Release Date: August 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mold-tek Packaging Ltd (BOM:533080, Financial) reported a 7.5% year-over-year growth in volumes for Q1 FY25.
- EBITDA grew by 2.77% compared to Q1 of the previous year.
- The company has successfully commenced commercial production at three new plants in Cheyyar, Panipat, and Sultanpur Hyderabad.
- The Food & FMCG segment saw a robust 24% growth compared to the previous quarter.
- The company is optimistic about future growth in the pharma and ABG segments, with several major clients already approving their premises.
Negative Points
- EBITDA per kg has decreased due to the capitalization of costs during the project phase now being expensed.
- The new plants are currently operating at only 15% to 25% capacity utilization.
- The tin packs segment experienced lower growth due to competition from smaller players and supply chain issues.
- The company faces intense competition in the ice cream packaging sector, impacting its market share.
- Raw material costs have increased, affecting the gross profit per kg.
Q & A Highlights
Highlights from Mold-Tek Packaging Ltd (BOM:533080) Q1 FY25 Earnings Call
Q: What was the growth in the tin packs during the quarter?
A: The Food & FMCG segment grew by about 4.5% compared to the previous Q1, and 24% compared to Q4. Tin packs grew robustly at around 45% compared to Q1 last year. Overall, the total food and Qpack together saw a growth of 21.2% compared to the previous Q1 and 11.8% compared to Q4 last year. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: Why is there a mismatch in volume growth for tin packs despite expectations?
A: The volume growth in tin packs was 4.54%. However, compared to Q4, it saw a significant jump of 24%. The lower growth is due to competition from small players offering ice cream packs and delays in the launch of some products. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: How has the volume pickup been in the paint business, especially from Grasim?
A: The paint segment saw a 4.7% growth in volumes compared to Q1 last year and an 8% increase compared to Q4. The growth is mainly due to orders from Grasim, which are picking up faster now. We expect an 8% to 10% growth in the paint sector. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: Can you maintain your overall guidance of mid- to high-teens volume growth for this year and next year?
A: Yes, we are confident. The response to our pharma business is positive, with major clients auditing and accepting us as vendors. We expect decent numbers from pharma starting Q3. Our overall guidance of around INR15 crores to INR20 crores in pharma remains intact, contributing to better growth in volumes and EBITDA. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: What are the utilization levels for the Cheyyar and Panipat plants?
A: The Cheyyar and Panipat plants started at around 10%-15% utilization in March-April and improved to around 40% in June. We expect more than 50% utilization from July onwards. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: What is the current capacity and expected expansion for the ABG plants?
A: The current capacity at Panipat and Cheyyur is about 4,000 tonnes, with Mahad adding another 1,500 tonnes. We plan to enhance capacities at Panipat and Cheyyur to 3,000-3,500 tonnes each. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: What is the expected EBITDA per kg for the pharma segment?
A: This year, the EBITDA for pharma will be around INR100 to INR120 per kg. Once we reach a turnover of INR50 crores to INR60 crores, the EBITDA could range from INR100 to INR150 per kg, depending on the product mix. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: What is the impact of raw material costs on your margins?
A: Raw material prices have increased, but the use of recycled plastic (RCP) has reduced the overall cost per kg from INR98 to INR95. The impact on margins is minimal, about INR1 per kg. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: What is the current capacity utilization for the pharma plant?
A: The pharma plant is running at about 10% capacity utilization. We expect bulk orders to start coming in soon, improving utilization levels. - J. Lakshmana Rao, Executive Chairman and Managing Director
Q: What is the revenue contribution from different segments?
A: Paints contribute 42.5%, lubes 23.8%, Food & FMCG 21.17%, Qpack 12.11%, and pharma 0.4% to the total revenue. - J. Lakshmana Rao, Executive Chairman and Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
