Mold Tek Packaging Limited Q3FY17 Concall Summary

Mold Tek Packaging logo

Performance Highlights

Mold Tek Packaging Q3FY17 Financials
  • Many orders being received from paint, lube and dairy industry
  • The sales declined marginally in volume about 2% from 6.01 Cr Q3FY16 to 5.55 CR in Q3FY17. Profits dropped by about 8% from 2.01 Cr against 2.17 Cr last year
  • Demonetization effect was felt in paint and lube segments. Q4FY17 is expected to be better. Demonetization impact on Paint industry which is an end user will be more visible in next quarteR
  • The company sold 4140 tonnes as against 4235 tonnes in Q3 2016. Volume in 9 months FY16 was 12,320 and the same for 9 months FY17 is 14,000
  • Volume growth of 13.54% in terms of sales and 16% in term of production
  • Capacity utilization in first 7 months of FY17 was at 71% with about 14000 tonnes being manufactured

IML vs Non IML Split

Mold Tek Packaging IML vs NOn IML Split

Volume breakup

Q3FY17 vs Q3FY16

Mold Tek Packaging Q3FY17 Volume breakup

9M FY17 vs 9M FY16

Mold Tek PackagingVolume breakup 9MFY17
  • Volume breakup 9M FY17 Vs 9M FY16
  • There is no term debt. Working capital loans is around RS 8 r in Q3FY17 vs Rs 10 Cr in Q3FY16
  • Working capital days are expected to be around 70-75 days in the near future

RAK Plant

  • Growth of light hair oil from Apr -Dec2016 by 2.1%
  • Will start contributing from Q1Fy18 and will achieve breakeven by Q1 or Q2Fy18
  • It is 100% IML pant
  • Will hit Rs 25-30 Cr turnover in first year leading to an increase in IML share by 10%
  • RAK plant has a total capacity of 3000 tonnes. The plant will process 50-60 tonnes in January, 100 tonnes in February and close to 75-80 tonnes in march 2017. Production will be more than 100 tonnes per month from April. So, in FY18 production should hit 2000 tonnes
  • RAK plant is being well appreciated by all customers visiting the facility
  • Factors leading to better profitability at RAK Plant
    • Raw material difference in RAK plant is Rs 15 to Rs 16 per kg
    • The company realizes better pricing
    • There is no income tax on earnings in SEZ


  • Company is now developing product for Mondelez
  • P&G’s Ariel pack has received good response and has led to repeat orders
  • Company is actively pursuing Smithkline Beecham (for Horlicks), Dabur, Patanjali, Levers (for Vaseline), Britannia, ITC and Tatas, Halidrams
  • Negotiations are on with another paint company for 100% IML products. This will require a 3000 tonne facility
  • For RAK Plant, Marmum, Ai Ain and other 3 companies in dairy segment have given clearance. Couple of paint companies have also given clearance
  • Asian Paints contributes 21% to overall revenues but will improve to 30% after doubling of capacity in new plants.
  • In the edible oil segment, Bunge and Kamani has started picking up. ITC Agro tech is also taking small quantities. Company is providing square packs to this segment and expects Rs 6 Cr revenue this year and Rs 10-1 CR revenue from next year
  • The company has given presentation to Patanjali while with Haldiram the company is at finalization stage
  • The company expects to make Rs 25 Cr from Oil marketing companies in next 2-3 years


  • Mysore and Vizag Pants for Asian Paints
    • Will go into production by June 2018 and October 2018 respectively
    • Capex for each plant would be Rs 15 to 18 Cr for first phase of 3000 tonne capacity. Th capacity needs to be doubled in three years so another Rs 10 Cr will be needed in 2021-2022.
    • Company has already spent Rs 6 Cr to buy 5 acres of Land in Mysore and 3 acres of land in Vizag. Construction activity will commence from June-July 2017
    • Another Rs 24 Cr to 26 CR will be invested in next financial year.
  • Capex in first 9 months of FY 17 has been Rs 22 CR which includes capex for RAK plant. The capex is mostly through internal accruals
  • Capex for FY 17 is expected to be around Rs 31 Cr. Cash flows net of dividend are expected to be Rs 25 Cr. Cash flows from Apr-Oct 2017 will be around Rs 14-15 Cr. No increase in debt levels expected to fund capex requirements
  • Capex guidance doesn’t include investment needed for another 3000 tonne for the other paint company that MTPL is in talks with
  • In Q4FY17, company is expanding its facility in Hyderabad for Cadbury and shifting of tool room building is still being completed. This will require Rs 3 to 4 Cr. This includes Rs 2 Cr for bringing in new machines
  • Total capex in Fy17 will be around Rs 26 to Rs 27 Cr
  • Company’s capacity post FY17 will be around 31000 to 32000 tonnes  

New Technology

  • New technology on oxygen barrier IML is on the back burner now.

Market Share

  • Paint and lube segment: MTPL has a market share of 20% in the organized market. Company’s turnover is Rs 300 CR, organized market Rs 1500 Cr and unorganized market is around Rs 600 Cr. Total target market is thus Rs 2100 Cr
  • Food and FMCG segment: Total addressable market is Rs 2000 to 3000 Cr. MTPL’s turnover this year is just Rs 17 CR and will hit Rs 24 Cr next year.
  • Client wise Market Share
Client wise market Share



  • Couple of players in IML like one in Gujarat and one in Delhi. They are with 2-3 robots and 5-6 standard moulds.
  • Main competitor in Paints segment is Hitech plast with revenues of around Rs 460 Cr
  • Other players are Jolly Plastics with about Rs 20 CR turnover and another unlisted company with Rs 180 CR turnover. Couple of other players are in the range of Rs. 70-100 Cr. About 5 to 10 players are in the region of Rs 50-60 Cr
  • The company has a cost advantage because it is vertically integrated with its own robots. The company has close to 45 robots

GST Impact

  • Company is sanguine about GST as it will provide a level playing field in different states


  • Raw material cost had gone up from 71 to 88 in Q2FY17. It now stands at 91
  • Other expenses have grown impacting EBITDA per kilo.  

EBITDA Margins

  • EBITDA per kilo is down from Rs 27 to Rs 23 due to higher other expenses
  • Rise in raw material cost is not expected to impact EBITDA margins
  • Margins in FMCG business is 22-25%. Blended margins will be around 14-15% in FY17. It will improve by 0.6% to 0.7% next year
  • Company is aiming for EBITDA of Rs 29 per kilo for FY18. 9 month FY17 EBITDA per kilo stands at Rs 27.8
  • EBITDA per kg inspected to be around at RAK will be around 38 per kg

 Revenue Guidance

  • Company is expected to clock 5-8% growth in terms of volumes in Q417. Overall growth in FY17 will be 12%
  • RAK plant will give additional Rs 25-30 Cr n FY 18
  • Asian Paints business
    • Mysore plant will run for 6 months and Vizag plant for 2 months.  This gives an average 3-4 months’ production for these two plants. Each pant is 3000 tonnes, so 2000 tonnes of additional production will happen in Fy18. Assuming 1000 tonnes of production, it is an increase of 4-5% from Asian Paints
    • The production will hit 6000 tonnes in FY19
    • Asian paints has promised to double intake from FY22 so production will hit 12 tonnes
    • This translates into a growth of 20-25%
    • Revenue generation at full capacity of 6000 tonnes is Rs 180 per kg or Rs 180,000 lakh x 60 = Rs 120 Cr
  • Revenue mix Guidance for FY18
Mold Tek revenue Mix Guidance for FY18