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1 BUY CMP (Rs) Target Price (Rs) Potential Upside Sensex Nifty % 31,191 9,637 Key Stock data BSE Code NSE Code Bloomberg Shares o/s, Cr (FV 5) Market Cap (Rs Cr) 3M Avg Volume 52 week H/L MOLDTKPAC MTEP:IN , /154.5 Shareholding Pattern (%) Sep-16 Dec-16 Mar-17 Promoter FII DII Others Year relative price performance Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Packaged for growth... Established in 1986, (MTPL) is the leader in rigid plastic packaging in India. It is involved in the manufacturing of injection molded containers for lubes, paints, food and other products. MTPL has seven processing plants and three stock points spread across India to ensure faster supplies. It has a huge injection molding capacity of around ~30,000 TPA. Investment rationale MTPL entered the food & FMCG industry in FY16 and thus has insignificant revenue from the particular segment, as majority of the food & FMCG manufacturers' use flexible packaging. However, rigid packaging is now increasingly being used for food and FMCG products and MTPL has been in talks with many companies like Patanjali, HUL, Dabur, ITC, etc. It is already making some products for Cadbury, P&G, Amul, etc. MTPL is setting up two new plants at Vizag (Andhra Pradesh) and Mysore (Karnataka) for Asian Paints to cater to its rising demand for paint pails. It has already procured the land and construction activity is expected to start in Q2FY18E. Both the plants will have an initial capacity of 3,000 tonnes each and are expected to become operational in H2FY19E. With commercial operations expected to start in H2FY19E, we expect the plants to generate healthy revenue from FY20E. In November 2016, MTPL started a new facility in RAK (Dubai) to expand its geographical presence and cater to the Middle East and North African markets. The annual capacity of RAK plant is close to 3,000 tonnes. The company is aiming to utilize 70-75% of its capacity in FY18E, which would provide higher realisation at higher capacity utilisation. It is already receiving orders from paint, lube and dairy industries in the Middle East and is talks with various companies for further orders. Mold-Tek is an integrated company which has introduced certain world class packaging products in India for paints, oil, lubricants, food and FMCG industries through continuous innovation. Over the years, it has been able to innovate and develop advanced technology like in house robots, which are half the cost of imported robots. Outlook & Valuation As per FICCI, the Indian Industry is estimated to grow at a CAGR of 18% over FY15-20E, with flexible packaging estimated to grow by 25% and rigid packaging by 15%. Mold-Tek manufactures and supplies pails for paint and lube industries and packaging containers for food and FMCG industries. The company has been focusing on the new growth sector i.e. Food and FMCG segment. We believe growth will come from these segments, while Paint and Lube will continue to remain steady. With the strong growth trajectory of the Indian economy, we expect the company to report Revenue and Net profit CAGR of 20% and 24% respectively over FY17-19E. Considering strong balance sheet, robust return ratios, low debt and proactive management, we recommend a Buy on the stock with a target of Rs Mold Tek Ni y Financial Summary Particulars, Rs cr Net revenue FY15 FY16 FY17 FY18E FY19E Research Analyst Ajay Pasari, CFA ajay.pasari@religare.com EBITDA OPM (%) Adj PAT PATM (%) EPS, Rs RoE (%) P/E (x) June 7, 2017

