Saturday, August 2, 2014

MOLD-TEK PACKAGING -MOVING INTO BIG LEAGUE ?



 
 










   



What is common in stocks like Hawkins India ,Cera Sanitary,Wimplast,Selan Exploration,Manjushree Technopack,RS Software ,TTK Prestige ..etc.The obvious answer from an ordinary retail investor may be – “ All these stocks turned as  multi baggers in past 2-3 years” . But for someone with some academic interest in stocks and spending some time to explore ,it is easy to find out the presence of a common name in the public share holding of all these stocks ie, the name of  Dolly Khanna.

Some high profile individual  investor’s are  equally interested in publicity and hence they are frequently appearing in TV interviews and celebrating their purchases through ‘Bulk Deals’ .But on the other hand  some are interested to hide behind curtain ,media-shy  and buying stocks in bit by bit to avoid any unnecessary publicity and market attention.Dolly Khanna belongs to second category and because of this reason ,frankly speaking I have not much idea about the whereabouts of this investor. But if we go through the history of shares owned by this investor ,it is clear that she/he is an investor with Midas touch and with special blessings to pick future multibaggers at an early stage. Having said ,since this investor buying without any publicity and in small lots it is difficult to get information about her/his activities in any stock at an early stage. But now ,this week let us look into one stock in which she entered only recently or may be still in the process of accumulating .As on latest June quarter share holding Dolly Khanna holding  123010 shares in Mold-Tek .This recommendation is not only due to the entry of this investor but taking into consideration of reasonable valuation based on its fundamentals and its potential.

Mold Tek Packaging

This Hyderabad based company is a market leader in Moulded plastic packaging and commanding close to 25% market share. Company mainly concentrating in manufacturing of Pails(cylindrical type  container) used in industries like Paints,Lubricants,food products..etc.This leakage free,easy to handle, and attractively decorated rigid plastic containers already dominated paint and Lubricant industry and replaced metal containers in these sectors.All major companies in these sectors are customers of Mold-Tek which includes Akzo Nobel,Berger, Kansai Nerolac, Castrol, Indianoil, HPCL,Shell,BP ..etc.In the rigid packaging space itself Mold Tek is the pioneer in  In-mould Labelling technology .This technology is used  for decorating plastic surfaces with color and labels to make it more attractive.As of now company manufacturing various products from its seven manufacturing facilities – 4 units in Andra Pradesh ,one each in Daman,Tamilnadu and Maharastra . Moldtek is the only molding company in the world having  in house mold designing mold making, IML label making and ROBOT making facilities.Company initially imported  robots from Taiwan and later started to build robots in-house for its use .A robot made by the company costs only one third of the cost of an imported robot  and its spped is higher than the imported robots.These robots are used in in-mould labelling (IML) process and by this company eliminates human intervention and contamination.( At least some of you may dreaming  Mold Tek as a commercial robot manufacturer too when there is shortage of workers in India few years down the line  - fine ) 

Company now aggressively tapping emerging opportunities from food and beverages sector . Small size IML decorated containers gaining acceptance in packing ice-creams and jams and company started supplying this products to  Vadilal,Amul and HUL..etc.. Due to attractiveness and easy to handle features more and more items from food segment may opt for this product in future.
 Conclusion

For the past many years ,Mold-Tek packaging was a company reporting decent growth but ignored by the market participants and always trades at  lower price earning multiple.There is no bad mark for the company management so far and they  handsomely rewarding its share holders with decent dividend without interruption.I believe ,entry of a highly successful  investor like Dolly Khanna will really change the image of this company and results in sharp re-rating in the years to come .The only negative point is its slightly higher debt with debt  equity ratio of over 1.3 . If its stock price reaches a decent valuation there is options for debt reduction through diluting some equity to investors at a premium. In FY 2013-14 ,Company reported a turnover of Rs.256 Cr ,net profit of Rs.9 Cr and an EPS of Rs.8  .In recent months company’s stock price appreciated  and it may be  due to overall improvement in small-caps and accumulation by the mentioned investor.But ,still this Rs.256 Cr turn over ,profit making  and dividend paying company is available at a market cap of less than Rs.90 Cr.Considering the potential of Industry,innovation led growth,decent management and possibility of a change in the image of company in market circles due to the entry of proven investor , risk takers may take some exposure in this indirect proxy of consumption theme  it at CMP of Rs.78


 Link to Company Website HERE


 Disc: It is safe to assume that I have vested interest in MPL

 



 



102 comments :

  1. Hello Sir,
    Good morning & God bless you with another feather of recommendation.I am of the opinion that you mentioned names of Dolly Khanna invested stocks except RS Software.You know she/he heavily invested in RS Software , even in month July 2014 Dolly has further invested in rs software.I know because of this remark, you may not publish my comment , but ok, it is upto you.My only intention was that let investors all know about dolly's portfolio including rs software too.thanks.

