Is Mold-Tek Packaging Under The Spell Of Dolly Khanna’s Magic Wand?

Dolly Khanna has always been a stock picker with a formidable reputation owing to the several super-duper multi-baggers to her credit. However, her recent incredible success in Avanti Feeds (643% YOY) and RS Software (420% YOY) have propelled her into a different league altogether.

Dolly’s modus operandi is that she works on each of the stocks in her portfolio, one or two at a time. After she got Cera Sanitaryware, Relaxo, Liberty Shoes, Nilkamal, Selan Offshore etc to give her the desired gains, she focused on Avanti Feeds and RS Software. Now that these stocks have also reached stratospheric heights, Dolly is probably looking for a fresh candidate to give her multi-bagger profits.

That candidate appears to be Mold-Tek Packaging.

Dolly quietly scooped up a chunk of 1,23,010 shares of Mold-Tek Packaging in the period from April to June 2014. It is no coincidence that in just the 3 months since then, Mold-Tek is already a multi-bagger with a 218% gain. In just the last month, Mold-Tek has given a return of 48%. The YOY gain is a mind-blowing 472%.

On top of these gains of 218% in 3M and 48% in 1M, the stock surged 5% today to breach the Upper Circuit at Rs. 189.

It appears quite clear that these explosive gains are the handiwork of Dolly Khanna’s magic wand and that more such gains are in store.

The best way to come to grips with the story behind Mold-Tek Packaging is to read the latest research report penned by Prashanth Tapse of Mehta Equities.

Prashanth Tapse points out that Mold-Tek is a market leader in “Pail Packaging” which are used by the Paint, Lubricant, Food, Pharmacy and Cosmetic industries. Mold-Tek is also a pioneer in “InMould Labeling” which apparently is attracting many paint, lube and food companies to become Mold-Tek’s customers. The “InMould Labeling” is likely to contribute significantly to the top and bottom lines of the Company in the near future opines Prashanth Tapse. He adds that Mold-Tek has ambitious expansion plans to meet the growing demand for its products.

Prashanth Tapse has given several other reasons in support of Mold-Tek Packaging. At the end, he advises a buy on the logic that there will be a huge demand for rigid plastic packaging in the retail space which Mold-Tek will be able to exploit. He also points out that Mold-Tek’s valuations at a PE of 11x FY15EPS of Rs 15.1 and 8x FY16EPS of 21.3 are quite reasonable when you consider its dominance in the market and growth prospects.

The best part is that Prashanth Tapse has foreseen a target price of Rs 280-300 for Mold-Tek Packaging, which works out to a gain of 58% from the CMP of Rs. 189.

Now, you have to decide whether you want to partner Dolly Khanna in Mold-Tek Packaging or remain a spectator.