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Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd.
Growing with technology…… February 10, 2016
BUY
Analyst Omkar Tanksale
+91-22- 6614 2692 [email protected] Institutional Research 1
Initiating Coverage
CMP (`) Target (`)
271 352
Potential Upside Absolute Rating
29% BUY
Market Info (as on February 09, 2016)
BSE Sensex 24,020
Nifty S&P 7,298
Stock Detail
BSE Group B
BSE Code 533080
NSE Code MOLDTKPAC
Bloomberg Code MTEP IN
Market Cap (`bn) 3.73
Free Float (%) 65%
52wk Hi/Lo 333 / 165
Avg. Daily Volume (NSE) 21415
Face Value / Div. per share (`) 10.00 / 2.00
Shares Outstanding (mn) 13.8
Shareholding Pattern (in %)
Promoters Public
33.91 66.09
Financial Snapshot (`mn)
Y/E Mar FY14 FY15 FY16E FY17E
Net Sales 2,537 2,851 2,993 3,591
EBITDA 293 399 509 610
PAT 88 169 248 319
EPS 6.39 12.26 17.95 23.10
ROE (%) 17% 15% 20% 22%
ROCE (%) 44% 28% 34% 37%
P/E 6.26 3.26 2.23 1.73
EV/EBITDA 2.73 1.78 1.37 1.18 Share Price Performance
Rel. Perf. 1Mth 3 Mths 6Mths 1Yr
Mold-Tek (%) (9.2) 21.4 15.2 23.0
Sensex (%) (2.6) (7.0) (13.6) (14.0)
Source: Company data, Institutional Research
Company Snapshot
Mold-Tek Packaging Limited (MTPL) is the leader in rigid plastic packaging in India. It is involved
in the manufacturing of injection molded containers for Lubes, Paints, Food, FMCG and other industries. It is the leader in rigid plastic Packaging in India with 20% market share. It has
introduced spouts and IN-Mold spouts concepts for the paint and lube pails. MTPL is pioneer in
the field of IN-Mold label decoration in India. Company has seven manufacturing units in India
and recently set up a plant in RAK, UAE thus taking the total capacity to 32,000 tonnes by June 2016.
Investment Rationale
India’s plastic packaging industry to touch $73 bn by FY20E
According to a joint report by FICCI and Tata strategic management group on plastic industry,
India’s plastic packaging industry is expected to grow at 18% CAGR to $73 bn by FY20E. The per capita packaging consumption in India is quite low at 4.3kg compared to 42kg and 19kg
consumed in countries like Germany and Taiwan respectively. India is a growing market for
plastics and consumes about 12.8 mn tonnes of plastics annually against the global consumption of 285 mn tonnes per year.
Massive Opportunity in the Edible Oil Segment
Company has recently entered into the Edible Oil segment with 5 ltr and 15 ltr packs. All the leading brands like Godavat, Healthy Hearts, Saraiwala Oils and ConAgra foods have given full
commercial orders from recent quarters after having satisfactory response from the trial orders.
Edible Oil segment is a massive `10bn to `12 bn industry with 5 ltr and 15 ltr packs put
together. Recent correction in crude oil prices has narrowed the gap between the tin and the plastic containers.
RAK plant and Indian plants expansion will take Capacity to 32,000 tonnes by June 2016E Company has recently expanded its capacities across all the Indian plants from 22,000 tonnes in
FY15 to 29,000 tonnes by Mar 2016. Also recently company has set up a 3,000 tonne capacity in
RAK, UAE to tap the export market. All the licenses and necessary approvals from the UAE authorities have been achieved. The capacity will be on stream by June 2016.
Valuation
At the CMP of `271, MTPL is trading at 15.3x, and 11.8x its FY16E, and FY17E EPS of `17.9 and
`23.1. Compared to its peers; MTPL is trading at a discount P/E multiple, although its margins
are better than or comparable to peers. We initiate coverage on MTPL with a BUY rating and
attach a multiple of 15.2 xs to MTPL’ FY17E earnings (EPS) to arrive at the target price of `352,
indicating a potential upside of 28.6%.
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Mold-Tek Packaging Ltd BSE SENSEX
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 2
Index & Content
Sr. No. Topic Page No.
