Mold-Tek Packaging Ltd:Annual Report 2023-24 Analysis

Mold-Tek Packaging Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History:

Mold-Tek Packaging Ltd. was established in 1985. The company was promoted by Mr. J. Lakshmana Rao and Mr. A. Subrahmanyam.

Headquarters Location and Global Presence:

The company’s headquarters is located in Hyderabad, India. While primarily focused on the Indian market, Mold-Tek has expanded its reach through exports to other countries.

Company Vision and Mission:

(Information not readily available publicly)

Key Milestones in Their Growth Journey:

• Introduction of In-Mould Labeling (IML) technology.
• Expansion into various packaging segments like lubricants, paints, food, and FMCG.
• Significant growth in market share within the paints and lubricants sectors.

Stock Exchange Listing Details and Market Capitalization:

Mold-Tek Packaging Ltd. is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). (Ticker symbols: MOLDTKPAC, MOLDTECH) Market capitalization fluctuates based on market conditions. Refer to live market data for the most up-to-date information.

Recent Financial Performance Highlights:

(Requires up-to-date financial data from the company’s official releases and financial news sources. Examples include revenue growth, profit margins, etc.)

Management Team and Leadership Structure:

(Details can be found on the company’s website and in annual reports. Include key personnel like the CEO, CFO, and board members.)

Any Notable Awards or Recognitions:

(Search for any press releases or news articles that mention awards or recognitions received by the company.)

Their Products #

Complete Product Portfolio with Categories:

Mold-Tek Packaging offers a wide range of rigid plastic packaging solutions categorized as follows:

• Paints Buckets: IML containers for paints.
• Lubricant Containers: Packaging for lubricants.
• Food & FMCG Containers: Packaging for food products and other FMCG goods.
• Other Packaging Solutions: Packaging for other applications.

Flagship or Signature Product Lines:

The IML-based paint buckets and lubricant containers are considered flagship products.

Key Technological Innovations or Patents:

• In-Mould Labeling (IML): Integration of labels during the molding process, enhancing aesthetics and durability.
• QR Code Integration: Embedding QR codes into packaging for traceability and marketing.
• Tamper-Evident Solutions: Packaging designed to prevent tampering and ensure product integrity.

Manufacturing Facilities and Production Capacity:

Mold-Tek operates multiple manufacturing facilities across India. Details of precise production capacities can be found in company reports.

Quality Certifications and Standards:

(Research the company’s website and annual reports for information on ISO certifications and other relevant quality standards.)

Any Unique Selling Propositions or Technological Advantages:

• IML Expertise: Strong expertise in IML technology, providing superior aesthetics and functionality.
• Customization: Ability to customize packaging solutions to meet specific client requirements.
• Quality and Durability: Focus on producing high-quality and durable packaging.

Recent Product Launches or R&D Initiatives:

(Check company press releases and annual reports for information on new product launches and ongoing research and development activities.)

Primary Customers #

Target Industries and Sectors:

• Paints
• Lubricants
• Food & FMCG

Geographic Markets (Domestic vs. International):

Primarily focused on the Indian market with increasing exports.

Major Client Segments (Agricultural, Industrial, Residential, etc.):

The client base mainly falls under the industrial sector (paints, lubricants, etc.) and the consumer goods sector (FMCG, food).

Any Notable Government Contracts or Institutional Clients:

(Requires specific research into the company’s client base and contract details.)

Distribution Network and Sales Channels:

(Information not readily available publicly)

Customer Testimonials or Case Studies:

(Check the company’s website and marketing materials for any published testimonials or case studies.)

Major Competitors #

Direct Competitors in India and Globally:

• Time Technoplast Ltd.
• Nilkamal Ltd.
• Supreme Industries Ltd.
• Berry Global (Global competitor)
• RPC Group (Global competitor)

Comparative Market Share Analysis:

(Requires industry-specific market research reports to accurately determine market share.)

Competitive Advantages and Disadvantages:

• Advantages: Strong focus on IML technology, established relationships with major paint and lubricant companies, customization capabilities.
• Disadvantages: Susceptible to raw material price fluctuations, competition from unorganized players in certain segments.

