~

JOCKEY
10th March 2020

The Secretary The Secretary

Corporate Relationship Dept. National Stock Exchange of India
The Bombay Stock Exchange Limited
1st Floor, New Trading Ring Exchange Plaza
Rotunda Building Bandra Kurla Complex
Phiroze Jeejeebhoy Towers Mumbai - 400 051
Dalal Street, Mumbai - 400 001

Dear Sir,

Sub: Transcript of Investor call

We herewith enclosed the transcript of investors call for the financial results for the
Quarter ending 31 st December, 2019.

This is for your information and records.

Thanking you,

Yours truly,
For Page Industries Limited

Murugesh C
Company Secretary

Encl: as above

ID P A GE INDUSTR IES LIMITED

Head Office : Cessna Business Park. 3rd Floor, Umiya Business Bay. Tower-1 . Varthur Hobli, Outer Ring Road. Bengaluru - 560 103. Ph: 91 -80-4946 4646.
Corporate & Regist ered Office : Cessna Business Park, 7th Floor, Umiya Business Bay, Tower-1, Varthur Hobli , Outer Ring Road, Bengaluru - 560 103.
Ph: 91-80-4945 4545 I www.jockeyindia.com I [email protected] I GIN II L 18101KA 1994PLC016554
 “Page Industries Limited
Q3 FY20 Earnings Conference Call”

February 13, 2020

MANAGEMENT: MR. VEDJI TICKU – CEO & EXECUTIVE

DIRECTOR
MR. CHANDRASEKAR– CHIEF FINANCIAL
OFFICER

Page 1 of 17
 Page Industries Limited
February 13, 2020

Moderator: Ladies and gentlemen, good day and welcome to the Q3 FY2019-2020 earnings Conference Call
of Page Industries Limited. As a reminder, all participant lines will be in the listen-only mode
and there will be an opportunity for you to ask questions after the presentation concludes. Should
you need assistance during the Conference Call, please signal the operator by pressing “*” then
“0” on your touchtone phone. Please note that this conference is being recorded. We have with us
today from the management Mr. Vedji Ticku-CEO and Executive of Director and Mr.
Chandrasekar, Chief Financial Officer. I will now the hand the conference over to Mr. Vedji
Ticku for his opening remarks. Thank you and over to you Sir!

Vedji Ticku: Thank you. Good afternoon, ladies and gentlemen. This is Vedji Ticku here. I will just give you a
quick update about our Q3 results.

Our revenues grew by 7.1% year-to-date and around 7.5% for Q3. Our volumes grew by around
a percent for the year-to-date and dip of around 2.8% for Q3. Volume growth has been flat
during this year, due to the sluggish demand. Our outlook for the market remains positive for
future and we continue to invest in our key resources, channel partners, automation and
technology. Our marketing efforts continue both online, offline, media, out-of-home and most
importantly as a point of sale.

On the capacity side to support our future growth plans, we continue to work towards doubling
our capacity from the existing 260 million pieces in next four years to five years. Operations in
our new plant near K R Pet have commenced and we have close to around 150 out of the 800
machines planned operational now. We will have all the machines operational by the end of June
2020.

On the product side, we continue with our focused approach on our core business verticals of
men’s innerwear, women’s innerwear, athleisure for both men and women, socks and towels. We
have launched some innovative products both in terms of fabric innovation and standing across
all our business verticals.

The kidswear business continues to be a special focus area. It has shown an encouraging trend
with good customer acceptance and feedback. We have a separate and focussed field in
marketing strategies for Jockey junior vertical. We now have a separate sales team of over 120
people across the country, headed by an independent National Sales Manager, to have focus on
the business. We also have special marketing plans to support the initiative.

During quarter we opened two 2 stores only for Jockey junior business.

I now hand over to our CFO, Mr. Chandrasekar to take you through the financial results.

Chandrasekar: Good evening all and welcome to the call. Our nine-month revenues for this financial year, is
24,042 million, a growth of about 7.1%. The nine months PAT is 3,122 million. There is
degrowth of 2%. The PAT for the nine month is at 13% as against 14.2% year-on-year. However,

Page 2 of 17
 Page Industries Limited
February 13, 2020

the gross profit remains at 40%. It remains strong and steady at around 39% to 40% even
compared with last year and previous quarters.

A temporary dip at PAT level is entirely due to the investments that we have made in people, in
technology, in sales and marketing in the channel and this is done solely with an eye on the
future growth which will also drive our profitable growth in the coming quarters and years to
come. We have also maintained always that we never cutback on our investments even when the
market is sluggish, and we continue to make the relevant spends to build a strong foundation for
the company.

