Brokerage Prabhudas Lilladher has kept an 'Accumulate' rating on Mold-Tek Packaging with a target price of Rs 345, driven by strong growth in food and pharmaceutical segments. The company reported a 31% revenue surge in the second quarter of FY2027, bolstered by improved operating margins and a move into new high-value business areas.
Prabhudas Lilladher has maintained an 'Accumulate' rating on Mold-Tek Packaging, setting a target price of Rs 345 per share. The brokerage's view follows the company’s recent financial results, which showed steady growth in its core packaging business, particularly within the food, flavor, and pharmaceutical segments. The brokerage has adjusted its target price from the previous Rs 372, citing a shift in the valuation multiple to 17x the projected September 2028 earnings per share.
In the second quarter of the 2027 fiscal year, Mold-Tek Packaging reported a 31% year-on-year increase in revenue, reaching Rs 274.23 crore. Net profit also saw a significant boost, climbing 36% to Rs 21.07 crore compared to the same period last year. Operational efficiency played a key role in this performance, with EBITDA per kilogram improving to Rs 45.8, up from Rs 39 in the second quarter of the previous fiscal year. This gain in profitability is largely attributed to a more favorable product mix, where high-value segments have grown in contribution.
Strategic expansion remains a focal point for the company. Management is actively pursuing growth in the semiconductor packaging sector, an area identified as a potential long-term value creator. This is in addition to the company's steady operations at its manufacturing units in Cheyyar and Panipat, which are supporting current volume growth. Analysts project a compounded annual growth rate of 17.3% in sales and 28.8% in earnings per share through fiscal year 2029, supported by these ongoing diversification efforts.
Despite the positive growth indicators, investors may keep a watch on potential risks. The packaging industry is sensitive to raw material price volatility, particularly fluctuations in polymer feedstocks like polypropylene, which can impact margins. Additionally, the company’s performance remains tied to demand in cyclical sectors such as paints and lubricants. If volume growth in these traditional segments slows, it could offset gains made in the food and pharmaceutical categories. Execution in newer, complex ventures like semiconductor packaging also remains a key factor to monitor as the company scales its operations.