How They Differentiate from Competitors:

Through their expertise in IML technology, customization, and focus on high-quality rigid plastic packaging.

Industry Challenges and Opportunities:

• Challenges: Rising raw material costs (polymers), environmental concerns regarding plastic waste, increasing competition.
• Opportunities: Growing demand for packaged goods in India, increasing adoption of IML technology, focus on sustainable packaging solutions.

Market Positioning Strategy:

Mold-Tek positions itself as a leading provider of innovative and high-quality rigid plastic packaging solutions, particularly in the IML segment, targeting key industries like paints, lubricants, and FMCG.

Future Outlook #

Expansion Plans or Growth Strategy:

(Requires checking the company’s official statements, annual reports, and investor presentations.) Generally includes expanding production capacity, targeting new markets within India, and increasing exports.

Upcoming Products or Innovations:

(Look for any announcements regarding new product development or technological advancements.)

Sustainability Initiatives or ESG Commitments:

(Check the company’s website and reports for information on their sustainability efforts, such as reducing plastic waste, using recycled materials, and implementing energy-efficient practices.)

Industry Trends Affecting Their Business:

• Increasing demand for sustainable packaging solutions.
• Growth of the organized retail sector.
• Growing awareness of food safety and hygiene.
• E-commerce growth driving demand for protective packaging.

Long-Term Vision and Strategic Goals:

(This information can be found in the company’s annual reports, investor presentations, and interviews with management. Look for statements regarding their long-term market leadership, innovation strategy, and commitment to sustainability.)

Mold-Tek Packaging Limited: Financial Analysis (FY 2023-24) #

Three-Year Trend Analysis of Key Financial Metrics (FY 2021-22 to FY 2023-24) #

Source: Five Years Performance Review, Chairman’s Message, MD&A. EBITDA Margin & PAT Margin calculated from provided data.

Revenue contracted in FY 2023-24 primarily due to a 12% reduction in average raw material prices, despite a 4.84% growth in sales volume (35,661 tonnes in FY24 vs. 34,014 tonnes in FY23). Profitability metrics (PBT, PAT) declined in FY24, attributed to economic challenges, higher depreciation and interest costs from major expansion projects yet to contribute significantly to growth. FY 2022-23 showed strong growth over FY 2021-22 across all reported metrics.

Business Segment Performance (FY 2023-24) #

• Square Packs: Achieved remarkable volume growth of 88.01%, driven by increased market demand and effective patent enforcement. Sales in the cashew market increased from ₹3.5 crore to ₹25 crore, and edible oil sales increased from ₹20 crore to ₹35 crore. Capacities are being expanded.
• Food & FMCG Packs: Grew by 6.88% in volume. Exports increased by 100% (₹4.35 Cr in FY24 vs ₹2.20 Cr in FY23). New pack for restaurant industry contributed ₹2.60 Cr. Milky Mist sales grew 50% (to ₹9.80 Cr), Heritage sales increased 65% (to ₹5.70 Cr), and sweet box sales grew 100% (to ₹4.75 Cr).
• Lubes-Packs: Reported modest volume growth of 3.42%. Gained approx. 230 TLs from PSUs like BPCL and increased sales to Shell India by approx. 125 TLs.
• Paints-Packs: Experienced an overall decline. However, sales to Pidilite increased almost 5 times (50 TLs increase, sole supplier for their paints segment) and sales to Berger increased considerably (50 TLs increase) due to demand for IML products.
• Pharma Packaging: New segment highlight. Advanced facility inaugurated in Q4 FY24. Received USDMF, CPSC Certification & Health Canada approvals. Got in-principle approval for EV tubes & caps from major players, expected to saturate 100% capacity. Substantial growth anticipated in the latter half of the upcoming financial year.

Source: Chairman’s Message, Growth Drivers, MD&A.

