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Beat On All Fronts; Maintain BUY

Est. Vs. Actual for Q1FY26: Revenue: BEAT; EBITDA: BEAT; PAT: BEAT

Change in Estimates post Q1FY26 FY26E/FY27E:

Revenue: 1%/6%; EBITDA: 4%/8%; PAT: 3%/11%

Recommendation Rationale

• Robust Performance Across Key Segments: The company reported strong volume growth of 15% YoY and 16.9% QoQ, indicating sustained operational momentum across all major business verticals. This performance was underpinned by an optimised product mix and improved capacity utilisation. Notably, the Paint Packs segment was a major growth contributor, registering a robust 28.3% QoQ increase in volumes.

• Paint Segment Regaining Momentum: The paints business delivered a sharp 28% QoQ growth, reflecting healthy market demand and strong customer traction. The segment's growth was primarily driven by ABG, while volumes at Asian Paints remained stable. Looking ahead, the paint business is expected to sustain a similar run rate through the fiscal year, which is a notable positive given the subdued performance in FY25.

• Continued Momentum in Pharma: The pharma division continued its growth momentum in Q1 in line with expectations, reporting sales of Rs 7.42 Cr compared to Rs 6.67 Cr in Q4. Capacity utilisation in the segment now exceeds 50–55%, indicating steady order inflow. For FY26, management has reiterated its revenue guidance of Rs 35 Cr, with peak revenue potential of Rs 50–60 Cr at the current capacity. This segment is also expected to contribute meaningfully to margin expansion.

• Improving Margin Trajectory: EBITDA per kg for the quarter stood at Rs 41.64, in line with company projections. The improvement was driven by enhanced capacity utilisation and increased contribution from the Pharma business. Revenue per kg rose from Rs 198 to Rs 211, led by gains in the Pharma and Food & FMCG segments. Management has reaffirmed its EBITDA/kg target of Rs 42 for FY26, with the potential to surpass the levels.

Sector Outlook: Positive

• Company Outlook & Guidance: The company anticipates an acceleration in volume growth over the next few quarters, supported by commissioning of new capacities and product launches in the F\&F, Paints, and Pharma Packaging divisions. For FY26, a volume growth rate of 12–15% is expected, largely driven by increased contribution from the Pharma and F\&F segments. With a focus on capacity optimisation and an improved product mix, the company remains on track to achieve its target EBITDA per kg of Rs 42 by FY26.

Current Valuation: 23x FY27E (Earlier: 20x FY27E)

Current TP: Rs 850/share (Earlier: Rs 660/share)

Recommendation: We maintain our BUY rating on the stock

Financial Performance: Mold-Tek Packaging's performance beat our estimates on all fronts. During Q1FY26, the company posted a YoY revenue growth of 22% to Rs 241 Cr, driven by strong demand across all segments, against our estimate of Rs 220 Cr. Volumes increased by 15% YoY. The company reported an EBITDA of Rs 47 Cr (up 31% YoY and 22% QoQ), surpassing our estimates of Rs 42 Cr. EBITDA per kg in Q4FY25 improved to Rs 41.64 per kg from Rs 40.15 per kg in Q4FY25. PAT stood at Rs 22 Cr, up 35% YoY and 38% QoQ, beating our estimates by 18%.

Outlook

The company remains confident in sustaining its strong growth momentum in the upcoming quarters. We retain a positive view on Mold-Tek Packaging, supported by accelerating traction in the Pharma segment, steady client additions, and improving margins. Recent capacity expansions are translating into measurable volume growth, while the Pharma division continues to scale up, aided by new client wins expected to drive incremental demand. Furthermore, realisations and EBITDA per kg are projected to improve gradually, backed by a superior product mix and operating leverage.

Valuation & Recommendation

We have revised our FY26 and FY27E estimates upwards and continue to expect strong earnings growth over the next two fiscal years. With an anticipated recovery in the F&F and Paints segments, coupled with the evolving role of Pharma as a long-term growth engine, we now assign a target multiple of 23x FY27E earnings (vs. 20x earlier). This translates into a revised target price of Rs 850/share, implying a potential upside of ~12% from the current market price. Accordingly, we maintain our BUY rating on the stock.

