Prabhudas Lilladher's research report on Mold-tek Packaging
Moldtek remains a formidable play on growth in paints, FMCG and Pharma segments on the back of improved revenue visibility and new product acceptance. We remain structurally positive on MTEP’s long term story given 1) improving utilization levels at current plants and EBITDA/Kg driven by mix shifting towards F&F segment 2) New plant added at Lucknow and Daman addition of capacity in Mysore & Visakhapatnam will help meet demand from Asian Paints. 3) foray into Pharma & OTC business 4) Potential opportunity in exports to US market 5) Product acceptance from new lube brands Gulf Oil, Bharat Shell, Valvoline and ExxonMobil 6) increased contribution from Thin Wall, F&F segment and acceptance of new launches like QR coded IML products to help increase market share from new and existing clients.
Outlook
With strong focus on technologically advanced niche products, we expect EBITDA per/kg to increase from Rs 41 in FY22 to Rs 44 in FY24. We estimate Sales and PAT CAGR of 21.8%/36.2% over FY22-24 and change our rating to ACCUMULATE with target price of Rs830 (21xJun24 EPS) from Rs781 (21xMar24 EPS). MTEP is currently trading at 20.5x FY24EPS which makes a good proxy play on Paint & FMCG segments with steep valuation discount.
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