Page Industries, the Indian licensee for global brands Jockey and Speedo, announced a notable increase in its first-quarter profit for the financial year 2024. The apparel maker, known for its prominent presence in the innerwear and athleisure markets, reported a rise in net profit and revenue, reflecting the growing consumer shift towards fitness-oriented lifestyles. Here’s a detailed look at the company’s financial performance and market dynamics.
Strong Profit Growth
Net Profit Rises Year-on-Year
On August 8, Page Industries reported a net profit of ₹165 crore for the quarter ending June 30, 2024. This marks a 4.4% increase from the ₹158 crore net profit reported during the same period last year. The rise in profit underscores the company’s successful navigation through the evolving market landscape and its strategic focus on key growth areas.
Revenue Boosted by Athleisure Demand
The company’s revenue from operations also saw a positive shift, increasing by 4% to ₹1,278 crore. This growth was primarily driven by robust demand for innerwear and athleisure products. The rise in revenue highlights the effective execution of Page Industries’ strategies, including the launch of new products and intensified marketing efforts.
Market Trends and Consumer Behavior
Surge in Demand for Athleisure
A significant contributor to Page Industries’ performance has been the growing consumer inclination towards fitness and athleisure. As Indian consumers increasingly prioritize health and fitness, spending on gym activities and athleisure products has surged. Analysts attribute this trend to a broader health-conscious lifestyle movement, which has been a key driver for Page Industries’ growth in this segment.
Projected Growth of Athleisure Market
According to sports apparel market researcher Maximize Market Research, India’s athleisure market is poised to become a nearly $2 billion industry by 2029. This projection indicates a burgeoning opportunity for companies like Page Industries to capitalize on the expanding consumer base and rising interest in fitness apparel.
Cost Dynamics and Margin Pressures
Input Costs and Overall Expenses
Despite the positive revenue and profit figures, Page Industries experienced a 10% reduction in input costs, which amounted to ₹260 crore for the quarter. However, this was offset by a 4% increase in total expenses. The rise in overall expenses reflects the company’s investment in growth initiatives, marketing, and operational costs.
Margin Contraction
The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) margin contracted slightly to 19% from 19.4% a year ago. The margin contraction highlights the pressures faced by the company amidst rising costs and competitive market conditions. Despite this, Page Industries has managed to maintain a strong profit trajectory.
Market Reaction and Future Outlook
Stock Performance and Investor Sentiment
Following the release of the quarterly results, Page Industries’ shares experienced a 1% decline, trimming their year-to-date gains to 5%. The dip in stock price reflects investor concerns over the margin contraction and subdued consumption growth during the quarter. Nonetheless, the company’s long-term prospects remain positive given the strong demand for athleisure and ongoing market opportunities.
Signs of Recovery
Page Industries has acknowledged that while consumption growth was subdued during the quarter, there are early signs of recovery. The company remains optimistic about future performance, driven by continued investment in product innovation and marketing, as well as the favorable market trends in the athleisure segment.
Page Industries’ first-quarter results for 2024 reveal a company in a state of positive transformation, bolstered by strong demand for athleisure products and strategic market positioning. While facing challenges such as margin contraction and increased expenses, the company’s performance reflects its resilience and adaptability in a competitive landscape. As the athleisure market in India continues to grow, Page Industries is well-positioned to leverage emerging opportunities and sustain its growth trajectory in the coming quarters.
