Mold-Tek Packaging shares decline on disappointing Q3 earnings

Shares of Mold-Tek Packaging plummeted on February 7, a day after the company reported a disappointing set of earnings for the quarter ended December.

At 11.53am, shares of Mold-Tek Packaging traded 9.57 percent lower at Rs 960.95 on the National Stock Exchange.

The company's quarterly performance disappointed investors on all three fronts. Revenue from operations fell 3.4 percent on-year to Rs 154.83 crore in October-December on account of a drop in paint volumes.

The operational performance also remained weak as EBIDTA margin contracted 136 basis points to 18.4 percent. One basis point is one-hundredth of a percent. Lower capacity utilization and new project implementations dented margins in Q3.

The weak topline and operational performance also dragged the company's bottomline 2.12 percent on-year to Rs 16.31 crore in the December quarter.

The company, however, remains hopeful that revenue flows from new projects in the next financial year and a pickup in paint and lube volumes due to a seasonally strong quarter will help improve earnings going ahead.

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Brokerage firm Prabhudas Lilladher has downgraded its rating for the stock to 'under review' from 'hold'. Despite the ratings downgrade, the brokerage remains positive on Mold-Tek's long-term story, given its improving utilisation, new plant additions, foray into pharma and over-the-counter medicine business, potential opportunity in exports to the US market and increased growth in the lube segment.

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