Major Strategic Initiatives and Progress #

• Geographical Expansion & New Plants:
  • Commenced operations at new plants for Grasim Industries (Aditya Birla Group - Paints Division) in Panipat and Cheyyar in Q4 FY24. Another plant at Mahad is nearing completion. Mold-Tek selected as preferred supplier in 3 out of 6 Grasim locations.
  • Setting up Food & FMCG and Square Pack facilities at Panipat to increase market reach in Northern India.
• Product Diversification & High-Value Products:
  • Successful foray into new segments: restaurants, sweets, cashews, fertilizers, and seeds.
  • Strategic entry into Pharma Packaging with a state-of-the-art facility in Sultanpur (diverse product range including tablet containers, caps, canisters, effervescent tubes).
  • Incorporated recycled materials into industrial packaging.
• Investment & Capex: Total capital expenditure for FY23 and FY24 amounted to approximately ₹280 crores.
• Intellectual Property: Granted patent for square packs. Actively taking legal action against infringers to protect patented designs.
• Client Development: Significant new orders from clients like Mahalasa Exports, Shri Sai Enterprises, Ushodaya, MK Agrotech, Patil Biotech, Drools Pet Food etc.
• Integrated Printing Facility: Under development at Sultanpur, Hyderabad, to consolidate printing activities, control costs, and reduce wastage.

Source: Chairman’s Message, Growth Drivers, Directors’ Report, MD&A.

Risk Landscape Changes #

The company identifies and manages various risks:

• Gap between Market Demand and Supply (Strategic Risk): Changes in consumer demand, competition, IP challenges. Mitigation: New product development, patent protection, differentiated products, key account management.
• Economic Risks: Global economic slowdown. Mitigation: Rigid packaging as part of essential commodities expected to have minimal impact.
• Operational Risks: Attracting/retaining key personnel, global health outbreaks, IT vulnerabilities. Mitigation: Supportive work environment, IT risk mitigation measures.
• Financial Risks: Exchange rate fluctuations, interest rate volatility, internal control risks. Mitigation: Derivative contracts for forex, policy to minimize long-term financing interest rate exposure, adequate internal financial controls.
• Legal and Compliance Risks: Regulations on safety, emissions, climate change, plastic recycling. Mitigation: Proactive measures for compliance, legal and R&D functions protecting patents.

The company has a robust risk management framework overseen by the Risk Management Committee and the Audit Committee. No specific “changes” to the risk landscape are detailed, but the report outlines current material risks and mitigation strategies. No risks threatening existence have been identified.

Source: MD&A, Report on Corporate Governance.

ESG Initiatives and Metrics #

• Environmental:
  • Committed to sustainability, enhancing environmental performance of products, operations, and supply chain.
  • ISO 9001:2015 and FSSC 22000 certifications. Facilities are certified Green Zones by Pollution Control Board.
  • Energy conservation: Replacing hydraulic machines with electric, monitoring consumption, LED lighting, solar power systems installed (estimated carbon offset of 3,990.3 tons/year). Energy intensity per rupee lakh of turnover: 1.75 GJ/₹ lakh (FY24) vs 1.50 GJ/₹ lakh (FY23).
  • Water management: STPs for recycling water for gardening, chillers for efficient water use. Water intensity per rupee lakh of turnover: 0.066 Kltr/₹ lakh (FY24) vs 0.062 Kltr/₹ lakh (FY23).
  • Waste Management: Process rejections (polypropylene) recycled. E-waste and plastic waste disposed through authorized vendors. Partnered for EPR compliance for post-consumer plastic waste.
  • R&D spend in FY24: ₹682.89 lakhs (0.98% of Total Income), 100% attributable to improving environmental/social impacts.
• Social:
  • Employee Well-being: “Great Place to Work” certified. Health insurance and accident insurance provided to 100% of permanent employees. Paternity benefits for 100% male permanent employees, Maternity for 100% female permanent employees.
  • CSR: Obligation for FY24: ₹169.18 lakhs. Amount unspent for FY24 (transferred to Unspent CSR A/c): ₹98.40 lakhs (due to long-term nature of some projects). Initiatives include education, healthcare, women empowerment, sanitation, food distribution. (Details in Annexure C).
  • Human Rights: Policies on human