1 Company Background......................................... 3
2 Key Management Personnel.................................. 4
3 Business Model.................................. 5
4 Investment Rationale......................................... 7
5 Financial Overview........................................... 11
6 Key Risks........................................................ 14
7 SWOT Analysis.................................................. 14
9 Valuation & Outlook........................................... 15
10 Financials........................................................ 16
11 Disclaimer....................................................... 17
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 3
Company Background
Established in 1986, Mold-Tek Packaging Limited (MTPL) is the leader in rigid plastic packaging in India. Mold-Tek Packaging Limited is involved in the manufacturing of injection molded
containers for lubes, paints, food and other products.
MTPL has seven processing plants and three stock points spread across India to ensure faster
supplies. It has a huge injection molding capacity of around 20000 TPA. As a pioneer and innovator of pail packaging in India - Mold-Tek has introduced spouts and In-Mold spout concepts
for the paint and lube pails. With in-house manufacturing capability in place, they are not
dependant on imports. MTPL uses hot runners and Beryllium - Copper inserts to make world class molds at a fraction of costs. This enables them to innovate and manufacture products with
better features making them stand above all competitors. MTPL also have more than 70
Injection Molding machinery up to 650 ton including Cincinnati, Engel, Demag, Krauss-Maffei,
and Niigata.
MTPL is the pioneers in the field of In-Mold label decoration in India. Their position as market leaders in Indian plastic packaging industry is a result of various competitive advantages.
The company also has in house packaging and labeling facility which also gives edge over the other peer companies. The company has different technologies like In mold labeling (IML), Heat
transfer labeling, sleeving and screen printing. These technologies have different use as per the
client requirement. These in house technologies also made MTPL efficient. MTPL also has strong
innovation which makes more robust business structure so protecting the contents of a packaged product has become the need of the hour. At MTPL, they ensure that our packs are protected
from counterfeiting using our advanced technologies.
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 4
Key Management Personnel
MTPL is blessed with credible management that takes MTPL on the path of the growth.
Management
Janumahanti Lakshmana Rao is the Chairman and Managing Director of the Company. He holds
a bachelor’s degree in civil engineering from Sri Venkateswara University, Tirupati, Andhra Pradesh. He also holds a post graduate diploma in management from Indian Institute of
Management, Bangalore, specializing in marketing and finance areas.
A Subramanyam, Deputy Managing Director of the company holds a bachelor’s degree from Regional Engineering College, Suratkal.
P. Venkateswara Rao holds a PG Diploma in Material Management. He is the Deputy Managing Director at Mold-Tek.
Seshu Kumari is the Financial Controller at Mold-Tek. She has over 25 years of experience in Financial and Accounting matters.
M Srinivas is the Chief General Manager and manages all seven manufacturing plants. With over
25 years of association with Mold-Tek packaging limited, he handles the Planning, Production,
Maintenance, Delivery and Product Development.
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 5
Business Model
Mold Tek Packaging operates under for business verticals such as Lube Packaging, paint
packaging, Food packaging and Bulk packaging.
The Lube packaging industry
MTPL is involved in the manufacturing of injection-molded containers for lubes. These
containers are completely leak proof since they are made as a single unit. These lubes are tamper evident due to our patented locking system.
The Paint packaging industry They have extremely attractive aesthetics with exquisite decoration to project the product. Due
to compact size and mold design, these containers are easy to store and stack. There are also
many end user benefits because of secondary uses of pails and plastic containers. Mold-Tek is India’s leading packaging specialist for paints. Their outstandingly wide range
includes numerous sizes in all shapes. Mold-Tek’s containers are stackable, rest securely on the
pallet and can be used in a shaker.
Be it classic oval, rectangular or square in shape: The broad front of MTPL’s paint buckets
provides the perfect advertising space. MTPL’s decoration processes such as In Mold Labeling
will improve client's brand recall value and have a positive effect on sales. These pails are provided with tamper proof lids so as to ensure complete safety against adulteration. The
plastic pails are available as straight walled and tapered wall in industrial and food grade
quality. Numerous optional accessories, such as paint roller screens, tinting plugs and recessed
lids – for example, to accommodate a sponge – make your product even more attractive for the consumer. Promotion covers increase the success of sales campaigns
The Food packaging industry
MTPL has latest technology and experience in manufacturing food packaging for automatic
filling. Their packaging program for food covers all volumes and satisfies the wishes of both bulk
consumers and end consumers. All Mold-Tek plants comply with a strict quality and hygiene management system that is monitored and evaluated by independent auditors. Mold-Tek is ISO
9001:2008 and ISO 22000:2005 Standards certified company.