Key Concall Highlights

• Volume Performance by Segment: The company reported a 15% YoY and 16.9% QoQ growth in overall volumes, reflecting strong demand across segments:

? Paint Packs: +28.3% QoQ

? Food & FMCG: +13.6% QoQ

? Pharma: +11.3% QoQ

? Q Pack: +7.8% QoQ

? Lubricants: +7.4% QoQ

• Segment-wise Volume Split (Q1FY26): Paints: 5,600 tonnes, Lubricants: 2,400 tonnes, Q Pack & F&F: 3,200 tonnes, Pharma: 190 tonnes, Total: ~11,400 tonnes • Increased Share of IML and HTL: In Q1, IML and HTL contributed 75% of total volumes. In terms of value, IML accounted for 77% (vs 71% in Q1FY25), highlighting a growing preference for higher-value IML offerings. Management aims to increase the IML revenue contribution to 80% in the medium term.

• Pharma Packaging: The Pharma division reported revenue of Rs 7.42 Cr in Q1FY26, supported by ongoing product development initiatives. The segment continues to gain strong traction among major domestic pharmaceutical companies, with growth expected to remain aligned with management’s guidance. The company has reiterated its FY26 revenue target of \~Rs 35 Cr for the Pharma segment. At the current installed capacity, the business can potentially achieve peak revenues of Rs 60–70 Cr, and with future capacity expansions, this could scale beyond Rs 100 Cr. Increasing acceptance from both Indian and global clients positions the Pharma packaging segment well for sustained growth and a meaningful contribution to overall EBITDA margins.

• Paint Segment: Growth in the Paints segment during the quarter was primarily driven by ABG, while volumes from Asian Paints remained largely stable. The company recorded sales of 5,600 tonnes in Q1, with expectations of maintaining similar volumes in Q2. A seasonal slowdown is anticipated in Q3, followed by a recovery in Q4. Full-year volumes are expected to be in the range of 21,000–22,000 tonnes. The presence of IML infrastructure across all facilities is likely to support volume growth and margin improvement, particularly for key clients like Asian Paints. The Satara plant, which underwent capacity additions, is currently operating at 50–55% utilisation, with a gradual ramp-up expected.

• Q Pack & FMCG: Despite a shorter summer season, the Food & FMCG (F&F) packaging segment recorded a strong 13.6% QoQ growth in volumes during the quarter. This growth was supported by improved service levels and better labour connectivity. Management remains confident in this segment’s performance and is targeting 15–16% growth in F\&F volumes going forward.

• Guidance/Outlook: Management has maintained its EBITDA/kg target of Rs 42 for FY26, with potential for further improvement as utilisation levels rise and the Pharma segment’s contribution increases. For FY26, the company expects volume growth of 12– 15% and revenue growth of 18–20%, supported by traction in Pharma, ongoing momentum in F&F, and new product launches. Total sales volumes are projected at 43,000–45,000 tonnes for the fiscal year. The Pharma revenue guidance of Rs 35–36 Cr remains unchanged, with a high probability of outperformance.

• New Customers: The company continued to expand its customer base by securing orders from several esteemed and fastgrowing companies across key sectors. It added Marico, Hocco Industries, and many others from the Food industry; Veedol Corporation and Variyant Lubricant from the Lubricant industry; and Inventia Healthcare Ltd, AMN Life Science Pvt Ltd, Laurus Labs Limited, Pulse Pharmaceuticals Pvt Ltd, along with several others from the Pharma industry. These additions reflect the company’s strong market presence, product quality, and growing reputation as a trusted packaging partner.

• Dividend: The Board of Directors has declared a final dividend of Rs 2/equity share on the face value of Rs 5/equity share.

Key Risks to Our Estimates and TP

• Slower ramp-up or de-growth in customer industries, more specifically at the clients where Mold-Tek is highly concentrated

• Delay in setting up new facilities/ operational bottlenecks affecting the ROCE.

• Lower volume off-take could have a negative effect on operating leverage.

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