PL First Cut - Mold Tek Packaging 2QFY24

PL First Cut – Mold Tek Packaging 2QFY24 – Amnish Aggarwal – Head of Research, Prabhudas Lilladher Pvt Ltd

Mold Tek Packaging 2QFY24: Miss on all fronts

(CMP: Rs 916|Hold)

Financial Performance:

> Revenues declined by 6.7% YoY to Rs1.7bn (PLe: Rs1.9bn)

> Overall volumes up by 5%

> Gross margins expanded by 200bps YoY to 42.9% (Ple: 42.5%)

> EBITDA declined by 5.6% YoY to Rs321mn (PLe: Rs361mn); Margins expanded by 21bps YoY to 18.9% (PLe:19.2%)

> Adj PAT declined by 19.2% YoY to Rs157mn (PLe: Rs189mn)

Other Updates:

> Sultanpur-Hyderabad Block-A for Pharma and Block-C for integrated printing facility will be ready by December,2023

> ABG at Panipat and Cheyyur are expected to start commercial production by Q4FY24

> Company received patent for square packs and is taking steps to prevent duplicators from manufacturing this product

> Company started Food and FMCG products manufacturing. However, the pharma division will start operations around December, 2023

> During Current year company Is planning to spend RS.1200mn on ABG plants at Panipat, Cheyyar and Mahad , integrated printing facility and Pharma division at Sultanpur

> Company bagged new orders from Mahalasa Exports, Shri Sai Enterprises, Ushodaya, & A S Trading

View:

MTEP reported a miss on all fronts led by lower volumes vs our estimates. However, new facilities continue to be added to meet future demand with ABG plant and integrated printing facility to start giving results by FY25 onwards. Co continues to win orders from new clients which will help to generate demand going ahead. Margin are expected to expand further led by stabilizing RM prices. We have a Hold rating on the stock

The stock trades at 32x FY25 EPS.