Page Industries Ltd
NSE:PAGEIND
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
33 233.85
47 741.2
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Page Industries Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day and welcome to the Q1 FY '22 Earnings Conference Call of Page Industries Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. V. S. Ganesh, CEO of Page Industries Limited. Thank you and over to you, sir.
Thank you. Thank you so much and good evening, everyone. It's a pleasure to interact with all of you today, and I do look forward to the session. Today, I'm joined by our CFO, Mr. K. Chandrasekar. I'm also joined by Mr. Gagan Sehgal, our President, Channel Sales and Distribution; and by Mr. Rahul Shukla, our Senior Vice President for EBO and LFS. Before I start highlighting the performance for the quarter, I would like to thank once again to -- all those thousands of women and men in our operating facilities and various markets and stores who have worked very diligently, with utmost care by taking all precautions to resist the pandemic, and for creating a very safe work environment to all associates in the factories and to our customers. I would also like to thank all the franchisees, the distributors, the warehouse partners and all our supply partners in the back end who helped us to cope with the financing situation. And of course, our thanks also due to our delivery employees who did a stellar job during the last quarter. I would also like to thank all of you, the analysts and the investors. You have been our well-wishers and the ones who keep challenging us on the most important things that we should continue to deliver and focus. The quarter itself was a fantastic quarter for us in terms of sales growth. Given the disruption created by the pandemic, we are proud that we outdid our own plans and expectations. Revenue for Q1 grew by 76%. And by volume, it grew by 70% year-on-year, aided by gradual lifting of the lockdown post the second wave, which helped increase footfall in the stores. I'm sure you all know we can't compare these numbers with our last quarter as it would not be like-for-like. However, for the sake of record, I would like to tell you that the revenue is 43% lower and volume by 45% quarter-on-quarter. Of course, as you know, this was mainly because of the fact that we lost almost half of Q1 because of the lockdown. More than 61% of MB outlets were active at June end. And by the end of June, all our EBOs and LFS were open. Our manufacturing and warehousing facilities have now returned to normalcy, and we are taking all necessary precautions to ensure the safety of all our associates. As regards to market, the sales trend, which has been on an increasing trend since the last year, continues to show the robustness and is looking very bullish, barring the lockdown period. Our branding efforts continued through multiple channels, including online, media and point of sale. E-commerce continues to be robust. Our kidswear business continues to be a special focus area with very encouraging customer acceptance and feedback. We now have 39 EBOs that are exclusive for Jockey Junior. We have been able to build a separate channel with nearly 200-strong sales force for the juniors business. We have also appointed Jockey Junior-specific channel partners across 50 cities and [ towns ] . We continue to expand our depth within existing market geography as well as strengthen distribution in markets which are witnessing expansion of mature retail formats. Jockey is present throughout India in 2,895 cities and towns. We see great potential in the rural tier 3 and tier 4 cities, and we are strengthening our distribution network in a paced manner in these markets with opportunities. We will continue to give our best effort and focus on the core business verticals, that is the men's innerwear; women's innerwear; athleisure, both men's and women's; socks and towels. And we are very confident of maintaining growth going forward. We are delighted that our team was able to put together so many innovations in ensuring customer acquisition, in controlling costs, in managing cash and in bringing the best out of our associates and in reassuring all our stakeholders that all is getting done. I will now hand over to our CFO, Mr. Chandrasekar, to give us the Q1 financial results and review. Thank you, and over to you, KC.
Thank you, Ganesh. Welcome once again to the call. I hope I'm audible and clear. The Q1 FY '22 revenues, you would have seen reported at INR 5,015 million. This was 2,848 million last year. So of course, both quarters have been subject to the pandemic, so this is not our best performance. But still, there is a growth of 76%. So last year, even though half the quarter was affected and similarly this year also, but we have done well because we have learned and we have been able to mobilize better in this year than in the last year when pandemic was a surprise to all businesses. And of course, the best performance as far as the quarter is concerned is about INR 8,000 million, as you know, for Page. And the volume was 22.28 million this quarter, which is again a 70% growth. The EBITDA margins are largely affected by the lower revenues at 6.8%, again compares with minus 12.2% of Q1 FY '21. And then -- but then we delivered 19.3% in the preceding quarter, Q4 FY '21. So the EBITDA margins are lower mainly on account of wages, selling overhead and corporate overheads underabsorption, about 6% from wages and selling overheads by about 2% and the corporate overheads by 4%. So that explains the EBITDA margins being lower. We typically report and compare the gross margins. And the gross margins for the quarter, Q1 FY '22, is 33.2%, which compares with about 39.3% of last year, which is FY '21, again, as I said, due to the lower absorption of wages by about 6%. You would be asking about the raw material prices for sure. The raw material prices are holding around 44% to 46% of revenue. This has been more or less in line with the past quarters because, as you know, with the increase in raw material costs, we also increased the selling price year-on-year. So it remains around similar percentage of revenue. We did, however, see about a 2.8% increase in the RM cost impact in Q1. And the forecast forward is about 5% to 7%. But what I hear is the prices are now -- are weakening now, and we have to wait and watch in the rest of the year. The Q1 FY '22 profit after tax is down by about 91% quarter-on-quarter but then up by 128% compared with FY '21 Q1. It's about INR 109 million. And the margin is at 2.2%. The cash equivalent compared with the INR 4,347 million of March '21 is down to about INR 3,271 million, mainly on account of lower sales and collections. But we are maintaining a close watch and keeping all the OpEx under control in Q1. Business is receiving to normalcy. April, we did like 19% EBITDA and -- but then May and June wasn't that good. July is somewhat similar to April. So we are back on track. The net working capital is about 5,100 million, which is the same as March. The only thing is the cash is now replaced with inventory where there is a strategic buildup of inventory. So that is as far as the financial update is concerned. Can we now open the floor for Q&A?
