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  • 07 Nov 2022
  • ICICIdirect Research

FMCG & LUBES SEGMENT DROVE Q2 REVENUE

MOLDTKPAC - 702 Change: -35.30 (-4.79 %)

News:

Mold Tek Packaging reported a consolidated revenue growth of 14% YoY to Rs 183 crore in Q2FY23 even on a higher base of Q2FY22 (revenues were up by 34%). Company reported volume growth 9% YoY led by FMCG and Lubes segments volume growth of 40% and 27% respectively. We believe, segment volume growth is attributable to wallet share gains, customer addition and launch of new products in FMCG & Lubes businesses. On the paint segment company reported muted volume offtake amid extended monsoon

  • On a three-year basis, revenues grew at CAGR of 17% led by 10% volume growth
  • Gross margin up by 292 bps QoQ (flat on a YoY basis) supported by price hikes. However, EBITDA margin expansion was restricted at 80 bps QoQ to 18.7% led by higher employee costs and other expenses
  • The PAT came in at Rs 19.4 crore up by 10% YoY (23% three year CAGR) mainly led by higher growth in topline
 

View:

 Mold-Tek Packaging has reported a good performance in Q2FY23 given the high base of last year and muted offtake in paint segments. On the margin front, EBITDA margin at 18.7% is higher than its pre covid level margin range of 17-18% mainly due to positive operating leverage in the FMCG & Lubes segments. However, the EBITDA margin is still lower than management guidance of 21-22%. Company has added new clients in the current quarter and also gained wallet market share of existing customers in the FMCG & Lubes business. Further company envisages capex plan of Rs 125 crore in FY23 to boost its manufacturing capacity. While we maintain our positive stance on the company we await management commentary on future margin guidance. The detailed report will be released post the conference call.
 

Impact:

Positive