The Q3 revenues are 7,938 million and that is also a growth of about 7.5%. The Q3 net profit is
reported at 870 million, there is degrowth of about 14.6%. The PAT is 11% against a comparable
last year of 13.8%.

So, with these opening statements, I suggest we proceed to the Q&A.

Moderator: Thank you. Ladies and gentlemen, we will now begin for the question and answer session. The
first question is from the line of Dhaval Mehta from ASK investment. Please go ahead.

Dhaval Mehta: Good evening team. Thanks for the opportunity. Sir, my question is related to incentives, so if
you see in this quarter, incentives have increased by roughly around 180 BPS YoY, so in
absolute number from Rs.21 odd Crores, it has increased to around Rs.36.5 Crores. Is there any
change on ground in terms of competitive intensity or any change in our go-to-market strategy?
Any particular reason for such a sharp increase in incentives that we have seen?

Vedji Ticku: No, incentives have always been a percentage of our sales and we have always worked with the
budget in mind for the incentives for the year. While we could have changed from quarter-to-
quarter, we make sure that we are well within our budgets by the time we close the year.

Dhaval Mehta: Okay because even if we see for nine months, as a percentage of sales, it has increased by around
130 BPS which has actually impacted the gross margin of our company despite lower yarn cost;
How will this trend will be going forward? Should it will be around 4% to 5% of sales or it will
be a specific number?

Vedji Ticku: It has always been 3.5% to 4% of our sales all these years and that is how we have maintained it
and we look forward to maintaining it going forward.

Dhaval Mehta: Okay. Sir, my second question is if we see our volume performance at 1%, the price growth is
much higher in this quarter. Is it largely because of mix, because of winterwear or is there any
other thing to call out?

Page 3 of 17
 Page Industries Limited
February 13, 2020

Vedji Ticku: No, you are absolutely right. It is because of the mix and of course yes, the winterwear – this is
the peak season for winterwear and that is at a much higher price. It has higher average price as
compared to our average price for innerwear.

Moderator: Thank you. The next question is from the line of Avi Mehta from IIFL. Please go ahead.

Avi Mehta: Sir, I just wanted to reconfirm that you saw a 2.8% decline in volumes in this quarter, could you
give us a sense on how it has been across the segment qualitatively?

Vedji Ticku: Across the?

Avi Mehta: Men’s, women’s and the leisurewear any qualitative comments and was it across the board or
where is this declined been sharper in?

Vedji Ticku: I could say that it is sort of uniformly across the board. It is not specific to any vertical or a range.

Avi Mehta: Okay and Sir second is that in a last quarter you had highlighted that gross margins were under
pressure, it has not declined on a YoY basis largely because of product mix. Is that the same
reason for the decline in gross margins and is the demand which is resulting in this pressure and
hence likely to continue, any comments on that would be helpful?

Vedji Ticku: The demand pressures have been here throughout the year for this entire financial year and if you
look at the gross profits, we have maintained the gross profits. Some costs which we have taken
on keeping the future in mind, have sort of adversely impacted the net results, but as far as the
gross margins, they have not changed much.

Avi Mehta: Sir but If I look at the gross margin, I see there is an impact that I see in this quarter specifically.
I was just trying to parse whether this was because mix again or was there any promotional
intensity?

Chandrasekar: Yes, you are right Avi. As far as the gross margins are concerned, it is 38.2% for this quarter
against 40.1% for Q3, FY19 and that is largely because there was under absorption of the factory
overhead and labour for this quarter alone but on a nine months basis, we are 39.6% YTD as
against 39.4% for 9m, FY19 and when I say gross profit I include all the material, labour and the
factory overhead. Gross margins would remain around that 40% mark consistently even going
back to last year.

Avi Mehta: So, the price increase that we have taken recently should help us pass on this. Is that fair that we
have to look at it because typically peak price increases at this time, right? So, would that help us
tide over these pressures as we go forward in across margins?

Vedji Ticku: Price increases have helped and yes you are right. Going forward, with a full impact of the price
increase would improve the margins a bit.

Page 4 of 17
 Page Industries Limited
February 13, 2020

Avi Mehta: So, would you read that your margins expectations for FY2020 at 21% on an overall basis given
that nine months has 19%, how do you see that trending in and what could you give it?

Chandrasekar: YTD are around 19% as far EBITDA before financial income and finance charges. In Q4 we do
expect to improve that with better recoveries of the overheads but as Vedji said, at the same time,
we are creating a future by investing in people, technology, automation and in the channel, so
that could have some impact. The expected volume and revenue growth has not come but if that
be so then the margins would be pretty much intact.

Moderator: Thank you. The next question is from the line of Akshen Thakkar from Fidelity Investments.
Please go ahead.

