In the company's latest earnings call, superstar investor Ashish Kacholia, who holds 3.42% stake in packaging firm Mold Tek Packaging, had some questions around the expected volume and value growth for the company.
Kacholia wanted to know the tonnage growth Mold Tek was expecting in the current financial year. MD Laxman Rao said that Mold Tek is expecting anywhere between 15% and 20% in tonnage volume growth. Value growth would be higher because raw material prices are on the upward trend. Last year the raw material average was Rs 87 while this year ending 2019 March it was Rs 94.6.
"The price in May stood at around 95 but if the prices went up in the next few months then the number might be better more than 20% to topline growth", Rao said. Volume growth alone last year was 8.7% and Mold Tek anticipates that volume growth should be in the region of 15% to 20% in this current financial year.
Laxman Rao added that they are anticipating similar volume growth trend for the next three years in the region of 15% to 20%. One reason is that the Asian Paint plants would pickup volumes in the next financial year and edible oil packaging was doing pretty good numbers with volumes here also rising. Last full financial year, Laxman Rao noted, Mold Tek did Rs 22 Crores in edible oil packaging, and including ghee Rs 24 Crores. Comparably in the first two months of the new financial year Mold Tek has completed more than 8 Crores turnover in this category. The company is hoping that they may hit Rs 50 to 55 crores topline in edible oil from Rs 22 crores last year, which should rise to Rs 90 to 100 crores in the financial year 2021.
In essence, Mold Tek told Kacholia that it is expecting around 20% CAGR for next three years. That also means the company is postponing new technology investments because "our hands are full". Mold Tek mentioned that it is in talks with Swiggy and Zomato for tamper proof containers for them - they are conducting some trials and carrying out sampling. Mold Tek said it is hopeful of winning these contracts but did not as yet say they are firm commitments. The firm sees EBIDTA rising on its upper end of estimates to 34.5.