[Operator Instructions] The first question is from the line of Aditya Gupta from Goldman Sachs.
A couple of questions. First, on the volume growth of 70%. There's too many moving parts in the quarter. So if you could just help us understand at least which segments grew more than 72% and which ones grew less than 72%, that will be very helpful.
Yes, Aditya, if you are looking at volume growth, against last Q1, this Q1, every segment had a tremendous growth in volume, and we are continuing to see similar growth. All categories are growing. However, the bias is more towards athleisure, obviously, with work from home. So I don't -- so the accelerated growth is happening on that side of the business. And we are also seeing very good traction on the women's innerwear and the leisure side of business as well.
Maybe a follow-up on this. Now with, let's say, vaccination picking up, hopefully people getting back to offices sometime this year. And with malls and other department stores also opening up, hopefully, by the end of the year, how do you -- I mean, from a competitive scenario, how has the competitive positioning improved for the brand over the last 12 to 18 months? And how do you think competitive activity is going to be when everything opens up and people also start buying or start going back to offices?
Aditya, how I look at it, I think we managed to have quite a lot of customer acquisition during this time because these are times when our customers will always prefer trusted brands with good value-for-money proposition. And quite a lot also depends on how robust your supply chain is. And last [indiscernible] products in the marketplace. So in that sense, we were able to gain a lot of ground. And this will come -- help us in the long run. We are also very well geared up for e-commerce. It grew tremendously. And from the warehouse, IT, logistics point of view, we were able to augment our resources and became capable. So that also helps us quite a lot. And we have taken a lot of initiatives to ensure growth. So last year, you see, despite the pandemic, we were able to open more stores, and we opened 14,000 MBOs and 200 EBOs. And that was a tremendous job which we did. And more than 50% of this growth came from Tier 3, 4 cities. So while we are looking at the productivity improvement in our current stores, we have also been expanding our footprint, and a bias towards more rural market with a lot of dedicated leadership and resources being put towards it is helping us quite a lot. And this momentum and thrust will continue.
Got it, very helpful.
Yes. Yes, Aditya.
And just one last question from me. On the gross margins which is reported in the P&L, right, so last quarter for -- last year first quarter, there was a significant dip from 59% in March or fourth quarter '20 to a 48% in first quarter of '21. And a lot of this was attributed to obviously underabsorption of overheads -- manufacturing overheads rather due to the impact of the lockdown. Now -- but this time around, the gross margins as reported in the P&L have actually held up pretty flat quarter-on-quarter. Now I would have assumed that a similar kind of an underabsorption of overheads would have happened this quarter also like last time around, right? It might -- the magnitude might not have been similar, but there should have been some quarter-on-quarter compression over here? Or is there something that I'm missing out here?
Yes, typically, Aditya -- good question again. I think I'd answer the questions for many people. The gross margin, maybe you're looking at what is published. If you had a chance to go through the earnings presentation, the gross margin I did mention in my first introduction is about 33.2% after the subcontract costs and the other manufacturing costs. So it is about 6% down from the typical historical gross margin about 39% to 40%. So it's about 6% down mainly due to the wages underabsorption. And -- I mean, that would -- again, when the volumes are back to normal, it should go back in the same range because we increased the selling price in proportion with any of the cost inputs, including raw material. So we may -- try to achieve around 20% to 21% EBITDA margin. So this should restore in -- even if you go back to FY '21, in all the months where there was no lockdown, we had exceeded an EBITDA margin of about 21% in all the months, excluding the lockdown period. So this is something which is sustained in terms of our approach to the business.
The next question is from the line of Avi Mehta from Macquarie.
Just -- I wanted to kind of understand the comment that you made in the start about July being back to April levels. Would you be able to give a sense versus pre COVID? How are we back to pre COVID? In a sense, if I were to take 2 years back sales number, we are back to that number now? Or are we seeing a growth from that number? Kind of give us some...
