Accumulate Mold-tek Packaging Ltd For Target Rs.730 Prabhudas Liladhar Capital Ltd
Healthy guidance, food/pharma to drive growth
We increase our EPS estimates by 0.7%/2.7% for FY27/FY28 driven by: 1) maintained FY27 volume growth guidance of 10–12% despite geopolitical volatility, 2) Lubes seeing some green shoots QoQ 3) higher FY27 EBITDA/kg guidance of Rs43+ (vs. earlier Rs42–43/kg) on a superior product mix, 4) improving capacity utilisation with 70%+ utilisation expected in FY27, and 5) sustained demand in pharma & FMCG along with robust client additions. MTEP reported a beat on our estimates, supported by stronger than expected realisation growth, while EBITDA/kg improved to Rs46.9 (vs. Rs41.9/Rs41.1 in 4Q26/1Q26).
We believe LT drivers for MTEP remain intact, led by 1) rising business from leading paint & FMCG companies along with improving utilization and scale-up in the pharma business, and 2) capacity expansion at Cheyyar and Panipat coupled with increasing demand from ABG, which should drive capacity utilization from FY27 onwards. We estimate a Sales CAGR of 19.6% and EPS CAGR of 30.3% over FY26-FY28. We assign a PE multiple of 18x on Jun’28 EPS, valuing the company at Rs730/share (vs. Rs703 earlier). Retain ‘Accumulate’.
Sales/ Volumes grew 24.9%/6.2 in Q1:
* Revenues grew by 24.9% YoY to Rs3bn (PLe: Rs2.88bn). Volume growth came in at 6.25% (Ple: 7.2%)
* Gross margins contracted by 296bps YoY to 41.3% (Ple: 43%). EBITDA grew by 19.4% YoY to Rs559mn (PLe:Rs534mn); Margins contracted by 86bps YoY to 18.6% (PLe:18.5%)
* Adj PAT grew by 18.5% YoY to Rs256mn (PLe:Rs237mn). EBITDA/Kg came in at Rs46.7 in 1QFY27 vs Rs41.6 in 1QFY26 driven by better utilization & higher contribution from margin accretive Pharma packaging business
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SEBI Registration number is INH000000933