Detailed Analysis #

Balance Sheet Analysis #

Mold-Tek Packaging Limited: Financial Analysis of FY 2023-24 #

Revenue Analysis #

• Overall Performance:
  • Sales Volume: Increased by 4.84% to 35,661 tonnes.
  • Revenue from Operations: Decreased by 4.28% to ₹69,865 lakhs, primarily due to a 12% reduction in average raw material prices.
• Segment-wise Performance:
  • Square Packs: 88.01% volume increase.
  • Food & FMCG Packs: 6.88% volume growth.
  • Lubes-Packs: 3.42% volume growth.
  • Paints-Pack: Overall decline, but significant growth with clients like Pidilite and Berger.
• Geographical Performance:
  • Domestic: Primary market with new plants at Panipat and Cheyyar, and one under construction at Mahad.
  • Exports: Food & FMCG exports increased by 100% to ₹4.35 crores. Focus on IML containers and Pharma Packaging.

Cost Structure Analysis #

• Cost of Materials Consumed: ₹39,669 lakhs (56.77% of Revenue from Operations), lower than FY23 due to reduced raw material prices.
• Employee Benefits Expense: ₹5,874 lakhs (8.41% of Revenue from Operations), increased from FY23.
• Finance Costs: ₹735 lakhs (1.05% of Revenue from Operations), increased due to borrowings for expansion projects.
• Depreciation and Amortization Expenses: ₹3,850 lakhs (5.51% of Revenue from Operations), increased due to new assets from expansion projects.
• Other Expenses: ₹11,074 lakhs (15.85% of Revenue from Operations).

Margin Analysis #

• Gross Profit Margin:
  • FY 2023-24: 43.22%
  • FY 2022-23: 40.27%
  • Trend: Improved due to a greater decrease in material costs than in revenue.
• EBITDA Margin:
  • FY 2023-24: 19.25%
  • FY 2022-23: 18.74%
  • Trend: Slight improvement, indicating effective cost management. EBITDA declined by 1.72% to ₹13,448 lakhs.
• Net Profit Margin:
  • FY 2023-24: 9.53%
  • FY 2022-23: 11.02%
  • Trend: Declined, reflecting higher depreciation and finance costs, leading to a 17.21% decrease in Net Profit. PBT margin was 12.69% in FY24 vs 14.07% in FY23.

Cash Management #

Cash Flow and Liquidity Analysis #

Key Performance Indicators #

Segment Performance Analysis #

Financial Performance Analysis of Mold-Tek Packaging Limited (FY 2023-24) #

Financial Overview #

Mold-Tek Packaging Limited reported mixed financial results for FY 2023-24. Sales volume increased, but revenue and profits declined due to lower raw material prices and investments in expansion projects.

• Sales volume increased by 4.84% to 35,661 tonnes.
• Revenue from operations contracted by 4.28% to ₹698.65 crores.
• EBITDA decreased marginally by 1.72% to ₹134.47 crores.
• PBT declined by 13.72% to ₹88.63 crores.
• PAT diminished by 17.21% to ₹66.59 crores.

Key Financial Indicators (FY2023-24 vs FY2022-23) #

• Debt-Equity Ratio: Increased to 0.24:1 from 0.09:1.
• Current Ratio: Decreased to 1.13 from 1.44 (-21.40%).
• Return on Equity (RoE): Decreased to 11.88% from 16.30% (-27.07%).
• Net Profit Margin: Decreased to 9.52% from 11.02% (-13.61%).
• Inventory Turnover Ratio: Decreased to 6.10 from 6.63 (-8.10%).
• Return on Capital Employed (ROCE): Decreased to 15.39% from 20.42% (-24.66%).
• Basic Earnings Per Share (₹5 face value): ₹20.07 (FY24) vs ₹24.41 (FY23).

Strategic Developments and Investments #

The company made strategic investments totaling approximately ₹280 crores towards growth, diversification, and expansion.

• Pharma Packaging: Inauguration of a new facility in Sultanpur.
• Expansion for Grasim Industries: Selected as a preferred supplier for 3 out of 6 locations.
• New Market Segments: Entry into packaging for restaurants, sweets, cashews, fertilizers, and seeds.
• Patent Enforcement: Granted patent for square packs with legal action against infringers.
• Integrated Printing Facility: Development of an expanded integrated printing facility at Sultanpur.

