Prabhudas Lilladher is bullish on Mold Tek Packaging has recommended buy rating on the stock with a target price of Rs 365 in its research report dated January 04, 2019.
Prabhudas Lilladher's research report on Mold Tek Packaging
The company is likely to deliver 15% volume growth and ~18% value growth (due to higher RM prices) during FY19E. During FY20E they have guided volume growth of 20% which will result in a similar value growth as RM prices are expected to remain sober. While the company continues to face headwinds at the RAK plant, they have already taken steps to course correct and in accordance are moving surplus unutilized capacity to India, which coupled with the two new plants at Vizag and Mysuru, good traction in edible oil and ice cream segments and continued addition of new marquee clients across segments provide visibility for achieving the growth guidance for FY20E. Although optimal benefits of operating leverage are not visible currently, we expect it to improve once the two new plants are stabilized.
Outlook
At CMP, the stock is trading at PER of 20.9x FY19E and 15.1x FY20E EPS estimates of Rs 12.6 and Rs 17.4 respectively. We maintain our BUY rating on the stock with a TP of Rs 365 (21x FY20E EPS).
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