return on equity (ROE) of 54.2%, reflecting strong profitability relative to shareholder equity. However, the stock’s valuation remains elevated, with a price-to-book (P/B) ratio of 28, which is considered very expensive when compared to peers and historical averages. The price-to-earnings-to-growth (PEG) ratio is 2.2, indicating that the stock’s price growth expectations are high relative to its earnings growth.
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Growth and Profitability Trends
Despite the recent price decline, Page Industries has demonstrated healthy long-term growth fundamentals. Operating profit has expanded at an annualised rate of 30.74%, underscoring the company’s ability to increase earnings over time. The average return on equity over the long term stands at a strong 45.83%, reflecting consistent profitability. Additionally, the company maintains a very low average debt-to-equity ratio of 0.02 times, indicating minimal leverage and a conservative capital structure.
Sector Position and Market Capitalisation
Page Industries Ltd holds a commanding position within the Garments & Apparels sector, with a market capitalisation of approximately Rs.39,485 crores. This makes it the largest company in the sector, accounting for 25.02% of the entire segment’s market value. Its annual sales of Rs.5,018.54 crores represent 12.11% of the industry’s total revenue, highlighting its significant market share and influence.
Institutional Holdings and Market Sentiment
The stock has a high level of institutional ownership, with 52.45% of shares held by institutional investors. This suggests that entities with substantial analytical resources and market expertise maintain significant stakes in the company, reflecting confidence in its underlying fundamentals despite recent price pressures.
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Summary of Key Concerns
The stock’s recent decline to Rs.34,968 reflects a combination of factors including a flat quarterly earnings performance, the lowest EPS recorded in recent quarters, and a valuation that remains high relative to earnings and book value. The underperformance relative to the Sensex and BSE500 indices over multiple time frames further highlights challenges in maintaining investor confidence. Trading below all major moving averages also signals continued downward pressure in the near term.
Broader Market and Sectoral Influences
The Garments & Apparels sector has experienced mixed performance, with Page Industries Ltd’s price movement mirroring sector trends on the day of the new low. The broader market’s modest decline, as reflected in the Sensex’s fall, adds to the cautious environment. However, the Sensex’s proximity to its 52-week high and the positioning of its moving averages suggest that the overall market remains resilient despite intermittent setbacks.
Valuation and Profitability in Context
While the company’s profitability metrics such as ROE and operating profit growth remain strong, the premium valuation multiples indicate that the market has priced in expectations of continued growth. The current share price decline may be a reflection of recalibration in market expectations, especially given the flat earnings and recent price weakness.
Conclusion
Page Industries Ltd’s stock reaching a 52-week low of Rs.34,968 marks a notable point in its recent trading history. The decline is underpinned by a combination of subdued earnings performance, high valuation multiples, and broader market pressures. Despite these challenges, the company’s strong long-term fundamentals and sector leadership remain evident in its financial metrics and market position.
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