Akshen Thakkar: Thank you. I just wanted to understand the way you define gross profit in the presentation. Over
and above the raw materials that you guys have disclosed there are other cost line items sitting
over there, what are the different line items which you include over and above the raw materials
over there?

Chandrasekar: Apart from raw material, you have subcontract expenses, power and fuel, consumable, stores and
spares, repairs and maintenance and all of that. So, the gross profit is after all those factory
related costs of materials, labour and overheads.

Akshen Thakkar: Okay, if I see your annual wage cost last year let us say was Rs.450 Crores or Rs.467 Crores,
what part of that would be towards manufacturing, I am just trying to get a rough sense here?

Chandrasekar: YTD labour cost would be in the region of 2,000 million.

Akshen Thakkar: I missed what was the volume growth for the quarter Sir, if you could just repeat that?

Vedji Ticku: The volume growth is -2.

Akshen Thakkar: Could you just help us understand volume growth despite our best efforts has been slightly
muted, how much of this is generally with what has been happening in the market or is there like
channel level destocking or something to that affect, if you could just give some colour as to how
do we read the volume performance over here?

Vedji Ticku: Akshen, as you are aware that we also have close to around 700+ own stores now and that is
quite a good barometer for us to understand what is the general sentiment and trend in the market
because these stores are across the length and breadth of this country, across the cross section of
cities, metros, Tier I, Tier II cities and we very clearly can see a trend that the walk-ins to the
stores have reduced considerably in the last couple of years. So, one of the biggest reasons has
been that the offtake from the stores and the shelves is low, that has been the only reason for this
degrowth in the volume.

Page 5 of 17
 Page Industries Limited
February 13, 2020

Moderator: Thank you. The next question is from the line of Aditya Soman from Goldman Sachs. Please go
ahead.

Aditya Soman: Good evening. Just two questions from my side. Firstly, was there an increase, you mentioned
channel incentives, so despite channel incentives there was sort of a decline in volumes in the
quarter, what would you attribute that is it just the economic environment or do you also see
other competitors just giving higher margins?

Vedji Ticku: As I just explained Aditya that there is a general sluggishness in the market right now and the
offtake from the shelves is much lower. So that is one of the biggest reasons for this. For most of
the people who are now catering to the premium segment of the business, the margins are around
the same, there is hardly any difference between the margins which have been offered by all
other brands.

Aditya Soman: Yes, the reason I was asking was because you indicated that channel incentives were higher, so if
not, margins were they higher in some other format in terms of extra credit or something of that
sort?

Vedji Ticku: No, not at all. What I said earlier was that our incentives are bound by the budget. So, when we
start the year, we have a proper plan for the amount which can be spent towards the incentives,
especially the trade incentives and we, by and large, stay within the parameters of our budget. So,
there could be quarter-to-quarter dispersion between the amounts which could vary but by the
time we end the year, we always had been within our budgets. So, I do not see that it is changing
much and we should be within our planned budgets by the time we close the year.

Aditya Soman: Just lastly, in terms of volume decline was there a difference in sort of you own stores relative to
say the MBOs?

Vedji Ticku: No. It is actually an interesting question. For some reasons, we have been noticing this for many
years now that our company’s overall growth and our like-to-like store growth, our own store,
the EBOs, it has always been more or less 1% + or -, they have always been almost coinciding
and they are quite similar, both the MBO business and the EBO business as a percentage sale of
growth.

Aditya Soman: Understand. So, some of your competitors have indicated that they were sort of some wholesale
disturbance because of availability of credit and supply but for you it seems like it is like a small
uniform across?

Vedji Ticku: We have always been prudent with the number of days of credit given to the channel and it
always worked for us all this while. We do not have those issues.

Moderator: Thank you. The next question is from the line of Bhargav Buddhadev from Kotak Mutual Fund.
Please go ahead.

Page 6 of 17
 Page Industries Limited
February 13, 2020

Bhargav Budhadev: Good evening. Sir is it possible to know what has been the average price increase across
categories on a YoY basis?

Vedji Ticku: Our prices are within the range of 4% to 5% and that even for this year our prices had increased
around 4.5% overall.

Bhargav Budhadev: Secondly, Sir how has been the implementation on the ARS side, has it been implemented across
categories and what percentage of geography would have been covered by ARS?

Vedji Ticku: As I had explained in my previous call also we did not go by the geography, but we went by the
business size. How we worked was that we started with larger distributors and kept on going
down and currently close to around 30% of our business is covered through ARS which is across
the geographies and that is how we approached it.

Bhargav Budhadev: Would you attribute this volume sluggishness to ARS implementation?

Vedji Ticku: Not exactly, to some extent it has for sure because now the stock levels that our distributed points
are more in line as to what they should be. So, may be to some extent it has definitely made an
impact to that but we think for the future this is the right way to do it.