Segment-Wise Performance (Volume Growth FY24) #

• Square Packs: Achieved growth of 88.01%.
• Food & FMCG Packs: Grew by 6.88%.
• Lubes-Packs: Reported growth of 3.42%.
• Paints-Packs: Experienced an overall decline, with growth in sales to Pidilite and Berger.
• Pharma Packaging: New Sultanpur facility inaugurated in Q4 FY24; substantial growth expected in the latter half of FY25.

Future Outlook #

The company anticipates further capital investments in FY 2024-25 to drive growth in the Paints, Food & FMCG, and Pharma Packaging sectors.

Risk Management Analysis #

The company employs a risk management framework to identify, evaluate, and mitigate risks.

Economic Risks #

• Risk: Global economic slowdown.
• Mitigation: Rigid packaging industry is part of essential commodities; resilience of the Indian economy.
• Control Effectiveness: Monitored through assessment of macroeconomic trends.
• Potential Financial Impact: Could affect overall demand and profitability.

Strategic Risks #

• Risks:
  • Changes in consumer demand and loss of market share due to competition.
  • Intellectual property (IP) challenges.
  • Shift of end-consumers/dealers due to more choices.

Financial Performance Analysis of Mold-Tek Packaging Limited (FY 2023-24) #

Overview #

Mold-Tek Packaging Limited experienced a mixed financial performance in FY 2023-24. Sales volume increased by 4.84% to 35,661 tonnes, while revenue from operations decreased by 4.28% to ₹698.65 crores. This revenue decrease is primarily due to a 12% reduction in average raw material prices.

Profitability Metrics #

EBITDA saw a marginal decline of 1.72% to ₹134.47 crores. However, the EBITDA margin improved slightly to 19.25%. Profit Before Tax (PBT) decreased significantly by 13.72% to ₹88.63 crores, and Net Profit (PAT) diminished by 17.21% to ₹66.59 crores. This reduction in profitability is attributed to higher depreciation (₹38.50 crores) and finance costs (₹7.35 crores).

Impact of Expansion Projects #

Increased depreciation and finance costs stem from major expansion projects and investments amounting to approximately ₹280 crores over FY23 and FY24. These investments are yet to fully contribute to revenue and profitability.

Segment Performance: Square Packs #

The Square Packs segment achieved a volume increase of 88.01%, driven by strong market demand, particularly in the cashew market.

Financial Analysis: Mold-Tek Packaging Limited (FY 2023-24) #

Financial Performance Overview (FY 2023-24 vs. FY 2022-23) #

• Sales Volume: Growth of 4.84%, reaching 35,661 tonnes (FY 2023-24) compared to 34,014 tonnes (FY 2022-23).
• Revenue from Operations: Decreased by 4.28% to ₹698.65 crores (FY 2023-24) from ₹729.92 crores (FY 2022-23).
• EBITDA: Declined by 1.72% to ₹134.47 crores (FY 2023-24) from ₹136.82 crores (FY 2022-23). EBITDA margin maintained at 19.25%.
• Profit Before Tax (PBT): Decreased by 13.72% to ₹88.63 crores (FY 2023-24) from ₹102.72 crores (FY 2022-23).
• Net Profit (PAT): Diminished by 17.21% to ₹66.59 crores (FY 2023-24) from ₹80.43 crores (FY 2022-23).

Segment-Wise Performance (FY 2023-24) #

• Square Packs: Growth of 88.01%.
  • Cashew market sales: ₹25 crore (FY 2023-24) vs ₹3.5 crore (FY 2022-23).
  • Edible oils sales: ₹35 crore (FY 2023-24) vs ₹20 crore (FY 2022-23).
• Food & FMCG Packs: Grew by 6.88%.
  • Exports: ₹4.35 Cr (FY 2023-24) vs ₹2.20 Cr (FY 2022-23).
  • New restaurant industry pack sales: ₹2.60 Cr.
  • Milky Mist sales: ₹9.80 Cr.
  • Heritage sales: ₹5.70 Cr.
  • Sweet box sales: ₹4.75 Cr.
• Lubes-Packs: Growth of 3.42%.
• Paints-Pack: Overall decline, but increased sales to Pidilite and Berger.
• Pharma Packaging: New facility at Sultanpur inaugurated in Q4 FY24.

