Mold-Tek Packaging Limited Q4 FY22 Earnings Conference Call Insights

Key highlights from Mold-Tek Packaging Limited (MOLDTKPAC) Q4 FY22 Earnings Concall

Q&A Highlights:

• Ravi Naredi from Naredi Investments asked for the reason for debtors rising too much as on 31 March, 2022 from INR90 crores last year to INR143 crores. Laxman Rao MD said that the sales growth was almost 33%. When the sales grow more rapidly towards the end, the billing value has increased by almost 35%, 36% vs. last Feb. and Mar. So raw material prices have shot up making the debtors look ballooned. And also credit period increased by certain clients like Asian Paints.

• Kaushal Shah from Dhanki Securities asked about the 4Q22 volume numbers for the three segments. Laxman Rao MD answered that the volume numbers of paint for Q4 is 4,676 tonnes; lube is 2,140 tonnes, Food and FMCG is around 1,580 tonnes. Overall it is around 8,400 tonnes.

• Kaushal Shah from Dhanki Securities enquired about some client names on the F&F side which can add to volumes in the current year. Laxman Rao MD replied that Hindustan Unilever and GSK is more or less confirmed, mold development has also been cleared by them. But the molds will be tested and all that will take time. So first one will be in June, others MOLDTKPAC will do sometime in July, August.

• Bhargav Buddhadev from Kotak Mahindra asked about the revenue run rate the company is looking from the QR coded business in FY23. Laxman Rao MD replied that MOLDTKPAC will be very happy even if it can reach at least 5-6% of revenue coming through this QR coded, which means about INR30-35 crores.

• Bhargav Buddhadev from Kotak Mahindra enquired about any update on the pump business. Laxman Rao MD said that with Himalaya, the company has progressed, they’re also very much stuck with the drop in volumes. However, MOLDTKPAC is inching up and at least INR50-60 lakhs per month sales were achieved in 4Q. Wipro’s commitment has been postponed to Dec. ’22 of 2 million pieces.

• Miraj Shah from Dalal & Broacha asked about the reason for the realization per kilo dropping in 4Q22. Laxman Rao MD clarified that MOLDTKPAC’s pricing strategy is always passing on the previous month price to the next month billing. So whatever price rise in the month of March is realized only in April. And in the case of Asian Paints, which is one of the largest customers, it is quarterly basis.

• Atul from Centrum Broking Limited asked that at what capacity level MOLDTKPAC should expect a healthy free cash flow generation. Laxman Rao MD replied that for the company’s major expansions, it would require cash flow generation to the tune of INR200 crores in the next 2-2.5 years. And that is where MOLDTKPAC made the QIP recently.

• Atul from Centrum Broking Limited asked about the company’s current total capacity and utilization rate. Laxman Rao MD replied that it’s 44,500. And the utilization rate is close to 70%.

• Atul from Centrum Broking Limited also asked that on the FMCG part, what percentage would be edible oil and what percentage will be ice creams. Laxman Rao MD answered that it’s not ice cream, it’s a mix of all food products. Out of 43 crores clogged in Q4, 30 crores is thin wall and 13 crores in edible oil packs.