Moderator: Thank you. The next question is from the line of Tanvi Shetty from Axis Securities. Please go
ahead.

Tanvi Shetty: Could you give me the breakup of your segments across in terms of revenue across men’s,
women’s, athleisure and kids?

Vedji Ticku: Sorry Tanvi we do not give that breakup as a policy.

Tanvi Shetty: Sir could you would then give me a sense on qualitatively how all the segments have been doing,
what initiatives you have been taking specially in women’s Sir assuming 20% is women’s?

Vedji Ticku: As I said in my opening statement, we have been trying to work on each and every vertical of
business whether it is men’s innerwear, women’s wear, athleisure and especially the junior
business which we are taking very seriously, and we have separate team set up for that. So,
coming back specifically to your question about women, there had many new products which
have been launched on the women side of the business both in the innerwear as well as the
outerwear side. So, we have seen some good progress on the outerwear business and especially
on the bra business. We have launched many new styles in the bra which was a feedback from
our product management team and we implemented all those requests from them and we have
launched many of them and some of them are still in the early stages as we will continue
launching new products on the women’s side and there is some good traction in our EBOs for
these new products which we are launching.

Page 7 of 17
 Page Industries Limited
February 13, 2020

Tanvi Shetty: Thank you Sir and my next question will be on distribution front, could you tell us that how
much of your revenue comes from wholesaler or is there any wholesaler in your distribution
model?

Vedji Ticku: No, we do not have wholesale as a model at all. We sell only through distribution and besides our
e-commerce business and direct business which we do is key accounts, the entire business is
done through our channels. So, I would say that around 90% of our business is through our
distributors.

Tanvi Shetty: Okay and what will be the number of distributors till date and what rate would they be growing,
if at all?

Vedji Ticku: Currently, we have around 4300 plus distributor accounts because we have distributors for
verticals now and these are typically going by around 4% to 5% year-on-year.

Moderator: Thank you. The next question is from the line of Vinod Bansal from Franklin Templeton. Please
go ahead.

Vinod Bansal: Couple of questions, one you mentioned the whole market sluggishness continues to drag on the
performance. If you look at the other players in the apparel space in the same discretionary
apparel space which may have a larger ticket size and typical innerwear yet the commentary
there is that the market seems to be doing fairly well and the reported SSGs are very healthy high
single digits, low double digits. Where is it that innerwear is getting disconnected from that
market despite both being in similar ticket size and similar discretionary space?

Vedji Ticku: On the contrary, Vinod what reports we have is that most of the apparel brands actually in the
quarter have degrown except one group, most of the others have degrown. So, if you are taking
just one, I am not sure about that but it is no difference at all. The inner wear industry is very
much part of the apparel piece and most of the apparel and the innerwear, even if you take all the
innerwear competitors or dealer wears, or the people playing in the segments, this is a general
story because we have the report from all other companies which we look at and the story looks
to be quite similar, and even worse at many places.

Vinod Bansal: Sorry I do not have much of history about this business. Could you share your insights as to
when we had downturns macro slowdowns earlier three years - four years back or five years – six
years back in 2012-2013 go by priors’ downturns, did the innerwear perform as weak as you
have this time around or this is particularly weaker this around for the industry?

Vedji Ticku: This time around, it is weaker. And see, the other thing around was 2008 which was almost 12
years back. And even our size was very different .It is definitely little bit weaker this time
around.

Page 8 of 17
 Page Industries Limited
February 13, 2020

Vinod Bansal: I am sorry I joined a bit late. Could if you share again if have shared already the EBO Same Sales
Growth for you what would be like this quarter and for the nine months?

Vedji Ticku: No, I did not share that separately, but as I said I was answering the earlier question, our growth
has been pretty similar. The overall company growth and our like-to-like growth of EBO has for
some reason for many, many years remained consistent. So, it is more or less at the same level
where the company is going.

Vinod Bansal: To repeat the question that we have asked in the earlier quarters as well. The strategy right now
would be to wait and let the macro improve and, in the meantime, do our micro initiatives like
the ARS and other stuff and grow back once the market is back in shape, is that how you are
looking at the business or there are some plans as well within that?

Vedji Ticku: While that is definitely plan A, at the same time, we are also taking lot of initiatives on the
product side to keep on improving our product and offering the value for money which Page has
pioneered in the industry. So that effort continues from our side and yes, we will need some
tailwinds to support us and we are doing everything possible in our control so that we can
proceed in the new financial year with at least something of what we are used to. This is not what
we are used to and we will continue every effort at our end for example; Mr. Chandrasekar gave
the example of investment in people, technology that continues. The ARS or digital side of the
business, both in front end and back end, are working on our supply chain. We have got on to
JDA for complete planning at the back end. So, we are investing very heavily on these sides of
the business for that we are robust and as soon as we have strong winds we are ready to fly again.