It's early to call because even July was disrupted in some manner. So I would really wait for Q2 to come out to be able to make a comment. Because even within Q1, it was up and down.
Okay. How was, sir, your June? Maybe if it is possible to give us a sense on with the lockdown still being there, how the impact was. Would we be able to get some sense on that, sir? Was it 60%, 70%, 80% of the normal? Or how would you -- not an exact number, but a [ lead ], sir.
Like the -- like in terms of volume, April was about 12 million, May was about 4 million and June was about 9 million. So that adds up. So June was like twice of May, but it's not close to anywhere being where it should be.
Okay. Okay. And this is -- there is no seasonality over here, right, because of the price increase, that April typically is higher? It was like that. It is just because...
No. I mean you know that the -- it's been a tough time. And also, April and May have been quite tough on everyone, yes, on the personnel front also. So there is no seasonality as such. But I think June was a bit of a recovery and July is better. But we really need to give it a little more time.
Okay, sir. And when you say, sir, still restrictions, is it a specific geography that you're -- kind of would like to call out which is where the pressure is there, sir, still? Or are we now completely out, sir, in terms of restrictions? Or still some parts are under -- I mean, Kerala is. But is that a large chunk for us? Is that you are kind of alluding to when you say things are not yet normal?
I think Gagan may give you a very good answer. So Gagan?
Yes. Mostly, things have opened up. Then yes, we say that the impact was [indiscernible] Kerala. And it is -- definitely, it contributes to our top line. So we still have to wait, I think. But overall, we are very positive. Things have opened up mostly all across, but -- except barring a couple of states. So that's why we are confident going forward.
Okay, sir. So -- and second, just on a conceptual basis, you highlighted that RM is back to 44% to 46% of sales because of the price increases that you have taken in June, right, sir? Is that correct, sir?
Yes, yes.
And hence, would it be fair to expect if then things normalize, we would move back to what we saw in the second quarter, third quarter of last year? Is that a fair way to look at margins?
Absolutely. That's...
Absolutely. Absolutely. In fact, I had mentioned to you that even in FY '21, we had delivered upwards of 21% EBITDA margins in all the months, which were considered normal. So that is how we always operate.
Next question is from the line of Nihal Jham from Edelweiss.
Sir, 2 questions from my side. You obviously mentioned in the last call that production was shut till 7th June and I think from April. So is it that there was actually an issue with the availability of product that impact us here? Then how is it going to be managed? Whether it has been via inventory or we did a ramp-up in production after June? If you could just give us a sense on that.
Yes. So Mr. Jham, what -- we've lost 48 days in manufacturing, that is true. But we have inventory. And you also know we also have a strong outsourcing. So we outsource close to 1/3 of our products. And we are always -- with risk mitigation, we always ensure these facilities are across India, not concentrated to one region. So that did help us to keep the supplies didn't create much disruption. We also had adequate raw material safety stock buildup. We even now are holding enough raw material stock so that we can quickly ramp up capacities when required. And these stocks were also used to support our outsource vendor partners. In in-house manufacturing, the moment we opened up, we were able to scale up capacity because we went into shift operations. So now all our associates are working in 2 shifts. Even though the government allows 100% of people can come and work, we are keeping less than that. We are keeping 50% to 55% people on a given point of time working in 2 shifts. So this has helped us in not only maintaining safety and social distancing and health and safety of our associates but also getting to normalcy as regards the capacities are concerned. We also worked hard on the outsourcing side and have increased outsourcing capacity by close to 50% from where we were 6 months back. So the supply chain is very poised to accelerate supplies and build inventories.
That's helpful, sir. The second question was, at the same time last year when COVID impacted, what we saw as a trend, and it was alluded also last year, was there was a sharp movement in demand, I think, especially from the athleisure side, where, despite losing out the first quarter, the strong demand momentum saw us making up the entire revenues in the rest of the year. I just wanted to get a sense, and I'm specifically speaking more from the athleisure side, that are we seeing that once things have normalized, that the pent-up demand or the ramp-up in the athleisure segment is as strong as last year?
Yes. I firmly believe it will continue to be robust because this is an opportunity where people discovered us and understood our product much better. It's value for money, quality, fit. And therefore, I can see much more loyalty and -- from our customers on the athleisure side. So in that sense, I think this was a good discovery for our consumers, and it was a great opportunity for us. And when I see the way the product is received in the market, we are going to be the leading and most trusted athleisure brand of India going forward if that is the way things are moving. So I do have a very bullish outlook as far as athleisure is concerned.
Before I sign off, could you give the average price hike that you have taken to cover the RM cost maybe versus last year and even on a Q-on-Q basis would definitely be a lot of help. and I'll be done.
