UFLEX Limited — Q1 FY26 earnings call

Call held 18 Aug 2025

Management summary

Uflex reported a resilient Q1 FY26 with revenue growth driven by strong volume increases across packaging segments, despite a slight dip in EBITDA margins. The quarter was marked by changing industry dynamics due to an accident at a large competitor, leading to better margins post-event. The company is progressing with significant CAPEX plans for Aseptic Packaging, WPP bags, and a recycling facility, which are expected to contribute substantially to revenue and EBITDA from FY27, though some projects like Asepto expansion faced delays.

Highlights

  • Revenue for Q1 FY26 stood at ₹3,922 crores, marking a 6.5% increase year-on-year.

  • Overall sales volume increased by 7.9% YoY, with packaging volumes growing 11.7% and packaging films volumes up 6.8%.

  • Liquid Packaging volumes demonstrated strong growth of 18% YoY, while Flexible Packaging volumes grew 7.4% YoY.

  • EBITDA margin for the quarter was 12%, a slight decrease from 12.7% in the same period last year.

  • PET resin production in India achieved 97% capacity utilization, and Egypt reached 75% capacity utilization.

  • The company reported no exceptional losses for foreign exchange in Q1 FY26, compared to ₹180 crores in the prior year.

  • New investments are projected to add ₹3,000 crores in additional revenues and ₹600 crores in EBITDA at 85% capacity utilization.

Key financials

  1. Revenue ₹3,922 Cr +6.5%YoY
  2. Sales Volume Increase 7.9%
  3. EBITDA Margin 12%
  4. Exceptional Losses (FX) ₹0 Cr

What they filed

Q1 FY27: revenue up 37.6%, net profit up 629.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,833 3,735 3,814 3,901 3,832 −0%3,612 −3%4,056 +6%5,366 +38%
EBITDA392 454 410 454 386 −2%436 −4%584 +42%889 +96%
Net profit-65 137 169 58 27 +142%36 −74%196 +16%423 +629%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Packaging
    11.7% Volume Increase
  • Packaging Films
    6.8% Volume Increase
  • Liquid Packaging
    18% Volume Growth
  • Flexible Packaging
    7.4% Volume Growth
  • Holographic Films
    -5% Volume Degrowth
  • PET Resin Production (India)
    97% Capacity Utilization
  • PET Resin Production (Egypt)
    75% Capacity Utilization

Guidance & targets

Capacity

  • Aseptic Packaging Capacity Expansion (Egypt) Capacity · FY26 · High confidence 12 billion packs
    The Aseptic Packaging greenfield expansion of 12 billion packs at Egypt is also likely to get commissioned in FY26.

    — Rajesh Bhatia, Group President & CFO

  • WPP Bags Commissioning Capacity · FY26 · High confidence advanced stage
    so is the WPP bags which are used for the Pet Food industry, is also at an advanced stage of commissioning.

    — Rajesh Bhatia, Group President & CFO

  • Recycling Facility (Noida) Commissioning Capacity · FY26 · High confidence commissioning
    And then we have final one, which is our recycling facility in Noida, where we are expecting that given the government initiative that 30% of the recycled content in the Rigid Packaging and 10% in the Flexible Packaging, so that recycling capacity will come very handy to take care of the requirement of the products emanating from this government guidelines.

    — Rajesh Bhatia, Group President & CFO

  • Capacity Utilization for New Investments Capacity · FY27 · Medium confidence 85%
    at a reasonable 85% capacity utilization levels

    — Rajesh Bhatia, Group President & CFO

Revenue

  • Additional Revenues from New Investments Revenue · FY27 · Medium confidence ₹3,000 crores
    And by a reasonable estimate, we expect that these can add up to Rs.3,000 crores of additional revenues at a reasonable 85% capacity utilization levels

    — Rajesh Bhatia, Group President & CFO

  • Revenue Growth Revenue · FY26 · Medium confidence 10%
    we have given guidance that revenue will be increased by 10%

    — Rajesh Bhatia, Group President & CFO

Profitability

  • Additional EBITDA from New Investments Profitability · FY27 · Medium confidence ₹600 crores
    and should give us at about Rs.600 crores of EBITDA because here we are talking about Aseptic, we are talking about WPP bags, we are talking about the recycling business, which are likely to generate a higher EBITDA than

    — Rajesh Bhatia, Group President & CFO

  • EBITDA Profitability · FY26 · Medium confidence ₹2,100 crores

    Previously ₹1,900 crores → ₹2,100 crores

    our approx. EBITDA last year was Rs. 1,900 crores, this year it will be approx. Rs. 2,100 crores.

    — Rajesh Bhatia, Group President & CFO

Capex

  • Total Approved CAPEX Capex · FY27 · High confidence ₹2,000 crores
    the total amount is about Rs.2,000-odd crores

    — Rajesh Bhatia, Group President & CFO

  • Balance CAPEX to be Spent Capex · current year + Q1 FY27 · High confidence ₹900 crores
    balance Rs.900 crores is what is expected to be spent in the current year as well as in the Q1 of FY27.