Ice Cream
MTPL ice cream packs have photo-realistic labels on the lid and container walls that promise a
lavish ice cream experience. Optional transparent material reveals the delicious contents inside
the container. MTPL offer various highly convenient shapes and sizes for ice cream with an eye-catching appearance through IML technology. They are naturally suitable for the freezer and
have a good impact resistance.
Drink Powders
In terms of decoration, Mold-Tek’s capability to execute the in mold labeling process allows a
spectacular visual brand presentation. In the re-closable roto lock packaging, powders of any type stays fresh and clean longer. They cannot break, be dented or rust. They can be stacked
for transport and are quiet in the production run.
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 6
Dairy Products MTPL has been an expert partner of the dairy industry by serving clients like Amul and Mother
Dairy. Every day we supply thousands of containers to dairies across India. Both end consumers
and downstream users use their buckets and tubs for dairy produce. Tamper-evident closures
and sealing options provide the product with additional protection. All these features along with the IML decoration make the packaging extremely attractive.
Bulk packaging MTPL also provides Bulk containers for bulk drugs, chemicals and food. The range of products
comes in various shapes for their clients to choose from.
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 7
Investment Rationale Strong Technology and Innovation gives edge to MTPL over other packaging companies
Technology
1. In Mold Labeling - IML
MTPL is the only company in India which is having completely integrated facilities ranging from label making, mold adaptation to making in house robots.
Mold-Tek Packaging Limited introduced IML decorated packaging for the first time in India. IML uses Robots that place preprinted labels in the molds before molding the plastic flow into the mold below the label thereby fusing the label while molding itself. The technique produces
outstanding picture quality and everlasting decoration that cannot be removed.
In an ever growing sector like packaging, IML decoration would be the first choice to project the brand image of products. IML decorated thin wall containers are suitable for storage conditions,
deep freezing, and microwave and are used for food and FMCG products world over.
Advantages of IML
IML offers outstanding quality decoration, and picture quality. Photographic quality and complete container coverage. Label becomes an integral part of the pail and offers a no-label
look with high scratch resistance.
• IML operations are hands free as all handling is done by ROBOTS. Packaging is hygienic and suitable for D2F (Direct to fill) operations.
• Improves barrier properties -helps extend the shelf life of the filled goods.
• Label has better heat, moisture and chemical resistance than other types of decoration.
• Affordability – eliminates costly and messy secondary processes.
Integrated & Cost effective IML solutions from Mold-Tek
Mold-Tek has set up in house robot manufacturing, mold and label manufacturing and die-cutting machines to enable quick production of IML containers. This gives Mold-Tek flexibility
and complete cost control.
• Lower prices for IML decoration complying with international standards;
• Quick delivery, customizability and maintenance;
• No dependency on imports- in-house labels, robots & mold manufacture and maintenance.
2. Heat Transfer Labeling
Heat transfer labeling is a process where the design is printed on the release layer of a label. Upon application of heat, it is transferred on to the container.
Advantages of Heat Transfer Labeling
• Post molding operation involves different machines
• Heat Transfer labeling gives 80% coverage of print on the product
Mold-Tek has in-house heat transfer labeling facilities and also label printing facilities.
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 8
3. Shrink Sleeving
Shrink sleeving is a technique where the label is slipped onto the container and upon heating; the label shrinks and fits the container snugly. The aesthetics and picture resolutions are better
than screen printing. Shrink sleeves have a maximum decoration area that wraps around an entire product. Mold-Tek has in-house capability to manufacture shrink sleeves and offers the
best decoration that caters to clients’ needs and budgets.
Advantages of Shrink sleeves
• Durability: Shrink sleeve labels are reverse printed on transparent shrink film, sealing the inks safely. This protects the graphics from the marring and tearing.
• Visual Branding: Shrink sleeves can be custom printed with full color photographic images that wrap 360 degrees around the entire container. Unlike conventional labels, there are no space limitations and shrink sleeve labels allow for better innovation in presenting brand
identity, specialty promotions and product information.
• Tamper Free: Shrink sleeves also provide tamper free evidence by protecting lids and tops. A full body shrink sleeve can perform as a tamper evident security seal on a product
container.
4. Screen Printing
Screen printing is a process where ink is squeezed through exposed screen to the surface of the product. Screen printing is very economical when compared to other decoration options. Mold-
Tek has automatic screen printing which ensures better alignment of different colors. It is
suitable for paints and lubricant pails but is not preferred for food and FMCG product
containers. This is a very flexible printing technology, with no limitations on the thickness and nature of the material on which the printing will be carried out.
