PAGE INDUSTRIES: 'THE DASHER' (BEST ENTRY PRICE)

PAGE INDUSTRIES is another one of those so called 'Consumption plays' which have been the darling of the Markets for some time now. As we all know it is the India franchisee of the 'Jockey' brand of innerwear and allied products. At CMP 2686 (52 wk high 2770, 52 wk low 1202) on the NSE it is trading at PE(TTM) 42 approx, and has given returns of about 120% over the year and 70% in the last 6 months.!!!

Getting straight to the TECHNICALS , looking at the 2 year Price Charts we see that both 200 DMA (at 1749) and 150 DMA (at 1838) are excellent supports and both have NEVER been violated in the last 2 years. On gut-feel I would plug for the 150 DMA being a better support since on 3 separate instances the Scrip has smartly bounced back from said 150 DMA. (ie on 14/5/2010, 28/5/2010, and on 7/2/2011). In fact so sharp has been the upmove in the past 5 odd months that even the 50 DMA (at 2241) on the 6 month price charts has never been violated since 14/3/11. Truly phenomenal.

Now examining the FUNDAMENTALS briefly we all know that it is a Market leader in its niche segment; slated to grow at a possible 50% CAGR; has good brand pull; ever increasing demand pool; upcoming tie up with Speedo etc etc. In short it could do an EPS of about Rs 75 odd this year which means that at CMP 2686 is trading at about 36x FY2011-12 E, which is a tad expensive for fresh entry. Frankly I would be more comfortable entering at about 30x Fy12E which means a level of about 2250 or lower.

Taking a combined view I feel that levels of 2250 can be a good first entry point with solid  support in the 1750-1850 zone providing good downside protection. Keeping in mind that the Stock is volatile due to a low float and often moves on thin volumes, 2250 levels may be available on bad Market days.