Uflex (500148) Q1 24/25 earnings summary

Executive summary

• Q1 FY2025 saw strong growth in packaging films and solutions, with significant price increases in BOPET (up 30%) and BOPP (up 18-19%), robust PET chips plant ramp-up in India (65% capacity), and record aseptic packaging output, setting a bullish tone for the year.

• Consolidated revenue from operations for Q1 FY25 was ₹365,375 lakhs, up 12% year-over-year and 7% sequentially, with sales volume reaching 158,022 MT (+10.4% YoY).

• Strategic projects in Egypt, Mexico, and India, along with sustainability and circularity initiatives, are expected to drive future growth.

• Net loss after tax for Q1 FY25 stood at ₹9,843 lakhs, showing improvement from previous quarters despite ongoing exchange losses and a tax dispute.

• Aseptic packaging achieved record production and sales, with 120% capacity utilization and 38% of sales exported.

Financial highlights

• Normalized EBITDA for Q1 was INR 465 crore, with consolidated EBITDA margin improving to 12.6% (normalized), up 283bps YoY.

• Consolidated revenue for Q1FY25 was Rs. 36,825 Mn (+5.3% QoQ, +12.3% YoY); normalized PAT stood at Rs. 823 Mn (2.2% margin), adjusted for Rs. 1,808 Mn exceptional loss from currency devaluation.

• Exceptional items for Q1 FY25 included exchange losses totaling ₹18,075 lakhs, mainly from Egypt, Nigeria, and Mexico.

• Sales volume reached 158,022 MT (+10.4% YoY), with packaging films up 13% YoY and packaging up 2.5% YoY.

• Net debt increased to Rs. 56,675 Mn as of June 2024.

Outlook and guidance

• Management raised EBITDA guidance for FY2025 by 10% from INR 2,000 crore, reflecting improved pricing and expected volume growth.

• Several key projects to be commissioned in FY25: 216,000 MTPA PET chips plant in Egypt, 18,000 MTPA CPP line in Mexico, and Sanand plant debottlenecking in India.

• Anticipates significant revenue and profitability growth from recycled plastics as new regulations take effect from April 2025.

• Management remains confident that no material tax liability will arise from ongoing tax proceedings.

• Continued margin improvement expected if current price trends persist, with further upside from new capacity ramp-ups and regulatory tailwinds in recycling.