Tuesday, September 20, 2016

Page Industries

Probably around 6 years ago or so ( don't remember exactly when), I had entered this stock at a "lofty" price of about 2550 or so. What I was skeptical about, was not the price ( I don't get intimidated by the price of one stock) but the rather high P/E that the stock was asking for. I was skeptical, that for an underwear company, a P/E of about 40 was " not comfortable" ( pun intended). Bought just 10 shares, thinking " I will buy more when the prices crash to 200( stupid me!)"
That 200 never came. 2550 has become 15000 now, over this period. I have stayed on, kicking myself that I should have bought more then. Hindsight wisdom is always dis-heartening, you see! But that is not the point.

What made me pick the stock? The brand name Jockey, though not very big then, seemed to strike a chord. I had observed that the company was positioning it nicely, to tap into the youth market. Immediately, I guessed that this could mean premium pricing, and increased profits, as long as the product quality was good. I told myself " P/E 40 looks scary, but I am prepared to lose 20000 rupess on this horse if required, if this turns out be a fad".

Turns out to be anything but a fad. The brand is ubiquitous, in all urban centres, and tier 2 cities. It is amply evident that "mind share" of the customer is big, for Jockey. There are other brands like Rupa, Lovable etc, that are listed, and are doing OK- but not as dominant as Page, at least going by the numbers and the consistent growth, quarter on quarter.

They started off with underwear. Then comfortably expanded into lingerie. And then extended the brand into simple tees. And have gone on, into socks. What next?

I did not know much about the management then. I do not know much about it even now. Not that I care, in this case, for, the proof of the pudding is in the eating.

Jockey is a dominant brand. From the looks of it, it will remain so for some more time. The company, to me, clearly have got their marketing act together very well. Their product positioning is spot-on, and pricing continues to be premium.
In hindsight, Page Ind has been a great buy for me. I am staying on.


PS: I have not given any numbers to back my above statements, since I am sharing my experience, and not recommending it per se.
If one wants to enter, it is not too late even now. Nibble during dips - after doing your homework.

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