At Marcellus, we have a large position in Page Industries, the Indian franchisee of Jockey undergarments. We have written about the company and its promoter Sunder Genomal several times including in our 2016 bestseller “The Unusual Billionaires”. As we have said before, the gradual demise of the Indian conglomerate has brought to the fore a new generation of smart, driven promoters who create products that many of us use in our daily lives and thereby create jobs and immense wealth for themselves for their shareholders. Veteran broadcaster Udayan Mukherjee does a fine job in this interview as he brings out the scale of Mr Genomal’s achievement in migrating to India from the Philippines in the early 1990s and then proceeding to transform the staid Indian undergarment industry.
Four things stand out in Udayan’s interview of Mr Genomal:
Mr Genomal’s deep knowledge of the undergarment business honed as it were in his family’s business in the Philippines (where the Genomals had had the Jockey franchise for nearly 50 years prior to Sunder Genomal migrating to India). His depth of knowledge gave Mr Genomal the courage of his convictions after he migrated to India in the early 90s. In a country convulsed by communal riots and the fallout of the Harshad Mehta scam, Mr Genomal did his research on the undergarment market and undeterred by what the doomsayers were saying, launched his business in Bangalore (the choice of the city too was a contrarian call in those days).
Page’s ability to take adversity and turn it into advantage. Through Covid, Page turned Athleisure into a big generator of profits (now accounting for over 40% of Page’s profits) and invested heavily in tech to help its dealers and distributors deal with Covid. This same investment in tech has also helped Page manage inventories better and become a more cash generative franchise.
Mr Genomal’s ability to understand and quantify the almost infinite potential of the Indian market when it comes to daily essentials. Page started with men’s innerwear, then entered women’s innerwear and then wear kids’ innerwear. Now, the latter two verticals have become so large for Jockey that each of them have been turned into separate businesses with a separate distribution channel. In the next 4-5 years, Mr Genomal expects women’s innerwear to be as big as men’s innerwear in Page’s overall revenue split (for context: Women’s innerwear currently is less than half of men’s innerwear).
Mr Genomal’s very interesting attitude to competition which is “Yes, we welcome competition but we are the best and we will keep pushing ourselves to keep getting better”. The financial metrics published by the various undergarment manufacturers bear Mr Genomal’s claim – no other undergarment manufacturer has got remotely close to Page’s ability to compound free cashflows at 25%+ year after year.
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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
