The agency has affirmed the short-term rating at ‘[ICRA] A1’.
ICRA stated that the revision in the outlook on Mold-TEK Packaging’s (Mold-Tek) long-term rating to 'positive’ from 'stable’ considers the expected improvement in the company’s credit profile supported by growth in earnings on the back of healthy demand from recently added customers for plastic packaging products, and scale-up of the pharmaceutical segment.
ICRA expects the company to clock a revenue growth of 12-16% in FY2026, supported by healthy volume growth and realisations, along with scale-up of volumes in the pharmaceutical division and supplies to recently added customers. Operating margins are expected to remain healthy at 18-19% supported by a healthy product mix.
While the company is expected to incur capex of Rs. 75-85.0 crore in FY2026, partially funded through debt, its capital structure and coverage metrics are expected to remain comfortable.
The ratings factor in Mold-Tek’s strong technological capabilities and its track record of adopting the latest trends in packaging further support the ratings. The company caters to end-user industries such as paints, food & FMCG and pharmaceuticals and has a reputed client base.
Healthy demand from reputed customer base and addition of new customers and products has led to a healthy revenue growth at a compounded annual growth rate (CAGR) of 12.3% in the last five years ending in FY2025.
The ratings are, however, constrained by the company’s high customer and segment concentration, with the top 10 customers accounting for around 60% of its revenues, while around 44% of revenues are derived from the paint division.
The ratings also consider stiff competition in the industry, limiting the company’s pricing flexibility.
The company is dependent on a single supplier for a major portion of its key raw material requirements and is exposed to supply-disruption risks in case of force majeure events.
Mold-Tek Packaging manufactures injection-moulded decorative packaging containers, mainly pails (cylindrical containers), for paint, lubricant, food and other products. The company has an integrated manufacturing facility for product packaging and labelling operations. It also commenced commercial production of plastic products for the pharmaceutical industry in June 2024.
The scrip fell 1.38% to currently trade at Rs 161.05 on the BSE.