Sid's Blog
Stocks #1: Raymond & Page Industries

Stocks #1: Raymond & Page Industries

In this episode, we covered two textile stocks - Raymond & Page Industries.


#1 Raymond

Raymond is a name that needs no introduction in India.

Incorporated in 1925, Raymond started as a woolen mill & today it’s a diversified group with its feet dipped into Textiles & Apparels, FMCG, Realty, Engineering & Prophylactics.

Growth Drivers

One of the biggest growth drivers for Raymond has been the brand positioning & the way it is perceived by it’s customers. It has witnessed growth in both international & domestic markets.

Another factor working for Raymond is India’s rising per capita income & the average age of the population being around 26-28 years - which would increase the demand for premium suiting & apparels.

Raymond boasts brands like Park Avenue, ColorPlus, Parx - catering to various segments of the apparel market.

Potential Threats?

Threat #1: Remote Working

The biggest threat for Raymond & premium fashion brands - is the uptick in remote working due to the pandemic.

Remote working is here to stay even after the pandemic is over & this will reduce demand for premium apparels. Why would you buy a branded suit if you’re going to be working from home?

Threat #2: The Singhania Family Feud

Another red flag is the family feud in the Singhania family - which does not cast a good shadow over the company.

Vijaypath Singhania, the man who helped Raymond achieve remarkable success over the years - had gifted control of Raymond Limited in 2015 to his son - Gautam Singhania.

However, things took a drastic turn when Vijaypath was unceremoniously ousted from the company - which started a father-son tussle that would continue for years.

Will this feud have any adverse impact on the company in the future? We don’t know - but it’s something that investors should keep in mind before getting into the company.

Financials & Stock Performance

COVID-19 has not been kind to the textiles industry & Raymond was no exception.

Revenue dropped by [almost] 50% in FY21. Net margins were low & the company incurred a net loss in FY21.

The stock performance over the past 5 years has not been that great either. The stock hit a high of 1100 in April 2018 & is trading around 417 as of today.

Can Raymond bounce back from here? The next few quarters might give us a good hint.


#2 Page Industries

Page Industries, is a company which has disrupted & transformed the innerwear market in India.

Incorporated in 1994 by Sunder Genomal, it is the exclusive licensee of the Jockey brand in India. [Yes, Page Industries doesn’t own the brand]

Growth Drivers

The business of Page is often overlooked due to it’s skyrocketing share price over the years but it’s worth noting that it has been the fastest growing apparel company in India with Jockey being the largest selling apparel brand in India.

Jockey is available in 66,000 outlets in India & captures 9% of the Indian innerwear market - which still leaves a lot of room for growth.

One other positive is that overtime, Page Industries has pivoted Jockey from being only an innerwear brand to a well rounded apparel brand with diverse product offerings.

Potential Threats

Threat #1: Competition

Growing competition in the innerwear market is one of the biggest threats for the company.

You’ve got existing players like Rupa, Dollar, Dixcy and new entrants like Van Heusen, U.S. Polo, Tommy Hilfiger - companies which have a lot of brand equity to leverage.

To put things into context, Tommy Hilfiger reached revenues of INR 200 Cr in just two years of operations - while it took Page Industries 14 years to hit that target.

As competition heats up, pricing power would reduce & Page Industries would have to constantly innovate to increase/sustain it’s market share.

Threat #2 : Revenue Concentration

Another threat is the concentration of revenue from the brand ‘Jockey’. Although Page Industries has also licensed the UK swimwear brand ‘Speedo’ - majority of it’s revenues are derived from ‘Jockey’.

Let’s say if Jockey goes through a period of bad PR OR the exclusivity of the license is removed and other competitors are given rights to sell under the brand ‘Jockey’ [although the possibility of that happening is quite remote] - Page Industries would be significantly impacted.

Financials & Stock Performance

Unlike Raymond Limited, Page Industries’ revenues were flat for FY21. Net margins were moderate & at a P/E of 96 times - it’s definitely a very expensive stock to own.

A couple of positives - the company is debt free & has a RoCE of 48%, indicating that the management have been judicious allocators of capital.

The stock performance over the past 5 years hasn’t been very impressive. However - if you track the performance from 2007 - when the company listed on the stock exchanges, it has registered an absolute gain of approx. 9000% - cementing Page Industries as one of the darlings of Dalal Street.

Such, is the power of long term investing.

Can it replicate such success in the future? The road ahead doesn’t look very smooth - but that hasn’t stopped Sunder Genomal before.

Which stock would you like us to cover next? Let us know in the comments section!

Sid's Blog
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