Thread by @mmali09

#MoldTek Packaging - Rolling Thread (Disc: Not Invested)

1/ Putting together my study on an interesting proxy play to consumer products.

They are pioneers in the field of In-Mold label (IML) decoration in India. A market leader in Indian plastic packaging industry.

2/ However, the sustainability of these moats needs closer look. Mold-Tek has a state of the art “IN HOUSE TOOL ROOM” with sophisticated Swiss and German machinery to design & produce complex molds and distinction of developing IML decorated packaging for the first time in India.

3/ Amazing list of clients in Food & FMCG (listed & non-listed co.) Their USP is innovative & custom mold designs for solving modern packaging challenges.

4/ New Products & developments:

1. Entry Into Pumps, Triggers: The Company has successfully started commercial production and supplies of pumps. In addition to Twist Lock & Lockdown pumps, the Company is exploring additional range of caps & closures like trigger pumps.

5/ QR-IML development is under installation and this revolutionary packing concept will be soon introduced
for the first time in India.

New packs that were launched in 2020 — Hinge pack, Sweet pack, Square packs, Adhesive packs are slowly
getting traction and will drive growth

6/ in the coming years. Demand for new segments is growing rapidly.

2. Additional Capacity : capacity expansion at Satara, Mysore, Vizag & Hyderabad plants. New plants for Asian paint orders are running at 80% capacities. MTPL has manufacturing facilities at nine locations in

7/ India, with a combined capacity of about 41,500MTPA.

Company is able to pass on the increase in RM prices and retained EBIDTA around Rs.36 to 37 per Kg which is 10% higher than that of last financial year.

Management expects achieving double digit growth and
improved.

8/ profitability for next few years with capacity expansion and widening of product range with higher
value addition.

Company Moats:
- An established player in the plastic pail packaging segment, with nearly three decades of operations, MTPL enjoys a ‘preferred vendor’ status

9/ from marquee customers which ensures repeat orders.

- MTPL also started manufacturing its own robots and, today, it is, perhaps, the only Indian packaging company to manufacture robots in-house. It has a centralized tool-room to design, develop, manufacture and

10/ maintain moulds and robots. With design, manufacture of its own moulds, labels and robots, it is fully integrated backward which gives it a significant competitive and cost advantage over its competitors.

Key Risks:
MTPL’s top-5 customers account for about 65%-75% of its

11/ revenue (Asian Paints being the largest). If it is unable to maintain its relationships with its large customers, it can adversely affect its revenues.

Additionally, any slowdown in customers business is a risk.

Areas of Growth

EBITDA Growth Drivers

Disc: Took small position today will add on decline & after further study.

#Moldtek ICICI came out with a "Buy" report. More than the target price it's the report insights one needs to look at.

Food & FMCG (F&F) segment - key growth driver. Keep an eye on volume⏫

#Moldtek has reported revenue CAGR of 12% to ₹438 cr in the last five years, led by volume CAGR of 10%. Among all three segments, F&F has remained a key growth driver for MTPL, recording phenomenal growth of 57% during the same period.