Mold-Tek Packaging Limited

Mold-Tek Packaging reported a robust performance for the nine months ending Q3 FY26, with EBITDA increasing by 20% and sales value by 12% compared to the previous nine months. For Q3 FY26 specifically, sales volumes grew by 6% and EBITDA by 14% year-on-year. Despite Q3 traditionally being the weakest quarter, the company observed double-digit growth in January and expects strong order books for February, anticipating a return to 12-15% volume growth in Q4 FY26 and Q1 FY27.

The company has largely completed the consolidation of its Hyderabad manufacturing units, reducing them from five to two (Unit 1 and 10). The printing unit and Unit 4 (catering to Asian Paints) are also being moved to Sultanpur. This consolidation is expected to yield better operational efficiencies, cost controls, and reduced movement of goods and personnel, with visible impacts anticipated from Q4 FY26 onwards.

Mold-Tek has signed an MOU with Vibe Generation to develop unique product patents for closures and other applications. The first two component drawings are complete, and pilot molds are expected by the end of February/March 2026. Commercial molds are targeted for Q1 FY27, with these products having applications in both European and Indian markets, potentially adding tens of crores in value over the next year. Additionally, the company is developing new Pharma products like eye drops and nasal sprays, with pilot molds for ophthalmic products already under development.

The Pharma segment has cleared over 25 clients for production, though less than half have started commercial pickup. The company aims to achieve INR35 crores in Pharma revenue for FY26 and targets INR50-55 crores for FY27, representing a 40-45% growth. Long-term, Pharma is expected to grow at 30-35% volume, significantly contributing to the bottom line as it operates above the break-even point.

The company expects to close FY26 with ABG volumes around 6,000 tons, with capacity utilization projected to exceed 70% in FY27. The resolution of Recycled Content Plastic (RCP) issues with Asian Paints has led to volumes picking up from January, with a formula developed to incorporate 40-50% RCP. Management clarified that the use of cheaper RCP will not impact EBITDA per kg as the cost benefit will be passed on to clients, ensuring competitiveness.

The lubricant segment experienced a 10% volume decline in Q3 FY26. This was primarily due to the loss of the BPCL tender and a strategic decision to not actively participate in the low-grade, urea-based DEF lubes market. The company is letting go of low-end lube opportunities and expects the segment to see 2-3% annual growth, aligning with private players. The addition of Veedol recently is expected to partially fill the gap from the BPCL tender loss.

FY26 capex is projected to be around INR120 crores, down from INR140 crores in FY25, with a target of INR80-85 crores for FY27. This capex includes INR25 crores for Pharma expansion, INR20-25 crores annually for tool room and mold replacement, and INR9 crores for injection molding machines, particularly for the North plant's Thin-wall and Q-Pack products. Overall capacity utilization in Q3 FY26 was 62.5%, down from 74% in Q1, but is expected to cross 70% in Q4 FY26 and remain above 70% in FY27 due to increased utilization of ABG facilities and North plant products.

Mold-Tek has been selected as a preferred vendor for Swiggy restaurants, providing restaurant and food packs. This partnership is expected to generate EBITDA per kg similar to their Food and FMCG segment (INR70-80 per kg). While it is a recent MOU and significant volume additions are not expected immediately, it will enable broader reach to restaurants and food delivery partners, contributing to growth in the coming quarters^⏳.