Mold-Tek Packaging Q3 Review - Strong Volumes Ahead With Recovery In Paints; Revise To Buy: Axis Securities

Axis Securities Report

Mold-Tek Packaging Ltd.'s Q3 FY24 numbers missed our estimates on all fronts as lower volumes led to an operational miss.

The company reported revenue of Rs 165.5 crore (up7%/ down 3% YoY/QoQ), missing our estimates by 6%. Ebitda came in at Rs 30 crore (up 7%/ down 6% YoY/QoQ), and missed our estimates by 11%.

Mold-Tek Packaging profit after tax stood at Rs 14 crore, down 13%/10% YoY/QoQ due to higher depreciation and higher Finance cost. This was on account of a set of new facilities which are to added.

Valuation & Recommendation:

We have marginally revised FY25/26E estimates upwards to account for the growth revival, we roll forward our estimated to of 28 times September 26E on account of stable future growth levers which bring us to revise our our 'Hold' call rating on the stock to 'Buy' with a revised target price is Rs 1030/share, which implies an upside of 18% from the current market price.

Key risks to our estimates and TP

Slower ramp-up or de-growth in customer industries as the company has strong client concentration.

Delay in setting up new facilities affecting the return on capital employed

Lower volume off-take could have a negative effect onoperational leverage.

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