Vinod Bansal: Is it fair to presume that the ongoing quarter, the current season, is equally sluggish as you have
seen so far in the year?

Vedji Ticku: I would not be able to reply on that because that will be futuristic.

Moderator: Thank you. The next question is from the line of Mohit Khanna from Future Generali India Life
Insurance. Please go ahead.

Mohit Khanna: I just wanted to ask regarding competition and the channel – have you seen any sort of come
back in the market starting January or how do you think that the competition is fairing and where
do you see yourself because as you rightly said in the last answer that Page is not used to these
kinds of growth rates?

Vedji Ticku: Competition is not something new what Page has seen now. There have been players in the
premium segment of the market way back from 2004 when Heinz arrived in India and after that
there have been many other brands who came – some have shut shop, some are still there so it is
always been there, all through. We have always looked at all the other brands but at the same
time we have always felt that the most credible competition is ourselves, because we have to
keep on handling what we have done and keep on improving on what we have done all these

Page 9 of 17
 Page Industries Limited
February 13, 2020

years. That is not something which is sort of a worrying factor. We just need to keep on pushing
ourselves and doing things in a better way and that is what we have done all these years.

Mohit Khanna: Also, in the press release you have mentioned that lower ticket products are probably selling
more than the premium ones. Could you just elaborate on that? Thank you.

Vedji Ticku: No, we did not say that, on the contrary, it is the other way around. We are saying that one, there
is a product mix that is why there is this growth rate which you can see which is higher than the
volume growth. One is the core product mix and then within each vertical. The premium
products are selling more than the less premium, pricing wise and not the product wise. So, it is
on the contrary to what all you are saying.

Mohit Khanna: Basically, if I understand this correctly, sum this, that the higher priced products are selling more
and that is the reason that your pricing growth in this quarter looks at around 10%, even though
the price increase have been somewhere around 4.5%.

Vedji Ticku: The mix also plays a big important role as I said in the first question I answered because of the
thermal season we also sold of thermal during this quarter so that also made an impact.

Moderator: Thank you. The next question is from the line of Krishnan Sambamoorthy from Motilal Oswal
Securities. Please go ahead.

K. Sambamoorthy: Yes, most of my questions have been answered, just two questions – what was the yarn
procurement cost for the third quarter and what was it for corresponding quarter last year, as well
as what is the procurement cost for the quarter to date?

Vedji Ticku: Krishnan, we do not share the cost of raw materials but I can tell you that they have been
consistent for the year and we did not have any major spikes in the cost of raw materials.

K. Sambamoorthy: Okay and that has not happened in the current quarter ongoing quarter as such?

Vedji Ticku: I can talk about nine months, it was pretty consistent for these nine months.

K. Sambamoorthy: Okay and my second question is regarding inventory which had spiked up towards the end of the
last financial year. How does that look like now?

Chandrasekar: Inventory has come down significantly, Krishna.

K. Sambamoorthy: If you have to quantify it in number of days approximately how much would that be?

Chandrasekar: Inventory number of days has come down to about 75 days of revenues from about 85 days in the
last quarter. So there has been a significant improvement in inventory days. I also mentioned
earlier on the call that we produced less so that is the reason for the under absorption of the
factory related overheads.

Page 10 of 17
 Page Industries Limited
February 13, 2020

Moderator: Thank you. The next question is from the line of Arnab Mitra from Credit Suisse. Please go
ahead.

Arnab Mitra: First question was on the gross margins again, so you explained the reported gross margins
versus how we see it which is COGS, cost of raw material plus purchased goods plus stock
change. So, if you look at that there seems to be a very dip in gross margin but the way you see at
there is much of a dip. Is it largely to do with outsourcing that you now have a much higher
proportion of outsourcing versus last year and therefore, conversion cost is getting captured in
your gross margin calculation in the RM cost itself?

Chandrasekar: So, there is one reason, but that is not the only reason. So we have to take a comprehensive view
of the gross margin which includes labour and subcontract expenses which are the outsourcing as
well as the factory overhead. Our gross margins have been pretty steady throughout last year and
this year also and there is 200-basis point decline in the current quarter only because of the lower
production.

Arnab Mitra: My second question was on your EBITDA margins now if we go back in to history you normally
used to operate at 21%-22% this year probably you will be more like 19%. So, do you see this
more as a new normal or as growth comes back you will expect operating leverage to take up the
margins back to that old zone of 21%-22%?

Chandrasekar: That is always the way we look at things so this year is not a normal. I do not think we can talk of
new normal because the demand has been pretty sluggish, flattish growth so the market will
definitely come back and as you rightly said, the operating leverage will improve going forward
so we will get back to the margins that we have always been delivering.

