Buy Mold-Tek Packaging, target price Rs 555: Axis Securities

Axis Securities recommends a buy call on Mold-Tek Packaging, citing a target price of Rs 555. The company anticipates improved capacity utilization with new label printing machines and expects significant revenue growth from its high-margin pharma division in the coming years. With increasing pharma contributions and new client acquisitions, Mold-Tek Packaging projects higher volume growth and improved profitability.

Axis Securities has a buy call on Mold-Tek Packaging with a target price of Rs 555. The current market price of Mold-Tek Packaging is Rs 515. Mold-Tek Packaging, incorporated in 1997, is a Small Cap company with a market cap of Rs 1693.

84 crore, operating in the Plastics sector. Mold-Tek Packaging's key products/revenue segments include Plastic & Plastic Products, Other Operating Revenue, Scrap for the year ending 31-Mar-2023. Financials For the quarter ended 31-12-2024, the company has reported a Standalone Total Income of Rs 190.

84 crore, down -.53 % from last quarter Total Income of Rs 191.86 crore and up 15.

30% from last year same quarter Total Income of Rs 165.51 crore. The company has reported net profit after tax of Rs 13.

64 crore in the latest quarter. The company?s top management includes Mr.J Lakshmana Rao, Mr.

A Subramanyam, Mr.P Venkateswara Rao, Mr.Srinivas Madireddy, Dr.

T Venkateswara Rao, Mr.Eswara Rao Immaneni, Mr.Togaru Dhanraj Tirumala Narasimha, Mrs.

Madhuri Venkata Ramani Viswanadham, Mr.Ponnuswamy Ramnath. Company has M Anandam & Co.

as its auditors. As on 31-03-2025, the company has a total of 3 Crore shares outstanding. Investment RationaleThe company recently installed new label printing machines, removing a key constraint, and expects capacity utilisation to improve going forward.

It expects the pharma division to generate Rs 7 crore to Rs 8 crore in revenue for FY25, with a significant increase to Rs 35 Cr in FY26. The long-term target is Rs 60 crore to Rs 65 crore. The pharma products generate significantly higher margins, and the increasing contribution from this segment is likely to drive overall profitability.

The management has guided higher single-digit volume growth in FY25, with double-digit growth anticipated in FY26. EBITDA/Kg is also expected to improve in the coming quarters with a higher contribution from pharma and other high-margin products. The company continues to gain momentum in Pharma and has been adding new clients, which is expected to drive volume growth.

Additionally, they anticipate a steady improvement in realization per kg going forward. Axis Securities recommends a BUY rating on the stock with a target price of Rs 555/share, implying an upside of 10% from the CMP. Promoter/FII Holdings Promoters held 33.

03 per cent stake in the company as of 31-Mar-2025, while FIIs owned 10.96 per cent, DIIs 20.04 per cent.

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