Mold-Tek Packaging Limited: Financial Performance and Strategic Analysis (FY 2023-24) #

Key Financial Highlights (FY 2023-24 vs. FY 2022-23) #

• Sales Volume: Increased by 4.84% to 35,661 tonnes from 34,014 tonnes.
• Revenue from Operations: Decreased by 4.28% to ₹698.65 crores from ₹729.92 crores (attributed to a 12% reduction in average raw material prices).
• EBITDA: Declined by 1.72% to ₹134.47 crores from ₹136.82 crores. EBITDA margin stood at 19.25%.
• Profit Before Tax (PBT): Decreased by 13.72% to ₹88.63 crores from ₹102.72 crores.
• Net Profit (PAT): Diminished by 17.21% to ₹66.59 crores from ₹80.43 crores.
• Capital Expenditure (FY23 & FY24 combined): Approximately ₹280 crores.
• Dividend (FY 2023-24): Total proposed dividend of 60% (₹3.00 per equity share), comprising a 40% interim dividend (₹2.00) and a recommended 20% final dividend (₹1.00).

Financial Performance Analysis #

Mold-Tek Packaging demonstrated resilience in sales volume despite economic challenges. The decline in revenue, despite volume growth, highlights the impact of volatile raw material pricing. Contraction in EBITDA, PBT, and PAT reflects these pricing pressures alongside investments in expansion projects. The company maintained a healthy EBITDA margin, suggesting effective operational cost management. The financials indicate substantial investment gearing up for future growth.

Segment Performance (FY 2023-24 Volume Growth) #

• Square Packs: Achieved 88.01% increase, driven by market demand and patent enforcement. Capacity expansion is underway.
• Food & FMCG Packs: Grew by 6.88%. Exports doubled, but overall growth was tempered by delays in new product introductions. The upcoming Panipat facility is expected to boost growth.
• Lubes-Packs: Reported modest growth of 3.42%.
• Paints-Packs: Experienced an overall decline. However, significant increases were noted in sales to Pidilite and Berger.
• Pharma Packaging: New Sultanpur facility was inaugurated, equipped with advanced automated systems. Substantial growth is anticipated from H2 FY25.

Strategic Developments and Growth Drivers #

1. Pharma Packaging Entry: Diversification with a state-of-the-art facility in Sultanpur.
2. Geographical and Capacity Expansion: New plants for Grasim Industries, expansion of Square Pack capacities, and setting up Food & FMCG and Square Pack facilities at Panipat.
3. High-Value Products & Client Acquisition: Focus on IML products and securing increased business from existing and new clients.
4. Product Diversification: Entry into packaging for restaurants, sweets, cashews, fertilizers, and seeds.
5. Intellectual Property: Granted patent for square packs with active legal enforcement.
6. Operational Enhancements: Development of an integrated printing facility at Sultanpur.
7. Sustainability: Integration of recycled materials into industrial packaging and new designs.

Future Outlook #

Anticipates further capital investments, particularly in Food & FMCG and Pharma Packaging. Strategic focus remains on leveraging innovation, design, and product quality. Growth in FY 2024-25 is expected to be driven by contributions from new plants for Grasim and ramp-up of Pharma Packaging. The Food & FMCG segment is projected to return to double-digit growth.

Key Risks and Opportunities #

• Risks: Market demand & competition, economic volatility, execution risk, financial risks (FX and interest rate fluctuations).
• Opportunities: Pharma Packaging, Food & FMCG, growth with key clients, sustainable packaging, e-commerce, and export potential.

Debt and Credit Rating #

• Debt:Equity ratio increased to 0.22:1 in FY24 from 0.09:1 in FY23.
• ICRA reaffirmed long-term rating at [ICRA]A+ (Stable) and short-term rating at [ICRA]A1.

Audit & Compliance #

Audit and Regulatory Analysis #