Mold-Tek Packaging is poised for PER re-rating & is a buy for target price of ₹906 says IDBI Capital

[Pee Vee]

Mold-tek Packaging’s (MPL) Q1FY26 result was ahead our and consensus estimates on key parameters. After a muted performance in FY25, the company had a strong come back in FY26 with a robust quarterly performance, despite a marginal de-growth in lubricants segment and lower utilization in Satara plant. The management has guided volume growth at 12-15% and net sales increase by 18-19% for FY26. Total capacity is expected to hit 70,000MT from current capacity of 63,000MT. MPL added Hocco Industries, Veedol Corporation, Variyant Lubricant, Laurus Labs and various other prominent names as its customer during Q1FY26. We have marginally increased our earnings estimates for FY26E/FY27E. We believe MPL is poised for PER re-rating post robust earnings growth for consecutive quarters and promising outlook by the management. Maintain BUY with a TP of Rs906 (earlier Rs715), assigning 25x PER on FY27E.

Key Highlights and Investment Rationale

 Good show on operational parameters: MPL reported healthy 15% YoY sales volume growth at 11,378MT. Further, NSR improved by 6.3% YoY Rs211/Kg. Net sales was up by 22.3% YoY to Rs2,406mn, while EBITDA came in at Rs468mn, up by 31% YoY. EBITDA margin expanded by 129bps over Q1FY25 to 19.4%. The company reported net profit of Rs216mn, higher by 30.5% YoY. In volume terms IML/Non-IML mix was at 75%/25%. Revenue from the Paints segment stood at Rs1050mn led by volume growth of 21.4% YoY at 5,593MT. The management cited the significant improvement in Paints segment due to incremental volume from Aditya Birla Group.

 Encouraging revival in earnings, BUY with a TP of Rs906: After a subdued performance in last few quarters, MPL has come back stronger and registered healthy volume growth. We maintain positive outlook on the company and believe continued focus on capacity expansion, foray into high margin Pharma segment would pave the way for future earnings growth. BUY with a TP of Rs906.