Hold Mold-tek Packaging; target of Rs 918: Prabhudas Lilladher

Prabhudas Lilladher's research report on Mold-tek Packaging

We are cutting our FY24/25 EPS estimates by 17.1%/9.4% and target price to Rs918 (Rs956 earlier) as we reduce volumes & EBITDA/Kg estimates (Rs37/41 per kg) given mixed outlook in near term. MTEP’s 2Q volumes were impacted due to 1) impact of rainfall on ice cream & dairy segment and 2) lower realizations due to softer RM and 3) late festival season impact on paints industry. MTEP expects 2H24 volumes to grow in mid- teens led by close to double digit growth in paints industry, high single digit growth in Lubes, pick up in F&F segment and benefits of pharma entry and supply to ABG group in Paints. MTEP’s long term prospects remain promising given 1) new units in Panipat & Cheyyar (4000 ton capacity) for supply to Grasim by FY25 2) Start of pharma division by Q4 with superior mix 3) mix improvement with higher growth in F&F segment with sultanpur plant commencing operations. 4) addition of new customer/orders.

Outlook

We estimate 15.7% decline in EPS in FY24 but 35% CAGR over FY24-26. MTEP is currently trading at 32.2x FY25EPS which limits scope for further re-rating. Retain ‘Hold’.