    ReplyDelete
    Replies
    1. Please read once again ,RS Soft also indicated there

      Delete
    2. Sir ji - You are right. RS Software mentioned....

      Delete
  2. Dear VPji,

    Once again thanks for your lovely recommendation. Its your effort for all small investors like us. Recently Dolly Khanna has invested in Premier Explosive too. What's your view on this company.

    Regards
    JD

    ReplyDelete
    Replies
    1. Current price of Premier Explosive is Rs.163

      I already recommended it at Rs.73 on the below link

      http://value-picks.blogspot.in/2012/07/premier-explosives-ltd-buy.html

      Delete
  3. Another great Value stock from VP sir. Will try in Monday preopen to catch this.... Kudos to you, Sir ji..

    ReplyDelete
  4. Hi VP, please share ur views on Uflex..another packaging company with small mkt cap of just 900 Cr odd..

    ReplyDelete
    Replies
    1. Not tracking Uflex mainly due to various allegations against its promoters .One sample in the below link

      http://indiatoday.intoday.in/story/noida-land-scam-up-exchief-secy-flex-chief-jailed/1/122399.html

      Delete
    2. Thank you VP

      Delete
  5. sir what is your views on liberty shoes after its results.......can it be bought at 270 for 1 year perspective.
    thank you

    ReplyDelete
    Replies
    1. No comments about time bounded investment in stocks.

      Delete
  6. I do not deny it is a good stock . But entering in a small cap at its all time highs when broader market pe is 21 is not encouraging . Just think of your recommendation on tcp packaging , it remained at a range of 38-42 for whole three years after your recommendation at 55 . Possibly side effects of modi-euphoria just pushed the stock up three times in 3 months . I admit value investing requires patience .
    Do not consider my views as criticism .
    But i would rather wait at the cost of letting the opportunity escape .
    thanks

    ReplyDelete
    Replies
    1. I don't know why people always looking into market and saying like " Investing in Market" .I never advice anyone to invest in 'MARKET' at any time. You must look into companies and their businesses rather than the daily index movement . Let Index trade at 2, 20 or 200 PE .we need not bother about that .You mentioned about the spike in TCPL as the 'Mody Effect ' but forget to look into the back ground and realise what has happened in this company's fundamentals during this period . The basic assumption of stock market is - if a company perform continuously today or tomorrow investors will identify it and it will get deserving valuation. I am here only because of this belief and still believing in it .

      If you get a stock at lower valuation ,thats fine. But I will never compare stock fundamentals and business prospects with Index levels.

      Delete
    2. You are absolutely right VP. Only high beta stocks tend to trend with the index. The shares recommend by you are Value Buy stocks with Price to Earnings around or less than 10 and with high growth potential. Your judgement has proven right for long term. All the Best.

      Delete
    3. Broader Markets do play a major role in the movement of small caps . Only because of that a stock like tcp packaging remaining range bound for three years suddenly spurted . Where was the fundamental of the stock for last three years Last time in nov-dec 2010 nifty pe was 25 . your recommendation stocks like onward technology,gei industrial(rec at 170 now at 27). panacea biotec,royal orchid hotel,chembound,international travel house could not flourish .

      retail investor should understand the risk of investing in microcaps as it is tantamount to total erosion of their capital .

      Delete
    4. I never mentioned all of the stocks recommended by me gained irrespective of its fundamentals. But mentioned any stocks recommended whose fundamentals not worsened since recommendation ultimately rewarded.

      Delete
  7. Are not such stocks with a single large individual investor at risk for sudden drastic fall whenever the investor exits, leaving others in lurch? Shouldn't one be wary of such stocks?

