Fundamental Analysis Of Mold-Tek Packaging: If we see a normal plastic airtight bag of chips on one side and a colorful wrapper of the same chips on the other side, we will be more inclined towards the colorful packet of chips to consider for a purchase.
This brings me to mention a psychological aspect of a consumer’s decision-making process. The products, along with being of good quality, are also required to be presented for sale with attractive packaging attributes.
Herein this article we will be performing a fundamental analysis of Mold-Tek Packaging Limited, performing the ratio analysis, and having a look at the future plans of the company.
Company Overview
Mold-Tek Packaging Limited (MTPL), established in 1986, is the leader in rigid plastic packaging in India. The company is involved in the manufacturing process of injection molded containers for lubes, paints, food, and other products.
MTPL has seven processing plants and three stock points which are spread across the country in order to ensure faster supplies. With a huge injection molding capacity of around 20,000 TPA, the company is a pioneer and innovator of pail packaging in India.
They have introduced spouts and In-Mold spout concepts for the paint and lube pails. With a self-sufficient in-house manufacturing capability in place, the company is not dependent on imports. Prevailing as a market leader in the Indian plastic packaging industry is a result of various competitive advantages the company enjoys.
Industry Overview
Packaging is one of the fastest-growing sectors in India. The demand for packaging in the country has seen a drastic uptrend spurred by the rapid growth in consumer markets, especially in processed food, personal care, and pharmaceutical end-user industries.
Over the past couple of years, the industry has proved to be a key driver of technology and innovation. Due to the above-mentioned fact, the industry is making contributions towards various manufacturing sectors including agriculture and the fast-moving consumer goods (FMCG) sectors.
The Indian packaging market is expected to witness growth at a CAGR of around 12.50% during the forecast period (2022 – 2027). Factors such as rising population, increasing income levels, and changing lifestyles are anticipated to drive consumption across various industries which lead to higher demand for packaging product solutions.
Mold-Tek Packaging – Financials
After getting well-versed in the company profile and the outlook of its sector, let us have a quick glance at the financials which are listed below.
Revenue & Net Profit Growth
| Fiscal Year | Operating Revenue | Net Profit |
| 2022 | 631 | 64 |
| 2021 | 479 | 48 |
| 2020 | 438 | 37 |
| 2019 | 406 | 32 |
| 2018 | 347 | 28 |
Over the past five financial years, the revenues of the company have witnessed consistent growth in numbers. Due to the increased sales and efficient management with respect to the interest costs, the net profit figures also rallied over the years.
Operating & Net Profit Margins
| Fiscal Year | OPM | NPM |
| 2022 | 15.17 | 10.08 |
| 2021 | 15.42 | 10.01 |
| 2020 | 13.40 | 8.54 |
| 2019 | 13.64 | 7.86 |
| 2018 | 14.22 | 8.02 |
The margin ratios of the company were also on the rise, especially in the last couple of years mainly due to sound cost management techniques and increasing revenues from operations.
Return Ratios: RoE & RoCE
| Fiscal Year | ROE | ROCE |
| 2022 | 13.92 | 19.11 |
| 2021 | 18.73 | 25.63 |
| 2020 | 18.96 | 24.78 |
| 2019 | 16.65 | 24.50 |
| 2018 | 16.01 | 25.30 |
Both the return ratios witnessed an uptrend during the early stage years but eventually failed to keep up with the same in the latest financial year supported by a fall in FY21-22.
Debt / Equity & Interest Coverage
| Fiscal Year | Debt/Equity | Interest Coverage |
| 2022 | 0.10 | 13.11 |
| 2021 | 0.39 | 9.59 |
| 2020 | 0.54 | 5.65 |
| 2019 | 0.54 | 7.31 |
| 2018 | 0.55 | 10.65 |
The debt-to-equity ratio of the company, exhibiting a positive outlook, improved over the years with a decent amount of reduction in numbers. In addition to that, the interest coverage ratio also increased in FY21-22 after seeing a continuous dip for four financial years.
Future Plans Of Mold-Tek Packaging
Along with the existing product range offered, the company is planning a capex of Rs 125 crores in FY22-23. Let’s look at what new additions the company has to include in its product portfolio.
- Expansion of footprint into new segments like restaurant packs, sweet packs, fertilizers, seeds, etc. Some of the products mentioned will be driving the growth of the company over the next 2-3 years.
- Introduction of new pails for the DEF market (Diesel Exhaust Fluid) in the country. It has grabbed a major portion of orders from the topmost lubricant industries having a sizable growth.
- Plans to launch a new range of products in Confectionary Containers for sweet packs, restaurant packs, and online food delivery expecting a healthy adoption in the next couple of years.
Also Read – Fundamental Analysis Of TCPL Packaging
Key Metrics Of Mold-Tek Packaging
| CMP | ₹ 901.85 | Market Cap (Cr.) | ₹ 2,990 |
| EPS | ₹ 22.54 | Stock P/E | 40.01 |
| RoCE | 19.11% | RoE | 13.92% |
| Promoter Holding | 34.01% | Book Value | ₹ 148 |
| Debt to Equity | 0.10 | Price to Book Value | 6.82 |
| Net Profit Margin | 10.08% | Operating Profit Margin | 15.17% |
With a market capitalization of Rs 2,990 crores, the company forms a part of the small-cap entities in the country. The company has seen a consistent reduction in the past three quarters as far as promoter shareholding is concerned. There is a reflection of growing operations with effective management while comparing the stock PE of 40.01 with the sector PE of 30.86.
In Conclusion
That is all from my end on the fundamental analysis of Mold-Tek Packaging Limited. In the article, we equipped ourselves with the background of the company and listed all the relevant ratios along with the analysis of the trend represented by them. I hope you were able to pick some good observations and found the article helpful. Happy investing!
Will the packaging industry emerge the way it is expected to be and the company achieve all the planned activities for the forthcoming years? How about we discuss the same in the comments section?
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