Yes. Yes. So the RM price hike has been more or less similar to what we have done in the previous years. And we usually touch prices anywhere between 3.5% to 5%. It depends on the product. So overall, we have been in that range. And we always -- this year also, we'll be able to continue that because even though the raw material prices went up, we took a lot of cost control measures. As I told you in my beginning statement, we were virtually having a 0-based budget. We were concentrating on every spend and were able to cut costs even though we very, very careful on the people side. We maintained all our operators, all our associates, all our managers. Nobody -- there was no downsizing. We paid everybody in full. So we took the right measures. We were always looking at need to have expenditures with people. So the cost controls which finance brought in also helped us in a great extent to mitigate some of the impact of raw material price increase. So this helped us to keep the usual normal price increase despite the raw material rate and other pressure as far as prices are concerned.
The next question is from the line of Himanshu Nayyar from YES Securities..
Sir, firstly, on the distribution front, we've seen that we've had very aggressive addition to our MBO and EBO network. So just wanted to understand in terms of the universe. What do we feel is the effective universe of MBOs that we can target and obviously keep growing profitably? And what is the sort of EBO network that we are looking at? If you can give some numbers there.
Yes. So there is tremendous scope to improve and open a number of doors. So we are continuing -- as you rightly said, we are continuously, aggressively expanding that while also looking at productivity increase in our existing stores. And the thrust has been now equally biased more towards, say, 5, 3, core cities. We now are also working on the rural market with separate leadership. So you will see more doors opening because of that thrust which we are giving. And we are also looking at opportunities in tiers 1 and 2 cities. So it is more distributed in that sense. And there is -- we see tremendous scope for growth both organically and inorganically as far as that metric is concerned. And when it comes to EBO, we have been adding around 200 to 225, 250 stores year-on-year. And that will continue as we see it because almost all stores are profitable with our expanding product range and more customer acceptance. We need to do this. And therefore, we are continuing to have that growth going forward also. Gagan, do you want to add more value to this?
No. Absolutely right, as mentioned by CEO, we definitely see a lot of potential as we are expanding our footprint. And 50% of stores which were opened last year were also in the Tier 2, Tier 3 cities and rural. And when we look in the throughput of all the new outlets, it's very, very encouraging, which means the closer we are going to the customer, the retailers also are having a throughput which is making them sustain, and our distribution model is working as we are expanding more and more doors. And I see no reason why for the next couple of years we should not continue to add at this pace.
Okay. Understood, sir. That gives a lot of clarity.Second one was on the e-commerce bit. I mean given that in a lot of categories, I mean, including yours, we have seen that the e-com share is rising and you were also talking about more investments on that front, so I just wanted to know what's our current share of sales coming from that channel. And in terms of preparedness for the future, if you can just give us some more color on what all you are doing to further increase the share coming in from that side.
Right. So in FY '21, e-com was -- the contribution ratio was 7.4% of overall. So that has been a healthy growth for us. That's a growth of around 76%. But we should also keep in mind that this is also slightly skewed because the overall sales was not in line with previous year's. So as a percentage, this kind of split was exaggerated.However, even in Q1, the growth was 19%. The contribution was 19% actually. And therefore, the year-on-year growth of e-com is, I can say, 2.5x because the year was [ 2.55 ]. So e-com continues to be a fast-growing channel because of the pandemic. And I'm confident that e-com business would be further scaled up in the coming years. So I see the buying pattern of our consumers rising further, and habits would still be to buy from online. So we will continue to invest. Besides having our own e-com portal, we have also tied up with major online players like Amazon, Myntra, Zivame, Paytm, Flipkart. So this will definitely help us to accelerate growth in the coming years and impact in even the coming months.
Right. Sir just one follow-up. Does it impact our margins in any way? Are the margins different for this channel of sales? Or not really?
No, not really. So -- like through Jockey India platform, of course there's a marginal -- we'll have a marginal gain. But overall, if you look at it, there will not be any adverse impact onto the margin.
The next question is from the line of Aditya Soman from Golden Sachs.
Just one follow-up question. I think when you were talking about July earlier, you were talking about margins, right, and not top line, but margins being back to April levels. Did I get you right?
Actually, July, we -- what I said was July is also looking good. We didn't talk any specific numbers there, but we said that the demand and the appetite for our products continues to be -- and July has been a good month for us. We may not be able to talk about specific numbers there because, as Mr. Chandrasekar rightly said, we have to wait for the quarter to end to look at the numbers.
Correct. Correct. No, no, I can -- I was just picking on your comment you made earlier that July margin is similar to April at 19%. But that's okay. And secondly...
You're right, Aditya, in the sense that -- I mean, in terms of volume we have seen in July, so we think that it should be similar to April. But again, the full cost will get captured during the quarter. So we'll have to see.