    ReplyDelete
    Replies
    1. That depends on the smartness of the investor who exit and the valuation and future prospects of company.It seems Dolly Khanna exited from TTK Prestige few quarters back ,but nothing has happened

      Delete
  8. Dear VP,
    Dolly Khanna has also purchased additional 50, 000 shares in Nilkamal. Good things are expected here as well.

    Regards,
    Pratul

    ReplyDelete
  9. Thanks for your valuable . I have been an investor in this company since last six month. I would like to express my sincere thanks to you Because I applied your analysis method and I got experience to follow your blog since last 3 year. Your doing an unbelievable work to help small investors like me.
    Shaheer trissur
    .

    ReplyDelete
  10. Dear VP,
    Thanks for another multibagger. Since, now u r recommending only 2 stocks monthly, I would appreciate if you start (on other Saturdays) giving your advices / present ratings on your old recommendations. There are lot may near to buy level (say only 20 - 30% profit) and you are still recommending to buy. So that we can try at least your old pick (e.g. HEG, Managalam, V2 retail, etc.).

    ReplyDelete
  11. Sir,
    How do you see Hitech plast against MOLD-TEK PACKAGING. Hitech plast is also into similar kind of products

    ReplyDelete
    Replies
    1. Issue of Hitech plast is it is promoted by a co promoter of Asian Paints and supplying products mainly to Asian Paints itself .There may be chances for conflict of interest an lower margin.

      Delete
  12. Hi VP,

    You mentioned about the debt being excessive? Are you overly concerned about the high debt OR you are relatively comfortable with it?

    ReplyDelete
    Replies
    1. It is about Rs.66 Cr ,which is not alarming

      Delete
  13. Sir...To me & all you followers, you are a step above to Dolly Khanna. Not just for your proven investment acumen but also for you service to the shareholding community. Although I have not invested into a single stock that you have mentioned, I am rigorously following your blog for past 6 months at least.

    ReplyDelete
    Replies
    1. Please don't compare Elephants with ant(me)

      Delete
  14. Thank VP Ji,

    Taking consideration the past performance and its mode of business, its seems there is tremendous potential growth for the product in future not only in domestic but also in overseas especially in dairy product where the consumption is on daily basis. but all depends upon the Management approaches.

    ReplyDelete
  15. Sir your view on nilkamal results?home furniture segment loss has doubled

    ReplyDelete
    Replies
    1. Purely on Valuation basis stock is not expensive even after considering the published result.But some knee jerk reaction is possible.

      Delete
  16. Sir, pls your view on moldtek technologies sir. Pls reply without deleting the post sir. Thanks in advance

    ReplyDelete
    Replies
    1. Mod Tek packaging is a market leader in its industry where Mold Tek Technology is a small player in It industry. Not tracking that company.

      Delete
  17. dear sir,
    could you recommend stocks which have a circuit limit of 5%. Of late you recommend stocks with 20% limit. On monday people will buy that stock after it has already appreciate 20%. Next day then it will rise only 4-5% because it has already exhausted its potential rise. It happened in MM Forgings, Capital First and Kopran. Your Dion Global was a 5% stock and it nicely went up over 30-40% at a 5% spped daily giving every investor to get in and make some profit.
    So kindly consider this request and recommend more 5% circuit limit stocks.
    Regards
    Your devotee

    ReplyDelete
    Replies
    1. Dear Friend

      Nobody is compelling to buy any particular stocks .None of my stock suggestions are for buying blindly. You should study the companies and decide whether it is suitable to you and upto what price .If if it available below that price otherwise leave it.No meaning in taking circuit filter as a bench mark for stock selection .

      Delete
  18. Dear VPji

    I can't place orders on some BSE listed stocks which you are recommending. My broker says, for buying T-group shares I need to call their head office and place the order through their terminal. Can you suggest me a good stock broker with reasonable brokerage and services.

    pardon me, since the question is off topic. but according to me, you are the most reliable person to ask this.

    Thanks & Regards
    Deepak.

    ReplyDelete
    Replies
    1. You have a interesting broker.. y don't u shift to some renowned one ...hdfc icicidirect indiainfoline etc

      Delete
  19. Namastey VPji,
    One stock is really influencing me for the buy PRESSMAN advertising...look at the financials it looks strong...dividend of Rs. 1 is on the card for this year...good reputation of the promoters..they are in this field from last 50 years and they have a very good list of clients ...it is the only stock in the stock market...I just want ur view as I have no one on whom I m so confident ...so please take a look of this stock if u don't track it...I really want ur advice for this stock...