Advantages of Screen Printing
• It is an effective and economical printing methodology.
• Screen printing process is useful in applying long-lasting images to virtually any printable surface like foam board, metal, glass, fabric, vinyl, rigid plastic and many others.
• Screen printing process can apply very heavy ink coverage, resulting in a long-lasting design. This method, if used on certain coatings and additives ensures that the ink is
resistant to harsh environment for years without fading.
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 9
Innovation
1. Anticounterfeiting
The packaging industry is facing constant challenges from segments who market counterfeit or fake goods. This can adversely affect the brand image and thereby the salability of the product.
So protecting the contents of a packaged product has become the need of the hour. At Mold-
Tek, they ensure that their packs are protected from counterfeiting using their advanced technologies.
2. Square Container
Square plastic containers are equipped with handles and have square or rectangle-shaped lids. These containers are more preferable because they optimize space better than round pails.
Made of heavy-duty durable plastic, these pails are useful for dry or liquid storage.
Photographic IML decoration
• World class In-mold label decoration using ROBOTS for scratch resistant permanent branding
• Attractive display in modern trade - better brand visibility
• Tamper Proof and Stackable
• Tamper proof spout and cap to safe guard contents and your brand image
• Stackable and space saving – Saves transport costs
• Multi Utility Container
• Unique square container- More advertising space on all sides
• Airtight container with pull up spout and handle
• Extendable Spout Resistant for Easy pouring
• Extendable spout allowing easy pouring of oils
• 7 ISO plants across India with more than 70 injection molding machines to ensure timely delivery
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 10
India’s plastic packaging industry to touch $73 bn by FY20E
According to a joint report by FICCI and Tata strategic management group on plastic industry, Plastic industry is making significant contribution to economic development and growth of the various key sectors such as automotive, FMCG, Paint industry, food industry etc.
Packaging industry in India has seen a strong penetration of plastics as compared to global standards. However agricultural sector still hasn’t explored the benefits of plastics to a large
extent. Global average for plastics demand in agriculture is 8% while India
Indian plastic packaging exports has grown to double from $1.2 bn in FY07 to $2.7 bn in FY12. But fierce competition from countries likes China, Indonesia, and Taiwan can restrict the growth. Export from these value added plastic products could be a huge growth opportunity if
Indian manufacturers can increase/ maintain their manufacturing competitiveness while
ensuring high quality.
India’s plastic packaging industry is expected to grow at 18% CAGR to $73 bn by FY20E. The per capita packaging consumption in India is quite low at 4.3kg compared to 42kg and 19kg consumed in countries like Germany and Taiwan respectively. India is a growing market for
plastics and consumes about 12.8 mn tonnes of plastics annually against the global consumption
of 285 mn tonnes per year.
Strong Business Strategy to attain high business growth
Massive Opportunity in the Edible Oil Segment
Company has recently entered into the Edible Oil segment with 5 ltr and 15 ltr packs. All the leading brands like Godavat, Healthy Hearts, Saraiwala Oils and ConAgra foods have given full
commercial orders from recent quarters after having satisfactory response from the trial orders.
Edible Oil segment is a massive `10bn to `12 bn industry with 5 ltr and 15 ltr packs put
together. Recent correction in crude oil prices has narrowed the gap between the tin and the
plastic containers.
IML – Strong Technological edge against competitors
MTPL has developed in house IML (In Mold Labeling) technology and is the first to introduce such
technique in India in 2011. IML helps in better margins than the traditional screen printing, thereby increasing the profitability for the company. Currently the sale of IML products has risen
to 40% in Q2FY16. Company expects this to rise to 50% by FY17E.
RAK plant and Indian plants expansion will take Capacity to 32,000 tonnes by June 2016E
Company has recently expanded its capacities across all the Indian plants from 22,000 tonnes in FY15 to 29,000 tonnes by Mar 2016. Also recently company has set up a 3,000 tonne capacity in
RAK, UAE to tap the export market. All the licenses and necessary approvals from the UAE authorities have been achieved. The capacity will be on stream by June 2016.
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 11
Financial Overview Pretax Margin
Consistent rise in top line The MTPL has shown consistent growth in the top line ensures the rising business efficiency and
and market share. As we can see from the chart given MTPL has shown phenomenal growth in
the top line. This ensures the rising business efficiency and market share is also rising.