Fair enough. Fair enough. No, I think that's very fair and clear. And my second, just a broader question just in terms of there -- of what's happening with men's innerwear because I think you again called out that, obviously, women's innerwear and actually -- actually, that was probably better than the segment average. Men's innerwear has been a bit sluggish now for -- if you were to compare it with sort of [indiscernible] forward level for some time. When do you expect a sort of growth in men's innerwear? Will that be from 2Q or 3Q? Or do you think 2Q and 3Q base is tough because we had a significant pent-up last year?
Well, men's innerwear actually has grown. There was no better growth as far as men's innerwear is concerned. The only thing is with the changing demand patterns, I can say the growth was more accelerated in the athleisure side of the business. But then we -- men's innerwear did grow, and it continues to grow. And we're also taking a lot of initiatives to penetrate more into the market. So as we discussed some point back that we opened more doors, especially in Tier 3 and 4, that should also help us quite a lot to push men's innerwear, and in the rural market also. Because those are markets where some of the economy brands have a good footprint. And we are not -- our presence can be better, if I can put it that way. So we are improving our presence there, and that will really help in our business as we move forward.
Mr. Soman, you have any more questions?
Yes. Sorry, I was on mute. Just in terms of -- last question from me. Just in terms of effective price increase, how much would that have been at a portfolio level in 1Q? And how much should we expect going forward?
K.C. can you share the exact percentage of price increase?
Yes. We did about -- around 4%. And going forward, if you're asking about going forward, then we're just watching the RM prices. We have a fire -- fix of the OpEx. And touch wood, we hope that the -- there is no lockdown again. And with people getting vaccinated, we should get nearly normal business in the rest of the month. That being the case, it would be a function of the RM price increase. And of course, if RM goes up hypothetically by 6%, then we would only need to increase price by 3% and, of course, minus all the other OpEx work that we are doing. So we really have to -- but historically, Aditya, we have not increased prices beyond 3% to 4%. It comes out as a balancing figure when we look at predicting 21% EBITDA margin.
The next question is from the line of Bhargav from Kotak Mutual Fund.
My first question is that in your opening remarks, you mentioned that you have been expanding distribution in the rural areas and Tier 3, Tier 4 cities. Now given these markets are extremely price sensitive, how do we ensure that, that will succeed in these markets?
As part of -- actually, Jockey, we have always ensured that we give a very good value-for-money proposition to our consumers. And we are also picking and choosing the products which are right for those markets from the current portfolio. And of course, when -- if we are here to develop any new products for those markets, we will always make sure that it continues to be a high-quality product without (sic) [ with ] no compromise to quality and value-for-money proposition. So Gagan you want to also throw some light on this?
So our contribution from the smaller towns still is about 50%, and that shows us the potential that we have. And as I mentioned last year, we took a bet on expanding the outlets. And when we saw the throughput per outlet, as I mentioned earlier, it was very, very overwhelming in terms of the numbers that we saw. So that shows us the potential of that there is A jockey customer even in these towns. And while we are a premium brand, but obviously, we are still affordable premium brand. And a lot of [ NCC ] A, B population, look, they stay in these towns. And normally, when they were to buy Jockey, they would -- when they come to the bigger town is when they would buy. That is the kind of feedback that we got. But as we are expanding more into these territories -- and also, the reverse migration now from metros to the smaller towns post the pandemic because of work from home. So these are the Jockey customers who used to be there in metros, and they have gone back as well to the smaller towns. So the result has been, as I said, pretty healthy that -- what we have seen in the last 1 year. In the first -- in Q1 also, 50% of the outlets that we have opened have been opened in these smaller towns. And our current portfolio itself is giving us a lot of encouraging results. While we will look at maybe -- if it warrants, maybe looking at products for the smaller markets, then we will look at it. But currently, from the current portfolio that we have, we are getting very encouraging results from all these outlets.
Sir, is it possible to call out at which stage would we be where we are sort of opening up your new stores in the Tier 2, Tier 3 cities?
Could you ask this question again, please?
So I'm saying that is it possible to call out a few states where you are sort of trying to penetrate in these Tier 2, Tier 3 cities?
Yes. So we -- I mean, we have expanded majorly in center. We have expanded in UP, Maharashtra, [ Bengal ], Rajasthan. These are the states where we have expanded, everywhere. But these are the states we have -- where we have had majority of the expansion.
And my second question is on your significant pace of opening new EBOs. I know you focus on EBOs every year. Now when we talk to the MBO channel customers of yours, they're many times are scared of the new EBOs coming up nearby groceries. Because essentially, it's very difficult to see a company trying to succeed also in retail as well as sort of distribution channel. Now what is your rationale? I mean -- and I should take -- or sort of expand those to the EBO route as well as to the -- I mean, don't you think it could sort of cannibalize your sales at the EBOs?
Let me...
Rahul?
Rahul, you want to take that?
