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Systematix
Mold-Tek Packaging (Accumulate)
CMP: ₹219.90
Target: ₹245
Mold-Tek Packaging’s revenue stood at ₹67.7 crore, flat y-o-y and down 20 per cent q-o-q (below estimate by 5 per cent), due to 14 per cent y-o-y decline in paint volume, while FMCG volume increased by 30 per cent y-o-y, mainly due to a lower base and new clients addition.
Overall volumes declined y-o-y by 2 per cent to 4,140 tonne, while EBITDA stood at ₹10.2 crore, down 12/20 per cent y-o-y/q-o-q due to higher staff cost (up 9 per cent y-o-y) and other expenses (up 9 per cent y-o-y). OPM was down y-o-y by 190bps to 13.5 per cent (below estimate by 130 bps) and EBITDA/tonne declined by 3 per cent y-o-y to ₹24,373. Profit stood at ₹5.6 crore, down 8/16 per cent y-o-y/q-o-q (below estimate by 7 per cent). NPM was down by 60 bps to 7.3 per cent, while depreciation and interest have grown y-o-y by 14 per cent and 105 per cent respectively.
View: Apart from the quarter’s hiccups due to demonetisation, our expectation on MTEP’s volume growth of 15-20 per cent for the next few quarters remains strong. Management’s strong volume guidance of 15-18 per cent for FY17/18, increased business from IML and high-margin (20-22 per cent) FMCG/food segment reiterate our positive view on MTEP. We maintain an Accumulate rating, with a target price of ₹245, valued at 17x average EPS for FY18e and FY19e.
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