Top line growth (Net Sales)
Source: Company data, Institutional Research
EBITDA Margins As shown in the graph below, MTPL has shown consistent EBITDA growth over the past few
quarters. This shows that MTPL has been successful in managing the operating expenses
efficiently with the rise in the top line. In the upcoming period we believe that EBITDA margin will likely to continue in the upcoming period.
EBITDA Margins
Source: Company data, Institutional Research
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Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 12
Operating Margins As shown in the graph below, MTPL has become successful in increasing the operating margins
over past few years. Consistent rise in the operating profit indicates that, MTPL has become
successful in transferring the operating cost to its customers. This also indicates rising efficiency in the business. We believe that MTPL will deliver better operating margins as they focus more
on the segments where they have higher realizations.
Operating Margins
Source: Company data, Institutional Research
Net Profit Margin
MTPL has become successful in delivering consistent and high growth in the net profit and also margins are showing consistent growth. This shows that the business of the company has
become more robust over the period of time. Large multiyear contracts, strong client addition
makes company more lucrative. We believe that MTPL will likely to report higher bottom line
growth in the upcoming future. This also makes MTPL a safer bet.
Net Profit Margin
Source: Company data, Institutional Research
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Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 13
Return Margin
ROE performance
As shown in the diagram below, we can see that ROE of the company has decline in the FY13 due to higher capital expenditure. The ROE has shown a sharp recovery after FY2013. We
believe that in the upcoming period the ROE will keep a sustainable benchmark.
ROE performance
Source: Company data, Institutional Research
Net Profit to Payout Ratio
As shown in the diagram below, we can see that ROCE of the company has decline in the FY13 due to higher capital expenditure. The ROCE has also shown a sharp recovery after FY2013. We
believe that in the upcoming period the ROCE will keep a sustainable benchmark. As marginal
debt burden and higher reserve will likely to help company to maintain the higher ROCE.
Net Profit to Payout Ratio
Source: Company data, Institutional Research
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Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 14
Key Risks
Investment Risk :
Volatility in the crude oil prices will affect the profitability of the business as
petrochemicals are the raw material of the product of material.
The company has high dependency on the particular clients as company has exposure to
limited clients.
Loss of one client can affect larger portion of the revenue.
As an OEM manufacturer company have less pricing parity. So margin improvement is a difficult task for the company.
SWOT Analysis
Source: Institutional Research
Mold-TekPackaging
Ltd.
Strengths• Strong domain focus
• Diversification of business.
• Strong management and
technology backup.
Opportunities• Further penetration in retail
sector
• Mining the existing and the new
clients
Weaknesses• High client concentration
• Single domain dependence
Threats• Slowdown in the consumer
spending
• Loss of top client
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 15
Valuation & Outlook
At the CMP of `271, MTPL is trading at 15.3x, and 11.8x its FY16E, and FY17E EPS of `17.9 and
`23.1. Compared to its peers; MTPL is trading at a discount P/E multiple, although its margins
are better than or comparable to peers. We initiate coverage on MTPL with a BUY rating and
attach a multiple of 15.2 xs to MTPL’ FY17E earnings (EPS) to arrive at the target price of `352,
indicating a potential upside of 28.6%.
1 year forward P/ E Chart
Source: Capitaline, Institutional Research
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Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 16