Yes. So Bhargav, well, actually, all these channels, the MBOs as well as EBOs, are quite synergistic in nature. The role of the EBOs is not only to offer the entire portfolio of products that the brand offers, but also it helps in building the brand initially in the minds of the consumers who already know the brand and hence they would probably come to the EBO. But there's a very large consumer base, which is the traditional customers who still want to shop from the MBO environment, evaluating the various brands and all that. And for these kind of consumers, having the EBO actually helps of -- to consider maybe even to buy from the MBO, which helps the MBOs in improving the Jockey sales of the stores. So I think both these channels are synergistic, and they quite help each other in improving the sales.
And then in terms of -- is it very, very different between both those channels or it's fairly similar?
Sorry?
In terms of product collection, is it similar in both the channels? Or it is quite different in EBO and MBO?
Oh, it would be quite different. There would be -- of course, there will be an overlap because they're all part of the area of products that Jockey offers. But they probably will be operating in a different portfolio of products or the assortment of products. For EBOs, every catchment is actually a unique catchment. And we have a very innovative assortment creation process, which ensures that every store has its own unique assortment, which may be different from the MBOs. They might be working with a different target segment, more traditional customer, more mass-market customers, whereas more premium customers might lean towards the premium side. So there would be a little division.
[Operator Instructions] The next question is from the line of Gaurav Jogani from Axis Capital.
Sir, my first question is with regards to the sharp expansion in the MBO outlet that you have done. So we have expanded approximately 20,000 MBO outlets in the past 2 years. And my understanding is that there has been this pandemic over the past 1.5, 2 years because of which we this was the biggest impact there. But once things get normalized, do you expect a sharper jump up in the sales because of the throughput in these outlets also getting normalized to pre-COVID levels? So any sense that you can give on that?
Gagan, do you want to answer that?
Throughput, whether it would increase in the existing outlets or the new outlets?
No. So my point is that with the 16,000 outlets, you were doing, 2018 [indiscernible] sales [indiscernible]. Now with the additional 2,000 -- 20,000 outlets that you have added, I do understand that during this pandemic, the sales were impacted in the older ones as well. But once things normalize, even if these outlets goes to the older levels, and -- would you expect the incremental outputs then coming through this then taking the total sales overall up?
Well, yes, distribution always works that way. While you expand the distribution, you will also -- one, you -- it's ease to the existing customer who travels to outlet which keeps a product. But at the same time, you acquire new products also -- new customers also who come to that outlet. So as things normalize, we are very confident that our existing outlets will definitely pick up like the high street ones where customers' footfall had gone down. But at the same time, the new ones which we opened up, those will continue to have repeat customers coming in. So overall, I think we are in a sweet spot there. Existing outlets, throughput also we expect to increase. And the new doors that we open, they will continue to give us revenue. We are very confident on that.
So sir, in that case, could we see a sharp pickup in sales going ahead the next time?
So it -- I would say yes, definitely, it will lead to incremental sales. But as you open more doors, it also has to do with incremental sales and also better service to the customer, that you go nearer to the customer. So both ways. It will give us incremental sales, but more customer satisfaction. So both will go hand in hand. So I would say it will be somewhere in between. We will get incremental sales, but the distribution expansion is also towards servicing the customer by going near to him. But yes, to answer your question, definitely we will see incremental sales coming in.
My next question is with regards to the outlet that you were just mentioning to the previous participant. So you mentioned that the 15% contribution is now from these rural outlets then? 1-5?
Yes, rural contributes -- the definition of rural is -- I would say that the Tier 2, 3 cities and below and rural combined give us around 50% of our revenue. And pure rural would be somewhere lesser than that. It will not be that much.
So -- I'm sorry. So it's just 5-0, sir, unless revised or -- well, 1-5 or 5-0?
5-0 comes from Tier 2, 3, 4 and rural.
Sure, sir.
The rest are from metro and Tier 1. That's 50%, yes.
Sir, also the last one from my end. Is that -- or in that case, when you extend more to these Tier 3, 2 towns, would we also expect the throughput per store might go there and go down? Because these outlets, while they might give a good ROI per outlet, but the throughput might be lower per store basis versus the Tier 1 cities.
Throughput overall per outlet would not be lower because the number of outlets that you'll open in a smaller town would be relatively less. But when you look at a metro, because of the high density of population, the number of outlets would be more. So when you compare to a bigger city, the throughput definitely is lesser in the smaller towns. But overall, it is still not -- it is comparable to an extent. It might be 20% lesser, 30% lesser compared to metros. But the sheer number of outlets would be less. So the number of players themselves are less who will be keeping the product because of the density of population.
Yes. And I just wanted to also clarify since you asked some questions about the rural. Sometimes, the definition of rural can vary from brand to brand. They may classify differently. For us in Page, rural means any town with 50,000-or-less population.
Shall we move to the next question?
Yes, I'm done.
The next question is from the line of Tejash Shah from Spark Capital.
