Page Industries a ‘hold’ after WRAP’s re-certification

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December 17, 2020 12:46 AM

We believe WRAP’s re-certification and, most importantly, a statement from Jockey, should settle the uncertainty related to the issue. However, we retain our call on the company being unable to retain market share. Hence, maintain ‘Hold’.

WRAP audited the unit as per its standard procedure in October 2020 and has re-certified the facility to be socially compliant. Jockey also issued a statement in support of Page.

Page Industries (Page) today released an update mentioning that Worldwide Responsible Accredited Production (WRAP) has given re-certification to the company’s Unit-3—plant at the centre of controversy post Norges Bank’s findings. In addition, Jockey International (Jockey), in its statement, has reaffirmed Page’s track record, long-standing partnership and appreciation of its co-operation on the issue and the consequent clearance.

We believe WRAP’s re-certification and, most importantly, a statement from Jockey, should settle the uncertainty related to the issue. However, we retain our call on the company being unable to retain market share. Hence, maintain ‘Hold’.

WRAP audited the unit as per its standard procedure in October 2020 and has re-certified the facility to be socially compliant. Jockey also issued a statement in support of Page. Key highlights of the same: Page Industries’ track record and long-standing partnership with Jockey did not match with the allegations published in the report by the Council on Ethics for the Norges Bank pertaining to Page Industries, Unit-3; Page worked transparently with WRAP to conduct the audit and maintain certification for Unit-3. Jockey is pleased to confirm that Page Industries, Unit-3, has been issued its re- certification by WRAP, continuing its long- standing reputation and upholding the highest standard of principles as a responsible, ethical leader in the apparel manufacturing business, providing an employee friendly atmosphere.

The Unit-3 plant has been at the centre of controversy post the findings of Norges Bank’s independent audit and its consequent decision to exit its investment in Page. Page, as per its discussion during the Q2FY21 call, also mentioned it is in touch with Norges Bank for a re-audit.

We believe the re-certification from WRAP and, most importantly, a statement from Jockey should settle the uncertainty related to the issue. Any further update from Norges Bank will be a minor incremental positive. However, we retain our larger call that the company will lose market share (seen in Q2FY21 as well). Hence, we maintain ‘Hold’.

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