How Mold-Tek Packaging is Set to Achieve Double-Digit Growth in the Next 2 Years

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Why You Should Invest in Mold-Tek Packaging

Mold-Tek Packaging is one of the leading plastic packaging companies in India, offering innovative solutions for various industries such as paints, lubes, food, FMCG, and bulk packaging. The company has a strong presence across India with 10 ISO-certified plants and a huge injection molding capacity of around 45000 TPA. The company has also introduced several revolutionary products in the market, such as in-mold labeling (IML) containers, square packs, edible oil packs, and ice cream packs.

Strong Growth Prospects

Mold-Tek Packaging has been witnessing robust growth in its sales volume and revenue, driven by its diversified product portfolio, expanding customer base, and increasing market share. The company reported an 8% year-on-year and 20% quarter-on-quarter growth in its sales volume at 9,053 million tonnes in Q4 FY22. The company also posted a 10.85% year-on-year increase in its consolidated total income at Rs 178.98 crore in Q4 FY22.

The company expects to maintain its growth momentum in the coming years, as it plans to add new capacities and launch new products in various segments. The management has guided for 15-20% volume growth over FY23-25, which is much higher than the historical volume CAGR of 10% over FY16-22. The company also aims to increase its EBITDA per kg from Rs 41 in FY22 to Rs 44 in FY24, by focusing on technologically advanced and niche products such as IML packaging.

Attractive Valuations

Mold-Tek Packaging is currently trading at a reasonable valuation, compared to its peers and the industry average. The company has a TTM EPS of Rs 24.25, which represents a 19.07% year-on-year growth. The company has a TTM PE of 40.84, which is lower than the sector PE of 36.25. The company also has a P/B ratio of 7.49, which indicates a high return on equity.

The company’s stock price has appreciated by 12.44% in the last year, reaching Rs 994 on June 7, 2023. However, it is still 29.75% away from its 52-week high of Rs 1,110, which suggests that there is room for further upside potential. Several brokerage houses have given positive recommendations and target prices for Mold-Tek Packaging, ranging from Rs 830 to Rs 1,014, implying an average upside of 13% from the current level.

Conclusion

Mold-Tek Packaging is a well-established and fast-growing plastic packaging company that offers a wide range of products and services for various industries. The company has a strong track record of innovation, quality, and customer satisfaction. The company has also been delivering consistent growth in its sales volume, revenue, and profitability, and expects to sustain its performance in the future. The company’s stock price is trading at an attractive valuation, with a significant upside potential based on the analysts’ estimates. Therefore, Mold-Tek Packaging is a good investment option for long-term investors who are looking for exposure to the plastic packaging industry.

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