Sir, my question pertains to the relative pricing and mix. So we have been very strong on meeting pricing and the mix, as you mentioned, every year, 3.5%, 4%. Now that strategy was going well until FY '17, '18 when we are growing revenue as well despite having such strong pricing actions. But last 2 years, that trade-off has not worked out. So just wanted to understand, where do we stand on -- relative to pricing and mix versus other brands in the men's innerwear in particular? Hello?
Yes. Yes. So as far as pricing is concerned, if you're referring to EBITDA, we are always -- the price increase, it has worked out beautifully for us. You might have seen a different number because of the lockdown. So if you take the months where we have worked with normalcy without lockdowns, we have always achieved 21% or 21%-plus EBITDA in all the months in which there were no lockdowns. So it continues to work very well for us. And compared to competition, okay, there are 2 categories. One is the economy brands, and we are not in that space. So we can't directly compare with the economy brands. However, I can say our price starts where their price ends most of the time for most of our products in men's innerwear. But the absolute rupee increase will not be much for the consumer. It can be -- it can mean INR 20 or INR 30 for the end consumer. But we always make sure as a brand that our prices are in line with the quality of the product and it's a good value proposition for our consumers. And we always focus on that, and that's a core value at which we want to build the product around. So we will continue to focus on that and give a good value proposition, absolutely. No doubt about it. And when it comes to certain other brands which may be directly in the same market as we are, I think the prices will be very similar or, in many cases, they may be INR 20, INR 30 rupees more than us. So I don't see any price pressure in that sense as far as competitiveness is concerned. We continue to be a value-for-money proposition.
Sure. So sir, that was precisely my question, that for us, throughout our listed history, our pricing strategy is somewhere -- explicitly or implicitly, the goal seek function has been this 20% to 22% margin. And then that worked beautifully because revenue also kept on responding very well to that strategy. Now for last 2, 3 years, we have seen that somehow the growth is not coming through. And particularly, 50% of our business, as just mentioned, are where it is not responding. So just wanted to know, is it a category-level issue? Because the other mentioned player, obviously not comparison -- no way comparison to what positioning we -- Page has or Jockey's products have. But do you think that somewhere that 20% to 22% which we keep on as a goal seek function to pricing interventions should be revisited because growth is not responding anymore?
They could disagree a bit there, Mr. Shah, right, because if you see last year, we -- even though we might have de-grown by 4%, but you see, we almost lost 1 quarter. So without 1 quarter in place, when you de-grow only 4%, we have actually grown by 20%. And that's why you saw only a minus 4%. So in that sense, if I see the months -- that's exactly what I was telling you sometime back. If you see the other 9 months where we worked with normalcy, we grew. In fact, we had our history's best Q3, and the second best quarter was Q4 of last year. So it was phenomenal. And that shows the potential to grow. And we actually grew in those 2 quarters when market went back to normalcy. So we do believe that there is no pressure for us to increase the growth. And we are very, very optimistic about it. And our products are very well received. And if you also see, we also added many other ranges now in early days as far as Junior is concerned. And then -- so tremendous growth possible on the Junior business. Athleisure business also, if you see, as a percentage of market share, beyond single digits. So there's a tremendous scope for growth on the athleisure side of the business as well. So -- and again, rightly said, rural is something which we are -- in our path. So when we go there, that is also an opportunity. So we do see a lot of growth opportunities. And we also upgraded our products, and the feedback from the market is very, very exciting. So we are very, very confident about growth.
The next question is from the line of Bharat Shah from ASK Investment Managers.
Yes. So the question is I heard saying that e-commerce activity has expanded materially as a percentage of our business and that channel is working very well. But I have a bit of a mixed feeling about it. Ultimately, those businesses have to be close to customers, and traditional model has been to make a good product, build a brand, put it into distribution channel and sales without knowing exactly who the final customer is, what is their behavior. The technology is teaching us that there is a way to know each and every customer even for a larger business. And technology allows you to really know your customers more intimately, what he prefers, what he does. They need [indiscernible] money, et cetera. By putting to -- more and more e-commerce kind of channels, really our connect with the customer gets snapped. If it in a traditional business model, it didn't take a very good connect. It was more like a distribution model. But if we continue to be on that path, don't you think that takes you away from the final customer, his motivation, his needs and why do he prefers a particular product compared to other?