2 Entry in Food and FMCG segment to drive healthy revenue growth in the coming years Investment rationale Focus on Food and FMCG segment to aid revenue growth Mold-Tek derives its revenue from segments including paints, lubricants, food and FMCG products. It manufactures and supplies pails for paint and lube industries and packaging containers for food and FMCG industries. For FY17, the segmental revenue was paint contributing 62%, lube 33%, while food and FMCG contributed 5% to the total topline. The company entered the food and FMCG industry in FY16 and thus has insignificant revenue from the particular segment, as majority of the food and FMCG manufacturers use flexible packaging. However, rigid packaging is now increasingly being used for food and FMCG products and MTPL has been in talks with many companies like Cadbury, Amul, Patanjali, HUL, Britannia, Dabur, ITC, Haldiram, etc. It is already making some products for Cadbury, P&G, Amul, etc. The management is aiming to increase the revenue share from food and FMCG segment to 15-18% of the total sales in the next few years (from 5% in FY17). The size of the Indian food and FMCG industry is enormous, which offers immense potential to MTPL for significant growth in the coming years. The demand for ready to eat and take away food is on the rise and companies are readily paying a bit more to improve its shelf life and packaging, which also improves brand image of the companies. With rising consumer income, changing lifestyle and increasing number of working women, we expect the demand for packaged food and FMCG products to remain strong. We expect MTPL to generate healthy revenue from food and FMCG space with increasing use of rigid packaging in the packaged food industry. Segmental revenue : FY17 5% Segmental revenue : FY19-20E 18% Revenue share from Food and FMCG segment is expected to increase from 5% in FY17 to 15-18% in the next few years 33% 62% 26% 56% Paint Lube Food and FMCG Paint Lube Food and FMCG

3 Revenue from paint and lube segments t o g r o w a t % a n d 5-8 % respectively in the coming years Rigid packaging industry to grow at 15% in the coming years As per FICCI (Federation of Indian Chambers of Commerce and Industry), the Indian Industry is estimated to reach $72.6bn by FY20 (CAGR of 18% over FY15-20), with flexible packaging estimated to grow by 25% and rigid packaging by 15%. India's low per capita packaging consumption (at 4.3 kgs) compared to developed countries like Germany (42 kgs) and Taiwan (19 kgs) leaves significant headroom for growth in the coming years. As per industry data, paint industry is expected to grow at 1.5-2x of GDP in the next 5 years. We expect Indian paint industry to grow at a healthy rate, in tandem with GDP growth. Increasing urbanization, growth in real estate, thrust on affordable housing will be key growth drivers for the paint industry. MTPL derives ~62% revenue from making pails for the paint industry. Its major clients include Asian Paints, Berger Paints, Kansai Nerolac, Akzo Nobel, etc. We expect the company to report revenue growth of 12-15% from the paint industry. MTPL also manufactures lube pails for Castrol, Shell, Gulf Oil, etc., which contributes 33% to its topline. The company supplies majority of Castrol India and BP s pail requirements. Recently it bagged contracts of exclusive supply to Shell and Exxon Mobil for a period of 5 years. Growth in lubricant volumes is directly co-related to growth in auto volumes and IIP. The Indian lubricant market underperformed over FY12-15, impacted by showdown in the GDP, automotive, infrastructure and industrial segments, however gradual recovery was seen in FY16 and FY17 until demonetization hit the auto industry in H2FY17. We feel that the lubricant industry is set to witness a turnaround over the next two to three years on the back of an anticipated revival in the autos and GDP/IIP cycle. We expect the Auto sector to witness a healthy growth, led by a decline in interest rates, cooling inflation, revival in the Capex cycle, and resuming of mining activities. We expect MTPL to report revenue growth of 5-8% from lube paint segment. Industry to grow at CAGR of 18% over FY15-20E CAGR 18% Indian packaging industry is expected to grow at CAGR of 18% over FY15-20E, with rigid packaging to grow at 15% $31.7 bn $72.6 bn FY15 FY20E

