Mold-Tek Packaging's (MPL) Q1FY22 result was in-line with our estimates on key parameters. Statewide lockdown amid second wave of Covid-19 weighed on operations on a sequential basis; however, the company's performance over Q1FY21 was recommendable, primarily aided by better product mix.

Net sales increased by 105% YoY to Rs 1,337 million, while EBITDA came in at Rs 253 million, higher by 177% YoY. The company reported net profit of Rs 121 million, growth of 669% over Q1FY21. The company has added many new clients in Q1FY22 as well as has introduced higher margin QR coded IML products.

Commenting on the result review, IDBI Capital said, "MPL remains focused on capacity expansion, new product launches and further improving product mix for sustainable sales growth and margins expansion in near term. We have marginally increased our net sales/PAT estimates for FY22E/FY23E. We believe management positive commentary on net sales growth outlook as well as healthy improvement in margins paves the way for PE re-rating for the stock. We recommend HOLD with a revised TP of Rs 550, assigning 18x PER on FY23E."

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.