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%), driving margin expansion and a bullish outlook.

• Consolidated revenue for Q1 FY25 was ₹365,375 lakhs, up 12% year-over-year and 7% sequentially, with both volume and margin improvements.

• PET chips plant in India reached 65% capacity utilization in its first quarter, selling 25,000 tons, and strategic projects in Egypt, Mexico, and India are set to drive future growth.

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

• Sustainability and circularity initiatives advanced, including PCR flexible packaging and renewable energy agreements.

Financial highlights

• Normalized EBITDA for Q1 was INR 465 crores, with a margin of 12.6%, and normalized PAT at Rs. 823 Mn, adjusted for Rs. 1,808 Mn exceptional currency losses.

• Currency translation losses totaled INR 180 crores (Rs. 1,808 Mn), mainly from Nigeria, Egypt, and Mexico.

• Annual EBITDA guidance raised by 10% from INR 2,000 crores, reflecting higher prices and expected volume growth.

• Net debt increased to Rs. 56,675 Mn as of June 2024, driven by higher working capital needs.

• Domestic revenue contributed 43-45.5%, international 54.5-57%; films accounted for 62-76.9% of revenue.

Outlook and guidance

• Key projects to be commissioned in FY25 include a 216,000 MTPA PET chips plant in Egypt, an 18,000 MTPA CPP line in Mexico, and Sanand plant debottlenecking in India.

• Management expects continued margin improvement if current price trends persist and anticipates demand revival in packaging films globally.

• Recycling and PCR investments to benefit from new regulations effective April 2025, with significant revenue and margin potential.

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