4 MTPL is setting up two new plants for Asian Paints, which are likely to get operational in FY19E New plants addition for Asian Paints will increase revenue from paints segment MTPL manufactures and supplies paint lubes to paint companies namely; Asian paints, Berger Paints, Akzo Nobel and Kansai Nerolac. The paint lubes are its major revenue generating product accounting for ~62% of its total revenue. The company caters to ~20% of the total pail requirements of Asian Paints, 30-35% of Kansai Nerolac and 60-65% of Akzo Nobel. MTPL is setting up two new plants at Vizag (Andhra Pradesh) and Mysore (Karnataka) for Asian Paints to cater to its rising demand for paint pails. It has already procured the land and construction activity is expected to start in Q2FY18E. Both the plants will have an initial capacity of 3,000 tonnes each and are expected to become operational in H2FY19E. The total investment for both plants would be close to Rs cr including the cost of land. With commercial operations expected to start in H2FY19E, we expect the plants to generate healthy revenue from FY20E. Also in phase II, the capacity of the said plants can be doubled depending on the demand scenario from Asian Paints. The two plants have the potential to generate revenue of ~Rs. 300 cr over FY19-22E. Currently the company meets 20% of Asian Paints total requirements. However with two new plants, it can increase its share to 23-25% in the coming years. New facility in Dubai to increase revenue and margins in the coming years Higher realizations from RAK facility at optimum capacity utilisation In November 2016, MTPL started a new facility in RAK (Dubai) to expand its geographical presence and cater to the Middle East and North African markets. The annual capacity of RAK plant is close to 3,000 tonnes. The company is aiming to utilize 70-75% of its capacity in FY18E, which would provide higher realisation at higher capacity utilisation. It is already receiving orders from paint, lube and dairy industries in the Middle East and is talks with various companies for further orders. For instance, it is in talks with a company for hair cream and other containers. RAK facility offers higher margins compared to Indian facilities due to lower material cost, better realizations and no income tax on earnings being a SEZ. Thus the overall profitability is expected to improve marginally (~0.5% operational margin) with revenue generation from RAK plant. We expect the company to benefit from increasing clientele and geographic presence, which can also aid its exports to other markets from its RAK facility. Apart from this, MTPL is also planning to set up a new plant in Gwalior to cater to the North Indian region. Revenue to grow at CAGR of 20% over FY17-19E led by healhty growth from Food and FMCG segment % 2% 25.0% 2% % 11.8% 15.0% 25 1% % % FY15 FY16 FY17 FY18E FY19E % -5.0% Revenue- Rs. Cr (LHS) Growth % (YoY) - (RHS)

5 Revenue growth from RAK facility to improve OPM% Higher revenue & capacity utilisation to improve PAT% Revenue from RAK facility to improve operational margin by ~0.5% due to better realisations, lower material cost and no income tax, being a SEZ % 16.6% 16.5% 16.7% 14.0% FY15 FY16 FY17 FY18E FY19E 18.0% 17.0% 16.0% 15.0% 14.0% 13.0% 12.0% % % 8.6% % 5.9% FY15 FY16 FY17 FY18E FY19E 1% 9.0% 8.0% 7.0% 6.0% 5.0% EBITDA- Rs. Cr (LHS) EBITDA % (RHS) PAT- Rs. Cr (LHS) PAT % (RHS) Increasing profitability to improve ROC% Increasing profitability to increase ROE% Return ratios to increase and remain healthy due to increasing profitability 3% 29.0% 28.0% 27.0% 26.0% 25.0% 24.0% 23.0% 29.1% 25.8% 26.0% 25.3% 24.7% FY15 FY16 FY17 FY18E FY19E 23.5% 23.0% 22.5% 22.0% 21.5% 21.0% 20.5% 2% 19.5% 19.0% 23.0% 20.9% 20.1% 19.7% 19.5% FY15 FY16 FY17 FY18E FY19E ROC % ROE % MTPL is a pioneer in innovation and adopting latest technology, which has enabled the company to develop inhouse inmold labels and robots Integrated facilities with advanced technology and constant innovation Mold-Tek is an integrated company which has introduced certain world class packaging products in India for paints, oil, lubricants, food and FMCG industries through continuous innovation. The company decorates products using screen printing, heat transfer labeling and in-mold labeling, which is one of the modern and premium container decoration techniques globally. In late 2011, the company started developmental work on IML manufacturing through imported labels and robots. Later it developed technology to manufacture 'Inmold Lables' (IML) and 'Robots' on its own. Being an early adopter of IML technology, MTPL quickly realized the benefits of in-mold labeling extending across multiple areas of the business, from enhanced design options and message durability to manufacturing efficiency and improved supply chain management. In-mold technology enabled a significant shift in the labeling and decoration of plastic products as parts were now removed from the injection mold fully decorated, manufacturers eliminated additional costly and time consuming post process decoration. Not only did this technology remove the necessity for a separate process, but it allowed the company to move this entire process to their injection molder, thus saving time and cost. As a result, MTPL's percentage of IML sales has gone up from 29% in FY15 to 50% in FY17, which we expect to increase further in the coming years. The company is developing various products centric IML packaging for various food and FMCG clients. Its plants are strategically located near its customers manufacturing facilities, which reduces transportation cost and helps in maintaining low inventory levels. Over the years, it has been able to innovate and develop advanced technology like in house robots, which are half the cost of imported robots. As it design, maintain & manufacture its own molds as well as robots, it gives it an edge over its competitors. MTPL is now creating 3D robots for oxygen and moisture barrier IML, which will further add to its product categories of value added products.

