Margin Pressure Hits Stocks

The sharp price drops for All Time Plastics and M&B Engineering, now trading near their 52-week lows, are mainly due to shrinking operating profit margins. All Time Plastics saw its Operating Profit Margin (OPM) fall from 19.64% to 11.04% by September 2025. This impacted net profit significantly, driven by supply chain disruptions and higher freight costs. Similarly, M&B Engineering's OPM slipped to 11% by December 2025, worsened by rising operational costs, leading Domestic Institutional Investors to reduce their stakes.

Why Stocks Are Falling: Margin Squeeze

Both All Time Plastics and M&B Engineering have seen significant drops in market value. All Time Plastics, which listed in August 2025, saw its stock fall about 40% to Rs 200 by March 2026, near its all-time low of Rs 194. M&B Engineering, also listed in August 2025, dropped over 50% from its peak, trading around Rs 251 by late March 2026, close to its 52-week low of Rs 243. This decline is directly linked to margin contraction. All Time Plastics' OPM fell from 19.64% to 11.04% between September 2024 and September 2025. M&B Engineering’s OPM also dropped to 11% in the December 2025 quarter. These pressures have hurt profitability; All Time Plastics’ net profit fell 23.61% year-over-year in Q3 FY26, despite a 7.07% revenue increase. The market fears these costs and supply chain issues, worsened by global events and freight costs, will continue to hurt profits.

Singhania's Contrarian Bet: Growth Prospects

Sunil Singhania's confidence likely comes from strong long-term growth figures reported by both companies, a sharp contrast to their current stock performance. All Time Plastics has shown a 14% sales Compound Annual Growth Rate (CAGR) between FY20 and FY25, with EBITDA and net profits growing at 19% and 25% CAGRs respectively over the same period. Despite a recent dip in Q3 FY26 net profit by 23.61% year-over-year, revenue grew 7.07%. The company is also exploring engineered bamboo products with a Rs 10 crore investment. Its Return on Capital Employed (ROCE) of 21.36% remains a strong operational indicator. However, its P/E ratio is around 36x, higher than peers like Finolex Industries (21.86) and Time Technoplast (17.17), and its valuation grade has shifted to 'Fair' from 'Attractive'. Analyst views are divided, with some downgrading the stock to 'Sell' due to valuation and financial concerns, while others upgraded it to 'Hold'.

M&B Engineering, a key player in the Pre-Engineered Buildings (PEB) sector, shows strong growth with a 12% sales CAGR and a 46% net profit CAGR from FY20 to FY25. Recent Q3 FY26 results show revenue up 7.96% year-over-year to Rs 355.35 Cr and net profit up 43.77% year-over-year to Rs 25.49 Cr, with net profit margins improving to 7.17%. This recent performance contrasts with earlier margin struggles. The company secured its largest export order, worth Rs 212 crore, from the US, showing expanding international competitiveness. Management aims for topline targets of Rs 1,250 crore and EBITDA margins around 12.75%. M&B Engineering's P/E ratio of approximately 16x is attractive compared to the 'Industrials' sector median of 15.6x, though some specific PEB competitors trade at similar or lower multiples. Analysts are positive, with an average price target suggesting significant upside. The PEB sector itself is projected to grow at a CAGR of 11.66% by 2030.

Key Risks for Investors

Despite Singhania's confidence, significant risks remain. For All Time Plastics, the P/E ratio of over 36x appears high given recent profit declines and a 'Fair' valuation grade. The company's net sales growth of 12.20% over five years is moderate, and the six-month PAT decline of 35.23% raises concerns about margin recovery. Institutional investors have reduced holdings, and the stock has underperformed the broader market. Reliance on imported raw materials makes it vulnerable to geopolitical supply chain disruptions and currency fluctuations, with high freight costs impacting profitability. Furthermore, increased debtor days to 57 and a widened cash conversion cycle indicate potential working capital issues.

M&B Engineering, despite recent profit growth, still faces operational cost pressures. The reduction in DII holdings suggests cooling institutional confidence, which can often precede price drops. The company has not paid dividends, which may deter some investors. While its P/E is attractive, some direct PEB competitors trade at similar or lower multiples. The significant drop from its all-time high also highlights the market's sensitivity to its operational challenges.

Looking Ahead: Company Plans and Analyst Views

All Time Plastics is banking on its diversification into bamboo products and potential margin recovery to boost future profits. Management aims to sustain profitable growth using its design-to-delivery capabilities. M&B Engineering is focused on its export order book and expanding capacity, projecting topline growth to Rs 1,250 crore and EBITDA margins of 12.75%. Analysts, on average, see significant upside potential for M&B Engineering, with a consensus price target of Rs 420-428. All Time Plastics faces more cautious analyst sentiment with varied ratings. The near-term performance for both stocks will depend on their ability to manage supply chain volatility and turn strategic plans into actual margin recovery and sustained profit growth.