Moldtek Technologies

Mold Tek Technologies Q3FY24 – Concall

Why Growth was constant?

First two quarters there was a very good rush of projects and revenues by almost 60% this quarter also the number was stagnant. But growth has again stopped because one major project a US based project and the labor issues in US also has delayed the project implementation and they in turn delayed the project execution at MoldTek end.

That has resulted in again MES becoming flattish in this quarter which has grown rapidly in the previous 3rd Quarter. So that is one of the main reasons for our flat performance in this quarter.

As per the last call with the company they have updated last quarter that from February end they will be again starting up.

How growth can come?

However, the positive sign is we have added resources in fields of three segments which will be under marketing efforts now

A major project from one of the leading automobile companies in USA executed by a Mexican Tier-I contractor will open up in the middle of the second half of February and then the work may start from March.

The best and the worst part about Mold Tek Projects – They are full with projects but not

EBITDA Guidance

Maintaining an EBITDA margin in the region of 28 to 30 is possible going forward because this kind of uncertainty in MES will not be there in the next year as they are adding at least two to three new segments but the revenue growth will be from the Q1 itself.

Revenue Guidance

7% to 8% growth in the civil structural detailing, going forward the civil can improve at 7% into at least 12% to 15% next year given the traction now.

The next year onwards aiming at least 20% to 25% topline growth.

Company is expecting the new team could lead the revenue to 20% plus but still only confirm about 70-75% of business growth will be atleast 10-15% onwards.

While they are doubling sales team which will be able to make better utilization of the resources with the established credentials.

Now they are increasing by adding more number of clients.

Q3 could be the worst substantial cost and can be taken as benchmark for underutilization.

Other factors to consider

Hired 173 people with 45 lakhs payroll per month increased the cost and even 12-15 Senior level officers around 1.5 lakhs per month too, even new software led to increase in the depreciation and amortization cost too.

They are also going hard on M&A

For an investor questioning about previous guidance of 20% odd growth, the answer was their over expectation set them up wrong because of the flooded projects in H1FY24, which has gone down now and management is openly admitting that and now guiding around 10-15% growth.

Pardon me if there are any mistakes occurred by me while preparing this

Thanks,
Akash