6 Company background Established in 1986, (MTPL) is the leader in rigid plastic packaging in India. is involved in the manufacturing of injection molded containers for lubes, paints, food and other products. MTPL has seven processing plants and three stock points spread across India to ensure faster supplies. It has a huge injection molding capacity of around ~30,000 TPA. As a pioneer and innovator of pail packaging in India - Mold-Tek has introduced spouts and In-Mold spout concepts for the paint and lubes pails. It offers range of decorating processes and product sizes to cater to the needs of clients. Mold-Tek has a state of the art In House Tool Room with sophisticated Swiss and German machinery to design & produce complex molds and capable of making in house Robots. It was the first company to develop IML decorated packaging in India. MTPL's clientele includes some of the most prominent names in paints, lube, food and FMCG industries. It also exports its products to UAE, Singapore, Malaysia, Nepal and Bangladesh. Paint Industry clientele Lubricant Industry clientele Food and FMCG Industry clientele

7 Plastic packaging industry The Indian packaging industry, which constituted ~4% of the global packaging industry, was valued at over $31.7bn in FY15. The industry is characterized by a few large manufacturers with a nationwide presence along with a large number of small players in the unorganized sector with a regional presence (>50% of the packaging market is unorganized). While rigid packaging constitutes nearly 75-80% of the total packaging in India, flexible packaging comprises 20-25%. The Industry grew at a CAGR of 15.7% over FY10-15, largely driven by sectors like food processing (largest user of flexible packaging, accounting for more than 50% of the total demand) and pharmaceutical. The large and growing Indian middle class, along with the growth in organized retailing in the country continue to fuel the growth in the Indian packaging industry. As per FICCI (Federation of Indian Chambers of Commerce and Industry), the Indian Industry is estimated to reach $72.6bn by FY20 (CAGR of 18% over FY15-20), with flexible packaging estimated to grow by 25% and rigid packaging by 15%. India's low per capita packaging consumption (at 4.3 kgs) compared to developed countries like Germany (42 kgs) and Taiwan (19 kgs) leaves significant headroom for growth in the coming years. Risks Mold-Tek is primarily engaged in rigid packaging. Thus rising pace of flexible packaging and customers shift from rigid to flexible packaging can impact its revenue and earnings. The company has planned to set up two facilities in the next calendar year to cater to the rising demand from its major client Asian Paints. Any material changes in its client's operations or planning can adversely impact MTPL's operations and potential revenue from these plants. MTPL has started a new facility in RAK (Dubai) to target Middle East and North African customers. It also exports its products to countries namely; UAE, Singapore, Malaysia, Nepal and Bangladesh. Thus it will be impacted by adverse forex movement as well as demand scenario from these countries.