    ReplyDelete
    Replies
    1. Not sure about the scalability of this business beyond certain level.

      Delete
  20. Dear Deepak
    Try Geojit
    Yogesh

    ReplyDelete
  21. Hi Vp
    mod tek technologies has very low volumes and deliverable..whats ur view on this??

    ReplyDelete
    Replies
    1. Two week average volume is close to 1 lakhs per day .No meaning in expecting more than that from a small cap stock without any speculator's interest.

      Delete
  22. sir, always hold u and ur views in high esteem 1) What are ur views on LIC Housing Finance...I am stuck at 330, can I average 2) What about JMC Projects bought at 220....which I want to get out and get into some of your recommendations, but hesitant to book the huge loss

    ReplyDelete
  23. How abt KS Oils, is there any revival possible...in this now penny stock

    ReplyDelete
  24. Prajay is another Hyd company, I am stuck with few years now...and its down to naught from heady highs...any respite....or bettter to book loss and get out for life!

    ReplyDelete
    Replies
    1. Dr Reddy's is also a Hyderabad Company

      Delete
  25. sir ...what are ur views on shilpi cable please i am heavly invested in this kindly look at its numbers ...plz

    ReplyDelete
  26. dear sir,
    i know that you we not publish this
    on one side you are saying that i will give recmm now only after 15 days as i am not finding value against stock price
    on other side you are recmm stocks which is has one side run up in last 7 days
    hope u understand my words
    or i paste your link

    ReplyDelete
    Replies
    1. Sorry I could not understand anything

      Delete
    2. Dear VP Sir,

      Ignore these type of questions to answer. Waste of time and energy. He is a intraday trader. He will never understand like i bought Granules ur recommo price was 89 and i bought 115 now its cmp 639.

      Delete
    3. VP will buy stock. His group might be buying. So stock will up countinously.

      Delete
    4. No doubt ,If I find a stock worth buying and I have money to buy it I will surely buy . I don't think there is any meaning in recommending any stock to anyone If i feel the same is not worth buying for me .

      But the second part of your comment is absolutely false , I have no group or such arrangement to buy stock and rig or manipulate price .

      Delete
    5. Time and again why do these jokers keep posting, without even making an attempt to understand the investment rationale or study the stock.
      They need only tips and quick bucks without spending effort
      I believe its such a waste to respond to such childish messages.
      I wonder where do these people come from.

      Delete
  27. How was aksh optifiber results today express your view on same thanks

    ReplyDelete
  28. Hi Sir,

    Still i m holding Sequent Sci, Caplin Point, KSB Pumps & Avanti feeds @ very low price. Thank you for recommended such type of stock.

    Requesting you kindly put light on Capital First & Kirloskar Oil pressuming result/News.

    ReplyDelete
  29. Hello Sir,

    Your pick Avanti Feeds reported superb numbers & they have aggressive expansion plans over the next one year. Do you suggest making a fresh entry at current levels?

    Thanks!

    ReplyDelete
    Replies
    1. Stock already appreciate 1200 % from recommended level . Neutral at CMP

      Delete
  30. Dear Vp sir,
    Two of your recommended stocks Agl & Bilcare are shifting from T2t catagory to their original group from 6th Aug. Sir, i want to understand what are the circumstances in which regulator shifts a particular stock from Original group to T2t & vice versa?

    ReplyDelete
    Replies
    1. Details available in the following link

      http://www.bseindia.com/markets/equity/EQReports/sur_Price_monitoring.aspx?expandable=6

      Delete
  31. Sir please throw a light on Nandan Denim ... Plz suggest whether to hold or not as ur suggestions r truely valuable.... Thnx a ton.

    ReplyDelete
  32. Dear VP sir

    Requesting your views on Apcotex and SML Isuzu. Is there a long term value based play in these two scrips. Thanks

    Regards
    Shankar

    ReplyDelete
    Replies
    1. Both stocks recommended at lower level,one can hold.

      Delete
  33. Please your view upon kaushalya infra

    ReplyDelete
  34. Sir,
    What is your esteemed opinion on the prospects of Savita Oil Technologies Ltd.
    with regards

    ReplyDelete
    Replies
    1. Not a bad company ,but sensitive to crude oil price .Take decision after considering this point.

