Uflex (500148) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue rose 6.5% YoY to INR 3,922 crore, with packaging volumes up 11.7% and packaging film volumes up 6.8% YoY, despite tariff and consumer sentiment headwinds.

• PET resin plants in India and Egypt achieved 97% and 75% capacity utilization, respectively, with new PET chips plants commissioned.

• Strategic focus on operational enhancement, innovation, and sustainability, including major capacity expansions in Egypt, India, and Mexico.

• Board approved unaudited standalone and consolidated financial results for Q1 FY26, including subsidiaries and associates.

• Industry dynamics shifted after a major competitor's plant accident, improving demand-supply balance and margins.

Financial highlights

• Consolidated Q1 FY26 revenue reached Rs. 39,219 Mn (+6.4% YoY); gross margin was 12%, down from 12.7% YoY.

• Normalized EBITDA was Rs. 4,698 Mn (12.0% margin); normalized PAT stood at Rs. 580 Mn (1.5% margin), down YoY.

• No exceptional foreign exchange losses this quarter; instead, an exchange gain of ₹6,996 lakhs was recorded.

• CapEx of INR 2,000 crore approved, with INR 1,100 crore spent by June 30; Q1 FY26 capex was Rs. 4,117 Mn.

• Net debt increased to Rs. 73,055 Mn; net debt/EBITDA peaked at 4.1x, expected to decline below 3x as new projects contribute.

Outlook and guidance

• Aseptic Packaging expansion delayed, now expected to be commissioned in H2 FY26; full benefit to be realized from 2026 calendar year.

• FY26 Asepto volume guidance revised to 8.5–9 billion packs; film division expected to produce around 132,000 tons per quarter.

• New projects in aseptic packaging, WPP bags, and recycling are expected to drive topline growth and margin improvement from FY27 onward.

• New investments projected to add INR 3,000 crore in revenue and INR 600 crore in EBITDA at 85% utilization.

• Packaging sector outlook remains positive, supported by consumer spending and flexible packaging adoption.