Tuesday, July 3, 2012

Note From Page Industries Annual Report 2011-12

Current Year Financial Performance
- Sale increased from Rs. 4,915.62 million to Rs. 6,834.09 million registering a growth of 39 %
profit before tax increased from Rs. 877.61 million to Rs.1,340.95 millionincrease of 53%
- Tax increased from 292.12 million to 441.08, increase of 51%
The net profit stood at Rs.899.85 million as against Rs. 585.49 million, growth of 54%.
- EPS moved from 52 to 81, growth of 55%
- Dividend , Rs. 37/- for the year.
- 4% growth in inventories.
- Trade receivable grew by 69%
- Long term loans grew by 30% to 265 million
Cash Flow
- Net cash generated from Operating activities is 1225.8 million. ----- (1)
- Free cash = (1) - Purchase of fixed assets + (sale of fixed assets)
- Free cash  = 1225.8 - 271.4 + 6.8 =  961.2 million i.e., slightly higher than the reported PAT.
Market Price
- Market price moved between 1600 to 2700 in the FY 11-12 between a PE of 30 to 52 based on FY11-11 EPS.
- currently the market price of roughly 2900 is 35 times of FY 11-12.

- New Territory: company has appointed a UAE Distributor for Jockey and has made the first shipment to UAE during the year under review. Trying to portray a high brand image as was done in India.
- Opened 11 Jockey exclusive Brand outlets. Total now at 71, well spread out in all major cities. (My take: That's very less for India , isn't it ?, still lot of scope to grow)
In the year under review, your company commissioned ‘Nielsen’ research agency to conduct an independent ‘brand health’ study for the Jockey brand in India. The research involved fourteen cities in all four zones across the nation. Your Directors are happy to inform you that the results of the study were very heartening and showed that Jockey scored a Brand Equity Index of 4.6 on a scale of ten in the Men’s Innerwear category and 2.9 in the Women’s innerwear category. To put things in perspective, worldwide only 23% of brands across all product categories score a Brand Equity Index 3.0 or over on a scale of ten and only 8% of brands score 5.0 and above. Jockey India Brand Equity Index scores were way above all
other brands in both the Men’s and Women’s Innerwear categories. The research agency has rated the Jockey brand health in India among the most powerful brands in their research experience across all categories
With the backing of Jockey International, USA, and access to ideas, trends and innovations from forty other Jockey international licensees throughout the world, your company’s long term commitment to newness & innovation will never waver be it product, back end processes or marketing.
AGREEMENT WITH SPEEDO INTERNATIONAL LIMITED:We have on 1st July 2012 entered into a License and Distribution agreement with M/S. Speedo International Limited, London, UK for the
exclusive right to manufacture and distribute Speedo products in India consisting of swimwear, apparel, water shorts, equipments and footwear. We launched Speedo brand of products in January of 2012 and have achieved Sales of Rs. 27.75 million during the current financial year.
One of India’s leading sectors, the textile industry contributes 4% to the country GDP, provides direct
employment to 35 Million people, accounts for 14% of the industrial production, 12 % of the total exports
and 17% of exports earnings.
The Indian domestic apparel sector is expected to grow from INR 1,850 billion in 2010 to INR 5,300 billion by 2020, representing CAGR of 11 %. Of this , the innerwear market currently valued at INR 143 Billion (in 2011) is expected to grow to INR 437 Billion by 2020 growing at CAGR of 13.2%, outpacing the growth of the overall apparel market.
The innerwear market in India is underpenetrated with per capita spend - 90% below Thailand and China.
The market has been growing faster than the overall clothing market, driven by premiumisation. With discretionary consumer spend in India continuing to grow, these trends should persist, aided by rising
urbanization and growth in consumer.
- Stabilized the implementation of SAP and BO.

Opportunities: The premium innerwear industry is expected to grow at high rate due to the following
a) Increased urbanization b) Higher Disposable Income c) Change in Consumer behavior particularly in
our target 15-34 age group d) Larger marketing spend by Companies creating general awareness for the category e) Increased brand awareness by consumers f) Shift from unorganized to organized sector
g) Rapid expansion of modern retail format

All the major international innerwear Brands have commenced operations in India realizing that Indian Market is likely to emerge as one of the largest market in the World in the next few decades.

In anticipation of growing demand, the Company has substantially expanded its installed production capacity. And with the ongoing addition of new buildings, infrastructure and facilities, the installed capacity is scalable and can be ramped up with incremental machinery to meet the expected healthy growth in demand.

Risk and Concern:
The areas of risk and concern are:
1. Increase in labour costs
2. Increase in input cost.
However we are confident that increase in input cost can be passed on to consumers. We are also
taking steps to monitor and improve labour productivity which will mitigate the impact of increase in labour cost to some extent. Moreover there has been softening trend in the price of input material especially cotton.

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