      Delete
  35. Dear VP,

    Your view on Motherson Sumi Systems if you are tracking it. TIA.

    Thanks

    ReplyDelete
    Replies
    1. Good to keep in a portfolio for long term

      Delete
  36. Dear VP
    What is your view on jai balaji industries?

    ReplyDelete
  37. Sir

    What about Nilkamal result ?

    ReplyDelete
  38. Hi Sir, How is Venus Remedies, Vivimed Labs and Indiabulls Power Limited for LT? Further, Can, I BPP @ IFGL..

    ReplyDelete
  39. Already commented about Nilkamal result on 2nd August ,above.

    ReplyDelete
  40. Sir,
    Do you track Kirloskar Pnuematic. Pl. comment

    ReplyDelete
    Replies
    1. Recommended @ Rs.402

      http://value-picks.blogspot.in/2010/03/kirloskar-pneumatic-strong-bet.html

      Delete
  41. Please your view upon orchid chemicals not performing well if any bad new for company pze reply

    ReplyDelete
    Replies
    1. This stock recommended @ Rs.49 on March 14,2004 .Now it is trading around Rs.75 which means a gain of 50 % in 4 months .From where you get 50 % gain in 4 months in a legal way ?

      Delete
  42. What about mirza international

    ReplyDelete
  43. Dear VP Sir,

    What is your view on JVL Agro industries ltd.

    ReplyDelete
  44. I have started following you recommendation recently.
    Stocks recommended by you hit upper circuit in next trading session after your recommendation.
    Would it be fine to buy the stock in next trading session after upper circuit? Kindly suggest how to go about buying after upper circuit .

    ReplyDelete
    Replies
    1. Never buy any stock only on my recommendation ,try to study the company and its business and arrive at a price upto where it is worth according to your risk profile.

      Delete
  45. Wow- it seems people ask more about other stocks rather than try to study in detail the stock recommeded by VP and add value to the discussion. Was hoping to get some more insights into the firm recommeded here. Thanks VP, Enjoy reading your blog and value the insights and research.

    ReplyDelete
  46. How do you VP and other guys decide on the volume of investment...is it entirely based on your risk profile and/or there are other factors you consider.

    For eg. If I consider my risk profile and my income levels I would only invest about 50-60k per company but not more. However, this way I feel that I miss good opportunities and cannot/would not be able to create a sizeable portfolio despite picking winners. As in I feel that the bottle neck more often than not turns out to be the size of holding.

    Would lie to learn about other ways to increase volume without significantly impactin risk profile or waiting too long to build corpus large enough to increase per transaction holding.

    Thanks in advance for your views and positive comments.

    ReplyDelete
  47. Sir, any views on India bull real estate. Dish tv?

    ReplyDelete
  48. VP there is another stock with name listed as Mold Tek Technologies, am sure you would know about this. It's listed at lesser price than Mold-Tek Packaging, can we go for this as an alternative to invest too.

    ReplyDelete
  49. sir,

    i scanned ur past 2 years recom.most of the successful stocks starts their journey 3-4 bfor.i.e just bcos of moddy effect. otherwise !!!! ???

    ReplyDelete
    Replies
    1. Then it is better to wait till some another "Effect" starting and jump into it just before the same starting ...

      Delete
    2. This comment has been removed by a blog administrator.

      Delete
    3. Himalayan blunder of 2014. Properly not tracking this site. Please avoid below par comments.

      Delete
  50. Hi Sir,
    Thanks for your greet recommendations always..

    Sir what is your view on Plastibends and Shirpur Gold Refinary..

    ReplyDelete
    Replies
    1. Dear sir plz reply. .

      Delete
  51. HI VP,
    In ur recommndation on Aug 2 u have mentioned the Mold Tek Packaging CMP @78, but it was actualy 43.3???

    ReplyDelete
    Replies
    1. This is the issue happening to those who are not even ready to read the entire posting but jumping into it just reading the heading. I recommended Mold Tek Packaging and Not Mold Tek Technology.

      Delete
  52. Requested to start the paid services. As all most all the stocks recommend by u. Are on upper circuit limit for 5 to 6 trading days. And no investor can have chance to earn money at this rate.. so hope u can consider the thing

    ReplyDelete

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