Moderator: Thank you. The next question is from the line of Sumit Patodia from Motilal Oswal Securities.
Please go ahead.

Sumit Patodia: I wanted to understand one thing, you are implementing a new ARS system and at the same the
time, if we go through your website there seems to be an explosion of SKUs that must have
likely happened. So how challenging does this get internally? Forget the demand part, is there a
fulfilment challenge as well that you may be seeing?

Vedji Ticku: There are two things with your question, one is the new products which we have been launching
and the other is how the ARS will be managed with all these new launches. As you are aware all
our distributors are based on vertical businesses so even if you launch say 50 products, by the
time you can distribute into each vertical, and we are talking of around 4 to 5 products per
vertical because we have men’s inner wear within men’s; we have two verticals which are
premium and modern classic; then the women’s; then we have the athleisure men’s, athleisure
women’s and then the Juniors. So, it is not very daunting when you look it at when you break it
down at the distributor level and ARS is put in to place to manage the SKUs. With more SKUs, if
you are on ARS, life is much easier and ease to manage the business is the whole idea of ARS.

Page 11 of 17
 Page Industries Limited
February 13, 2020

Sumit Patodia: Right, if you were running without ARS would have a little more inventory in the supply chain
right, so I am just trying to understand if this supply chain has got leaner and that also may be
showing up in the topline decline which may not actually fully reflect the retail demand?

Vedji Ticku: As I said earlier, to some extent, of course, those number of days have been reduced from our
distributors because the whole idea is that we want our distributors’ ROI to improve, we want the
stock to be healthy and hence loss of sale is taken care of by having the right relevant stock at
each distribution point and eventually at each retail point. So yes, there has to be some pain for
some gain and this is the pain part and I am sure once we completely go through this there is
going to be a lot gain out of this.

Sumit Patodia: Second question was, are there more products or more categories that you are looking at or you
have plate full already now?

Vedji Ticku: Not more categories but product within the categories, yes.

Sumit Patodia: We will not get into let us say towel or socks or leggings, would do you call them new categories
or new products?

Vedji Ticku: No, towel is a category, socks are a category, legging it is the part of the athleisure business, it is
the women’s athleisure business.

Moderator: Thank you. The next question is from the line of Saumil Mehta from BNP Mutual Fund. Please
go ahead.

Saumil Mehta: Sir my first question is, if I do an employee basis there is a mix improvement of about 4% to 5%.
Is it fair to assume that the improvement mix really does not impact margins because margins do
not seem to improve even on a gross margins payable?

Vedji Ticku: The margins are on the overall level. When we talk about the 20% - 21% EBITDA margins, we
are talking at aggregate level. So while we take the products and we try to sort of price them very
close to that, we have this average EBITDA across the verticals of the business, but there could
some products which could be slightly higher and some slightly lower but overall at the larger
scale it does not impact the margins.

Saumil Mehta: With respect to yarn prices, you say they are stable, is it assumed they remain unchanged because
from companies which we track and it would seem that for them the yarn prices seem to be on
down trend, so have we received any benefits of the same, just wanted to confirm that?

Chandra Sekhar: Not more than -1% or -2% based on the fabric and the mix that we use. There is some
improvement, but it is not significant for us.

Page 12 of 17
 Page Industries Limited
February 13, 2020

Saumil Mehta: My last question with respect to channel checks how is the traction in the women’s and kidswear
because the channel seems to suggest that there is not much of traction your comments on the
same, how are we looking at that piece of the business over the next two years to three years?

Vedji Ticku: See it is not any different from any other vertical of the business because we have separate
distributors for the women’s as well as the kid’s business and they are managed by separate
teams on the ground. As far as the women’s business is concerned, I have said the same in the
previous call it gets draft under the overall size of Page. But if you take the women’s business
alone and compare with all other people in the business in that category, we are probably four
times to five times larger than the next person in the business or a next brand in the business. So,
we are relatively a very large business which is managed completely by a set of people at the
ground, who do not do anything with the men’s business; there is a separate focus in that way
and I was also replying to the question earlier. There are many new products which have been
launched both in the inner and outwear on the women side especially on bra side, some of them
have just come to the market and the few more are along the way. So yes, that is one market
which we are going to push very hard because even our penetration levels are much lower there
as compared to the men’s innerwear. Just an example we talk about 19% to 20% men’s
fabrication on men’s side and it is around 5% to 6% on the women side. So huge headroom and
potential there and when I come back to the junior business or the kid’s business I explained
earlier also that we have completely segregated with team from the main business. The whole
idea was to create a focus because we can very clearly see that this is one market where there is
an immense potential and there is no pan India branch who have these kinds of distribution what
Page has. We want to leverage that distribution. In fact, that is one of the major costs which
impacted during this quarter because we have hired around 120 people on the junior business
side, headed by a separate National Sales Manager who reports into the overall present of sales in
the marketing so that we have complete focus on these businesses. We are very clearly known
that we are going to push business very strongly for the next two years to three years and the
same people would deliver almost four to five times of our current turnover forward. So,
absorption of the cost will be much going forward on the kid’s side.