8 P&L Account Particulars, Rs cr FY15 FY16 FY17 FY18E Net revenue FY19E Expenditure Raw material consumed Employee cost Other expenses Total expenditure EBITDA OPM (%) Other income Depreciation PBIT Interest expenses PBT Exceptional items Tax Tax rate % PAT PATM (%) EPS

9 Balance sheet Particulars, Rs cr FY15 FY16 FY17P FY18E Share Capital Reserves & Surplus Total Shareholder's Fund FY19E Non-Current Liabilities Long term borrowing Deferred tax liability Other long term liabilities Long term provision Current Liabilities Short term borrowing Trade payables Short term provisions Other current liabilities Total liabilities Fixed Assets Non Current investment Long Term loans & advances Other non-current assets Current Assets Inventories Trade receivables Cash & Cash equivalents Short term loans and advances Other current assets Total assets

10 Cash Flow statement Particulars, Rs cr FY15 FY16 FY17P FY18E Profit Before Tax Add: Depreciation Add: Interest cost Op profit before working capital changes Changes In working Capital Direct taxes Cash Flow From Operating Activities FY19E Cash Flow from Investing Activities Purchase of Fixed assets Sale of Fixed assets Net proceeds from Investment -0.4 Cash Flow from Investing Activities Cash from Financing Activities Proceeds from issuance of shares Net proceeds from borrowing 15.1 Dividend (incl dividend tax) Interest cost Others Cash Flow from Financing Activities Net Cash Inflow / Outflow Opening Cash & Cash Equivalents Closing Cash & Cash Equivalent

11 Key Financial ratios Particulars FY15 FY16 FY17P FY18E Dividend per share Rs Dividend Yield (%) Payout % EPS Rs Book Value per share Rs FY19E Profitability Ratios EBITDA / Total income (%) PBT/Total income (%) NPM / Total income (%) ROCE (%) ROE (%) Liquidity ratios Debt-Equity Ratio Current Ratio Interest Cover Ratio Turnover ratios Total Asset Ratio Fixed Assets Ratio Debtors Velocity Overall (Days) Inventory (Days) Creditors Velocity (Days) Cash Conversion cycle GROWTH YOY% Sales Growth % Operating Profit % Net Profit Growth % VALUATION P / E Ratio P / BV Ratio EV / EBITDA

12 Before you use this research report, please ensure to go through thedisclosure inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 and Research Disclaimer at the following link : Specific analyst(s) specific disclosure(s) inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 is/are as under: Statements on ownership and material conflicts of interest, compensation Research Analyst (RA) [Please note that only in case of multiple RAs, if in the event answers differ inter-se between the RAs, then RA specific answer with respect to questions under F (a) to F(j) below, are given separately] S. No. Statement Answer Tick appropriate YES I/we or any of my/our relative has any financial interest in the subject company? [If answer is yes, nature of Interestis given below this table] I/we or any of my/our relatives, have actual/beneficial ownership of one per cent. or more securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance? I / we or any of my/our relative, has any other material conflict of interest at the time of publication of the research report or at the time of public appearance? I/we have received any compensation from the subject company in the past twelve months? I/we have managed or co-managed public offering of securities for the subject company in the past twelve months? I/we have received any compensation for brokerage services from the subject company in the past twelve months? I/we have received any compensation for products or services other than brokerage services from the subject company in the past twelve months? I/we have received any compensation or other benefits from the subject company or third party in connection with the research report? I/we have served as an officer, director or employee of the subject company? I/we have been engaged in market making activity for the subject company? Nature of Interest ( if answer to F (a) aboveis Yes :... Name(s)with Signature(s)of RA(s). [Please note that only in case of multiple RAs andif the answers differ inter-se between the RAs, then RA specific answer with respect to questions under F (a) to F(j) above, are given below] SS.No Name(s) of RA Signatures of RA Serial Question of question which the signing RA needs to make separate declaration / answer YES Copyright in this document vests exclusively with RSL. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose, without prior written permission from RSL. We do not guarantee the integrity of any s or attached files and are not responsible for any changes made to them by any other person. Disclaimer: