Manika Plastech

Manika Plastech

By Geetanjali Kedia
about 1 day ago

IPO Size: Rs. 125 cr

  • Fresh Issue of Rs. 93 cr (18% dilution) for (i) capex Rs. 55 cr (ii) repaying Rs. 15 cr of Rs. 61 cr gross debt as of 31.7.26
  • Offer for Sale (OFS) of Rs. 33 cr by promoter (100% to shrink to 75%)

Price band: Rs. 40-43 per share

M cap: Rs. 501 cr (IPO is 25% of m cap)

IPO Date: Fri 11th Sep to Wed 16th Sep 2026, Listing Mon 21st Sep 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Rigid Polymer Packaging Company

Manika Plastech is a 27-year-old Silvassa based manufacturer of battery casings, pails, thin-wall containers, having 6 plants with aggregate installed capacity of 29,200 MTPA and 80% utilised. Company supplies this packaging material the auto, paint, food, chemicals sectors.

 

IPO to fund Capex

Company is undertaking Rs. 59 cr capex, of which Rs. 55 cr will be funded via IPO proceeds, to augment installed capacity by 30% to 38,000 MTPA. On close to 3x fixed asset turn, incremental topline from this capex is about Rs. 175 cr.  

 

Main Product not Growing

FY26 revenue stood at Rs. 436 cr, with half of the revenue from single product segment battery casings. However, battery casing sales have been flat for the past 4 years, Rs. 247 cr in FY22 and Rs. 246 cr in FY26! Key product not growing limits company’s overall revenue CAGR to only 7% between FY22 to FY26, on 8% volume growth during the same period.

 

Q1FY27 Margin spurt looks Temporary

For FY26, company’s EBITDA stood at Rs. 58 cr, leading to 13% EBITDA margin. On PAT of Rs. 22 cr, net margin was Rs. 5.1%, leading to an EPS of Rs.2.36, on equity of Rs. 19 cr (FV Rs. 2 each).

For Q1FY27, revenue stood at Rs. 162 cr, with EBITDA of Rs. 24 cr (15% margin) and PAT of Rs. 13 cr (8% net margin). While raw material cost is a pass through, Q1FY27 profits were elevated due to inventory gain on rising crude oil prices, on account of timing issue in pass-through. Average realization jumped to Rs. 277 per kg in Q1FY27 from Rs. 207 per kg in FY26. Thus, it may be imprudent to annualize Q1FY27 earnings, as Q1FY27 spurt may be evened out in subsequent quarters.

On a net worth of Rs. 157 cr, company’s gross debt of Rs. 61 cr as of 31.7.26, is rated BBB+. Post IPO, the net debt to equity ratio will be 0.2:1.

 

Attractive Pricing

M Cap of Rs. 501 cr and enterprise value of Rs. 547 cr lead to a current year PE multiple of 12x, on FY27E estimated EPS of close to Rs. 3.6. This is attractive in relation to larger peers:

  • EPL Limited has a PE of 18x on 20% EBITDA margin and Rs. 5,000 cr topline
  • Mold-Tek Packaging’s PE is 25x for 19% EBITDA margin and Rs. 1,000 cr topline

While Manika’s IPO PE is attractive, historically revenue flat from main product, sustainable net margin of 5% and 16% RoE are likely to keep PE multiple in the mid teens only, over the long term.