Income Statement
Y/E Mar (`mn) FY13 FY14 FY15 FY16E FY17E
Net revenues 1,918 2,537 2,851 2,993 3,591
Operating cost 1,720 2,244 2,452 2,484 2,981
EBITDA 198 293 399 509 610
EBITDA Margin (%) 10% 12% 14% 17% 17%
Depreciation 55 69 82 90 90
Other Income 3 5 8 10 10
Interest (Net) 58 84 72 75 75
PBT 88 137 253 354 455
PBT Margin (%) 5% 5% 9% 12% 13%
Tax 30 49 84 106 137
Adjusted PAT 30 49 84 106 137
Extraordinary Items 0 0 0 0 0
Reported PAT 58 88 169 248 319
Balance Sheet
Y/E Mar (`mn) FY13 FY14 FY15 FY16E FY17E
Equity capital 113 113 138 138 138
Reserves & Surplus 378 412 1,018 1,127 1,315
Net worth 491 525 1,156 1,265 1,453
Total debt 218 195 109 100 115
Deferred Tax Liability 12 44 44 40 40
Total Liabilities & Equity 733 778 1,325 1,417 1,625
Net block 700 718 714 750 800
Capital WIP 26 25 27 30 30
Total fixed assets 726 743 741 780 830
Investments 32 32 32 30 30
Other Fixed Assets 5 4 5 5 5
Total Non-Current Assets 785 806 816 857 912
Debtors 350 422 442 440 450
Cash & bank 4 6 9 5 5
Loans & advances 71 74 136 190 348
Other Current Assets 3 65 12 30 30
Total Current Assets 664 850 875 940 1,108
Creditors 447 460 35 40 50
Provisions 53 85 122 115 120
Current Liab. & Prov. 716 878 366 380 395
Total Assets 733 778 1,325 1,417 1,625
Key Ratio
Y/E Mar (`mn) FY13 FY14 FY15 FY16E FY17E
Per Share Ratios
Fully diluted E P S 4.22 6.39 12.26 17.95 23.10
Book Value 35.58 38.04 83.77 91.68 105.28
Valuation Ratio
P/E 42.00 39.86 22.10 15.10 11.73
P/BV 1.08 2.74 3.24 2.96 2.57
EV/EBITDA 3.89 5.75 9.77 7.64 6.40
EV/Sales 0.39 0.66 1.37 1.30 1.09
Growth Ratios
Sales Growth 10% 32% 12% 5% 20%
EBITDA Growth (6)% 48% 36% 27% 20%
Net Profit Growth (38)% 52% 92% 46% 29%
EPS Growth (38)% 52% 92% 46% 29%
Common size Ratios
EBITDA Margin 10% 12% 14% 17% 17%
EBIT margin 8% 9% 11% 14% 15%
PAT margin 3% 3% 6% 8% 9%
Return ratios
RoNW 12% 17% 15% 20% 22%
RoCE 30% 44% 28% 34% 37%
Turnover ratios (days)
Debtors ( Days) 67 61 57 54 46
Creditors ( Days) 22 25 13 15 13
Net WC (Days) 3 3 5 6 7
Solvency Ratios
Total Debt/Equity 0.49 0.48 0.15 0.12 0.12
Source: Company data, Institutional Research
Cash Flow
Y/E Mar (`mn) FY13 FY14 FY15 FY16E FY17E
PBT 90 147 253 354 455
Add: Depreciation 57 72 83 90 90
Other Adjustments 58 84 73 75 75
Chg. in working capital (19) (42) (86) - -
Interest paid 58 84 73 75 75
Extra Ordinary Items - - - - -
CF from operations 143 257 324 519 620
Capex (314) (111) (91) (36) (50)
Purchase of investment 22 22 4 5 5
Proceeds from Invest. Sale 1 1 (3) (3) -
Other Adjustments - - - - -
CF from Investing acti. (209) (88) (91) (31) (45)
Share appl. money received (30) (48) (85) (106) (137)
Finance Cost (84) (84) (73) (75) (75)
Dividend & dividend tax (28) (34) (55) (92) (137)
CF from Financing acti. 68 (167) (229) (493) (575)
Chg. in cash 2 2 4 (5) -
Opening cash 3 4 6 10 5
Closing cash 4 6 9 5 5
Du-Pont Analysis (%) FY13 FY14 FY15 FY16E FY17E
PAT/ PBT 66% 64% 67% 70% 70%
PBT/ PBIT 60% 60% 78% 83% 86%
PBIT / Sales 8% 9% 11% 14% 15%
Sales / Assets 159% 181% 187% 182% 194%
Assets/ Equity 246% 267% 132% 130% 127%
ROE 12% 17% 15% 20% 22%
Equity | India | Plastics Packaging
Mold-Tek Packaging Ltd. February 10, 2016
Institutional Research | Initiating Coverage 17
NOTES
Recommendation Rationale
Recommendation Expected Absolute Return (%) over 12 months
BUY >15%
ACCUMULATE <10% and >15%
NEUTRAL <-10% and <10%
REDUCE >-10% and <-20%
SELL >-10
Expected absolute returns are based on share price at market close unless otherwise stated. Stock recommendations are based on absolute upside (downside) and have a 12-month
horizon. Our target price represents the fair value of the stock based upon the analyst’s discretion. We note that future price fluctuations could lead to a temporary mismatch between upside/downside for stock and our recommendation.
GEPL CAPITAL Pvt Ltd
Reg Office: D-21 Dhanraj mahal, CSM Marg, Colaba, Mumbai 400001
Analyst Certification
The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or
indirect compensation in exchange for expressing specific recommendations or views in this report:
Name : Omkar Tanksale
Sector : Plastics Packaging
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