Moderator: Thank you. The next question is from the line of Ritesh Gupta from Ambit Capital. Please go
ahead. As there is no response from the current participant we will move onto the next that is
from the line Bharat Shah from ASK Investment Managers. Please go ahead.

Bharat Shah: All along we have talked about the resilience of our pricing capability and maintaining margins
in a certain territory. In the first nine months, it is well below that territory but not only that the
underline presumption goes all along that the margins that we are talking about, below that
margin, interest and the depreciation and other numbers would also follow in a similar way. In
other words, what will happen like an operating margin level will fall at the pretax margins in a
way but this time it has been distinctly different; not only have the operating margins fallen
below that minima, in fact not in that range of 20 even 22 but below 20 and items below interest,
depreciation other income all have moved in the other direction on an adverse side, therefore
pretax margins which were one always kind of completed have fallen well be below what one is

Page 13 of 17
 Page Industries Limited
February 13, 2020

always attributed to Page. So, I am bit confused about how we were looking at maintaining the
pricing power and strength of the margins what we are talking about?

Chandrasekar: The pricing power is intact, and we do not increase prices beyond 3% to 5%. We have never
gone beyond even 4.5% in any of the years. The pretax margins are definitely challenged, even
for nine months, and that is maybe because the growth trajectory that we were expecting or
planning, for example mid teens kind of growth on revenues could have easily absorbed all these
overheads, but the management philosophy has been to stop any investments as with respect to
people. We have brought many senior people on board in sales and marketing, and even at the
backend. We have also continued the round a bit of investment in technology and automation and
point of sale distributor management system, JDA implementation for the sales and operations
planning, as well as we are going to look at S/4HANA for the Core ERP. So, these all reflects the
confidence which we have with respect to future. The volume growth will sort of be able to
absorb and deliver margins that we are used to. We do not have the practice of over burdening
the consumer just because we have the pricing power; that is the thinking.

Bharat Shah: I appreciate. There are two points, overburdening customer is a bad idea as well as stopping
investments to create the future of the business based on the current challenges also would be a
bad idea that is way we will under invest in the business and not allow its full potential. But my
point was slightly different. It is one thing that our operating margins are below the kind of range
that we are accustomed to, even below the lower end of that range, but items below operating
margins also seems to have been affected adversely. Virtually charge of depreciation is doubled.
Interest cost is doubled.

Chandrasekar: Let me clarify that. The finance charges and the depreciation are only the results of Ind-AS 116.
So, you will see it has been pushed below the line because the rent is now treated under Ind-AS
116. The only operating item where we have declined below the line is in the financial income,
because last year we had a lot of money to invest in debt mutual funds and since we have given
away a substantial portion of the free funds in terms of dividend, we do not have that much
money like last year to invest. That is why you see a decline in financial income. That is only
item below the line which is the declined for the reasons I explained.

Bharat Shah: Exactly that was the point I was making. Presumption all along bodes, Ind-AS would result into
interest cost looking higher and depreciation looking higher I completely understand, but
presumption was when we talk about sanctity of the operating profitability. But presumption was
about how it was done earlier whereby without Ind-AS effect what the margins would have
looked like. And adjusted margins we typically, finally for later pretext level, would be maintain
in parity. Therefore, given the fact that Ind-AS impact is pushed in interest in depreciation cost
materially which is an adjustment on debt that means as an operating level the fall is much worth
than what is prima facie what we were seeking to preserve?

Chandrasekar: There is no doubt decline but if you look at Ind-AS it is only impacted by about YTD nine
months about 20 million. It is not significant, it is only between the lines but yes, your point is

Page 14 of 17
 Page Industries Limited
February 13, 2020

taken. So, we will have to attain those kinds of volumes to be able to support the investments that
we are making but we cannot keep the investment in abeyance only because of margins.

Moderator: Thank you. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead.

Tejas Shah: Kind of follow up on the previous question now on the call you mentioned that we will target to
go back to our usual margins zone up 20% to 22%, now again on the call you also mentioned that
the current time side and complete landscape has materially changed and you referred to 2008 as
well, so let us say if there is a hypothetical trade off between market share gain versus margins,
our business plan will be centred around margins revival or growth revival?

