Prabhudas Lilladher's research report on Mold-tek Packaging
MTEP’s 1Q results were a miss due to expenses related to new units and tepid growth in Paints and Lubes segment. EBIDTA/kg at Rs36.2 was down both QoQ and YoY basis. However we believe that worst seems over and MTEP is on the verge of acceleration in growth led by 1) Higher throughput in paints segment from scalability with Birla Opus 2) sales of high margin (>Rs100/kg) Pharma segment to increase from current Rs8mn in 1Q to Rs50mn/quarter in 2H and significant growth in FY26 3) strong momentum in Foods & FMCG led by entry in new segments and new product launches by FMCG companies. MTEP expects FY25 volumes to grow in mid- teens led by high-single digit growth in paints & Lubes, pick up in F&F segment and anticipated success in pharma sector post 2HFY25. We cut our FY25/FY26 estimates by 16%/7.8% given slowdown in 1H & impact of higher overheads for new plants.
Outlook
We are increasing our target price to Rs853 (Rs843 earlier) as we value the stock at 28xJune 26 EPS (27xFY26 earlier). We expect gradual recovery in growth rates and recommend accumulating the stock for medium term gains.
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