Yes. Okay. Thank you for asking. That's a good question. What I can say is it's not that we are pushing the e-commerce business. It is more of a pull. The consumer is obviously preferring the channel. And this is understandable when you have to be at home and want to get your product, you can't step out. The only way to shop is through e-commerce. So obviously, across sectors, including us, if you see any FMCG, the e-com, they actually grew and it's got accelerated. And to this, fortunately, unfortunately, the new buying habit of our consumers. So we need to be ready to it. However, what you said is also right. By doing that, we should not lose touch with the consumers. So today, the e-commerce is 7.6%. With the growth which we are having, even if e-com reached 12% or 15% of the business, predominantly, bulk of our customers will be using the channel or the distribution or the EBO channel. So we will be in touch with them. We will be on the ground, and our ears would be on the ground. So I don't think we lose touch. And in fact, with the new generation, e-comm also -- the feedbacks are instant. In fact, we may hear from them more directly. The voice of the consumer is much more loud and clear with the ratings, with the comments which comes. We needn't hear it through distribution or through our channel partners, we can hear it directly from the consumers also. So I will say how we manage it is more important, And we should make use of all the opportunities that present themselves. And it's a very good point which you said, and we'll be very conscious of the fact that we always hear the voice of the consumer.
Sir, even if it's to -- that would be the issue. How exactly are we acquiring data of the customer, [ HL ] customer, not just the distribution partner? Through EBOs, through MBOs and through others? Do we have a method and a way and a mindset to kind of get inside the mind of a consumer and get the data so that over a period of time, all that data can be analyzed intelligently and we can bring a greater proximity and power to the -- or power or proximity to customers? Do we really -- we just put it into our EBOs and MBOs? Do we have a means of knowing how exactly they sell and who the buyers are? And do we make any attempt to get data about them?
Yes, Bharat. So yes, maybe in terms -- so we have been -- it's -- are very close to the market. We sense the demand. They -- we see how the demand is for our products, and this is mainly sensed through what we hear on the ground and where our consumers are. So that's really helpful. We also make sure that we have the right product at the right place at the right time so that we know that we are fulfilling those demands. And if there are demand dips that they message to us through the supply cycle, so the auto replenishment system is really kicking in very well. And the auto replenishment system, I'm sure, will help us. And we have quite a lot of sales analysis in place. And we have a very strong sales force on the ground. And they visit the market, get in touch with the customers, and we continuously monitor that. And they have all the digital enablers to capture data. And this is also supported by a very strong CRM team in our office, and they also collect all this information. Along with that, our business excellence team does all this data mining and takes intelligence out of all the data which is harvested through these -- all the channels. So we are armed with all this information, and that is actually what is helping us in coming up with the right products, be it the current products and new launches, and also in making sure that we are continuously improving on having the right product at the right place at the right time.
My second question is the balance between pull and push. Is that great brand have the pull power? Or should we be primarily pulling moving forward. I mean that shouldn't -- the propelling force should be the distribution power. Somehow I get a feeling maybe I'm wrong, but I'm not seeing enough of the brand pull factor. Are we really promoting brand equity, recommending -- working deals and building the brand as much as we were driving earlier? Or we should be doing it?
I Sorry, I couldn't hear you well, so I'll probably have to ask you repeat your question because I [indiscernible].
What I was saying was that any great brand should be a very strong combination of both pull and push where pull is created by the brand equity. Equity is maintained, creating that positivity. So that should be prime force. And distribution should be the next and secondary force. And the 2 together creates a great commercial proposition. I somehow get a feeling that we -- are we spending enough on building the brand, enough on promoting brand equity?
Yes, sir. Like as far as marketing is concerned, we typically spend around 4% to 5% of our top line for marketing. And last year, of course, it was more focused towards -- below the line. So that -- the point of sale material, the size, all that. There's no cutting cost. And the above the line was more towards associates. But it's -- this is mainly because we wanted to moderate sales last year because of the pandemic. But if you see all other years, you're always focused on this very aspect of creating that brand equity. And we have had a very good brand equity so much so that we are now concentrating most of our marketing towards the products along with the brand rather than pushing the brand alone because the brand has been very present and it's the top of the mind recall for all of our consumers. And therefore, it is more getting bias towards the product side of it also with a fine balance between the brand and the product. So we will continue to invest. In fact, in the coming months, if things are normalizing, we will be continuing to work on these strategies as far as marketing is concerned. It has worked out so well all these years for us. And last year was just an aberration. Because of the pandemic, we didn't want to go very aggressive. We wanted to moderate it. But that is not going to be the go-forward plan.
I'll add to that, Mr. Ganesh, that the distribution equity is not really different from the brand equity. You have a strong distribution equity because your brand equity is very high. We were able to expand 200-odd stores last year of the 115,000-plus MBOs because of the demand that was there for the brand Jockey and the possibilities that the large consumer base has for the brand Jockey. So to me, both are actually interrelated.
Ladies and gentlemen, due to time constraints, that was the last question. I now hand the conference over to Mr. Chandrasekar for his closing comments. Over to you, sir.
Thank you very much. It's been a wonderful 1 hour with you, as usual. And hopefully, we have answered all your questions. In case still you have some questions, you can always write them to the Investor Relations, and we'll be happy to reply to you. And thank you very much. Have a good day.
Thank you. Ladies and gentlemen, on behalf of Page Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.
Thank you, thank you.