Chandra Sekhar: Market share is something which will always precede any other option available to us. That does
not mean that we will let the margins go down beyond a threshold - while we will keep eyes on
the margins but market share is something which will always be priority for us.

Tejas Shah: But the earlier threshold was also keeping earlier competitive landscape and earlier growth in
mind, now at 19%. Also if I add, with your royalty perhaps at 24% you are one of the most
profitable retailers of background, so the question is actually why to go on that path of margin
guidance and or the margin adherence rather than growths revival?

Vedji Ticku: I am sorry I am not able to comprehend exactly what you are trying to ask?

Tejas Shah: The point is for example let us say the growth revival needs margins to be sacrificed at this level
will we actually choose that strategy or will we strive to revive regain margins also?

Vedji Ticku: That something what we have done to some extent, not as a plan but we have kept investing in
for future because we know that we have a huge headroom and then there is a huge market out
there. What is happening is at moment it could be last six months, nine months or a year but
beyond that we do not go back than where we were. So, for that we have to be ready and
technology is one of the biggest enablers that we have been investing in very heavily this year,
followed by people. We have invested in many areas which we were not in the past.

Tejas Shah: Sure, and Sir if I may squeeze on last one. Sir, the overheads and the investment that you spoke
about I understand correctly from Q1 itself and all the factors which are gross margins rivals
were actually positive, realisation makes and even cost you said there was no diversions there
also, so why there is an impact straight in this quarter and not earlier quarters?

Chandrasekar: There have been specific reasons with respect to this quarter because we have further invested in
the channel and some of the costs like advertisement are more in this quarter than it was before
but on a full year basis, we restrict the budget to a certain percentage of revenues. A very narrow
view of one quarter will not give the full picture because everything is not linear in that sense.

Page 15 of 17
 Page Industries Limited
February 13, 2020

Moderator: Thank you. The next question is from the line of Suvarna Joshi from Axis Securities. Please go
ahead.

Suvarna Joshi: Most of my questions are answered. Just have two questions. One, while we have talked that we
are making all the right kind of investments that are required to grow our business and we would
just wait for macroeconomic backdrop to improve and support the growth. In that context, what
would be the lead indicators that would suggest that the growth is likely turning around for the
industry and specifically for Page, that was my first question. The second question, you
mentioned in one of the answers to an earlier participant that the distribution has been growing at
about 4% on an annual basis, so while we are largely a metro focussed kind of distribution setup,
are we also looking to expand specifically in the women ware in the Tier 2, Tier 3 cities or we
still have lot of headroom to grow in the metro at itself? So, these are two questions.

Vedji Ticku: Suvarna, firstly I will start with your second question. I am not sure how you got that we are
metro centric distribution setup. We currently reach around 2,600 cities and towns through our
distribution across the country. We cater to metros, Tier 1, Tier 2 and Tier 3 and we also have
done some inroads of the rural side of the business for all verticals of business which is men’s
innerwear, women’s innerwear, and athleisure business. But having said that asking about the
scope, we have huge headroom because our penetration levels are still are very small. Since you
asked about the women’s business our understanding is that in the target audience if we look at
around basically 15 Crore men and women out of that 50% is 7.5 Crore women, we still cater to
only around 5% to 6% at penetration. The number of pieces which can be sold to these women
are still around 5% to 6% penetration of that number. So yes, huge headroom. There is a lot of
work happening on the women side of the business in terms of product. I have explained it even
earlier about how we are launching lot of products both in the innerwear and the athleisure side
of the business on the business. So, the answer to your question, yes, we have huge headroom
and a long way to go on the women side of the business. Question number one was cues - I think
the volume growth will be the right cue for us to ensure that the things are back. We are keeping
our fingers crossed, hoping some ground reality to change, helping us to open up because
currently what we are understanding the tertiary sales are something which are very sluggish and
the walk-ins to the stores are still wanted.

Moderator: Thank you. Ladies and gentlemen that was the last question. I now hand the conference over to
Mr. Chandrasekar for closing comments.

Chandrasekar: Thank you very much for all the interesting questions. Have a great day.

Moderator: Thank you. Ladies and gentlemen on behalf of Page Industries Limited that concludes this
conference call. Thank you for joining us and you may now disconnect your lines. Thank you.

Page 16 of 17
 Page Industries Limited
February 13, 2020

(This document has been edited for readability purpose)

Page Industries Limited

Registered Office: Cessna Business Park, Tower-I,
7th Floor, Umiya Business Bay, Varthur Hobli, Outer Ring Road, Bengaluru, 560103
Tel: 080 - 4945 4545 I CIN: L18101KA1994PLC016554
Contact us: [email protected]
Website: www.jockeyindia.com

Page 17 of 17