Brokerage house Sharekhan has put a  ‘buy’ on Mold-Tek Technologies for a target price of Rs 169. The company’s Apr-Jun 2008-09 revenues grew by 23.1 per cent year on year to Rs 33.9 crore. The plastic division’s revenues grew by 24 per cent to Rs 29.1 crore, while the KPO division revenues grew by 18.2 per cent to Rs 5 crore during the quarter.

The operating profit margin improved by 312 basis points to 16.1 per cent during the quarter on account of better profitability of the plastic division. The earnings before interest and tax margin of the plastic division improved by 10 basis points to 7.7 per cent during the quarter. Consequently, the companys’ operating profit grew by 52.6 per cent to Rs 5.5 crore during the quarter.

The interest and depreciation grew by 63.2 per cent and 20.6 per cent respectively during the quarter. In terms of taxes, the company did not provide for tax provision due to scheme of de-merger. Consequently, the company’s net income grew by 54.9 per cent to Rs 4.2 crore, which is in line with Sharekhan’s expectations.

Mold-Tek Technologies has announced that the high court of Andhra Pradesh has approved the de-merger of its structural engineering KPO operations and the plastic packaging product manufacturing division.

Mold-Tek is witnessing traction in its high-rise building business. The company has added two new clients in Canada and one client in Amsterdam. To cater to these clients and the potential new clients, the company plans to expand its HRB team from 50 members to 170 members. The company also plans to open new branch in Nasik and the revenues from this branch are expected to flow from Oct-Dec 2008-09.

Sharekhan has maintained earnings estimates for 2008-09 and 2009-10. At the current market price, the stock is trading at attractive valuation of 4.9x FY2009 earnings estimate and 3.7x FY2010 earnings estimate.