over ownership is the biggest reason , some MF holdings have beat the drums & spread it to the last mile, these kind of stock doesn’t move easily when there is no local buyer left,
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My observation post analysis
Positive points
- Only integrated player who makes its own robots, labels and moulds
- When competition in IML increases to manufacture Pails (huge part of portfolio), a EBITDA per ton expansion is likely. Currently this is not possible as Moldtek is the only player in IML.
- Pharma packaging is a good segment to give a growth with higher EBITDA per ton
- There are many segments waiting to transition to Plastic packaging (for ex Plastic based hospital furniture). Being a leader in the segment Moldtek has all resources to venture into many other industries of plastic products where margins are high.
- Business succession seems to have been taken care of as the promoters son and Nephew seems to have a good hold over the business. The son has proved the same by adding pharma sector packaging to the kitty.
- Regulatory risk is low as they can make upto 25% use of recycled plastic in their products as per new EPR (extended producer responsibility) norms
- With expansion over different geographies, company is trying to build a moat by being the only player who is present closer to the clients all manufacturing facilities through out the country
Some Risks
- Largely a family business with many family members already working at several positions
- Currently they might not be able to use IML for Manufacturing Pails for Paint industry
- Majorly a domestic play, export will not be more than 10% as logistics cost make export unviable
Note: Invested
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