    — Rajesh Bhatia, Group President & CFO

Volume

  • Asepto Total Volumes Volume · FY26 · Medium confidence 8.5-9 billion packs

    Previously 10 billion packs → 8.5-9 billion packs

    Asepto, we had earlier given a guidance of about 10 billion packs. So, in the Q1, we have achieved about 2.3 billion packs, which is April, May, June. So, I think we will look at somewhere between 8.5-9 billion packs now.

    — Rajesh Bhatia, Group President & CFO

  • Film Division Total Production Volume Volume · per quarter (FY26) · Medium confidence 132,000 tons
    Somewhere around 132,000 tons per quarter.

    — Rajesh Bhatia, Group President & CFO

Debt

  • Net Debt-to-EBITDA Peak Debt · FY26 · Medium confidence 4.1

    From 3.90 today

    Yes, so 4, maximum it will be 4.1.

    — Rajesh Bhatia, Group President & CFO

  • Net Debt-to-EBITDA Post New Projects Debt · FY27 · High confidence under 3
    then with the new projects getting commissioned and the revenues and the profitability kick-in, we will surely be under three.

    — Rajesh Bhatia, Group President & CFO

Margin

  • BOPP Margin over Raw Material Cost Margin · Q1 FY26 · High confidence 35%
    BOPP: 35% margin over the raw material cost in the BOPP.

    — Rajesh Bhatia, Group President & CFO

Risks & concerns

  • US Tariffs on Indian Products

    medium

    Secondary tariff of 25% on Indian products is higher than expected, impacting packaging exports from India to USA. Management expects resolution or extension.

    Management acknowledged

  • BOPET Overcapacity and Imports

    medium

    While BOPET margins improved in India, higher imports from Southeast Asia and China are keeping prices in check. Global BOPET demand/supply balancing is expected to take at least two more years.

    Management acknowledged

  • Asepto Expansion Delays

    medium

    The Aseptic Packaging capacity expansion (7 to 12 billion packs) has been delayed, impacting potential revenue contribution for the FY26 calendar season, with benefits now expected from FY27 onwards.

    Management acknowledged

  • Potential for Future Overcapacity

    low

    Management noted that if BOPP/BOPET margins increase, new players might add capacity, potentially leading to overcapacity in the next three years, as seen in the past.

    Management acknowledged

Areas of evasion (1)

  • Specifics on 'low-hanging fruit' for investors

Q&A highlights

3 direct
Asepto expansion delays and revised FY26 volume guidance Direct
Asepto, we had earlier given a guidance of about 10 billion packs. So, in the Q1, we have achieved about 2.3 billion packs, which is April, May, June. So, I think we will look at somewhere between 8.5-9 billion packs now.

Reveals a downward revision in Asepto volume guidance for FY26 and clarifies the impact of commissioning delays on current year performance.

Asked by Chirag Singhal

BOPET overcapacity situation and margin outlook Direct
I mean, overseas in the specific jurisdictions, there is no significant mismatch. It is only that because there is a significant mismatch is there in India. So, India is exporting to these countries and with the rupee depreciating against the euro, so that is again helping the Indian exporters to drive better margins while exporting and then keeping the demand/supply equilibrium balanced in India. So, in BOPET, it will take at least two more years before any meaningful impact of the demand/supply balancing could be seen.

Provides clarity on the global vs. Indian BOPET market dynamics, attributing overcapacity issues primarily to India and giving a timeline for market rebalancing.

Asked by Aman Kumar

Sustainability of Q1 EBITDA margin and full-year revenue/EBITDA trajectory Direct
we have given guidance that revenue will be increased by 10% and our approx. EBITDA last year was Rs. 1,900 crores, this year it will be approx. Rs. 2,100 crores. Now, we have grown the revenue by 6.4% in the first quarter. So, it means the remaining balance period of three quarters in that we have to grow by 10% our revenue to come close to that 10% revenue numbers, we have to grow by 11% actually.

Addresses concerns about achieving full-year targets given Q1 performance, outlining the required growth rate for the remaining quarters and factors expected to drive it.

Asked by Saket Kapoor

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview

Uflex reported Q1 FY26 revenues of ₹3,922 crores, a 6.5% increase year-on-year. This growth was primarily volume-driven, with overall sales volumes up 7.9%. The packaging segment saw an 11.7% volume increase, and packaging films grew by 6.8%. Despite this, the EBITDA margin for the quarter was 12%, slightly down from 12.7% in the previous year, attributed to tariff uncertainties and prior material stocking by companies. Notably, there were no exceptional foreign exchange losses this quarter, compared to ₹180 crores last year.

New Projects and Capacity Expansion

The company is undertaking significant CAPEX, with ₹1,100 crores already spent out of an approved ₹2,000 crores, and the balance ₹900 crores to be spent by Q1 FY27. Key projects include the Aseptic Packaging greenfield expansion in Egypt (12 billion packs), WPP bags for the Pet Food industry, and a recycling facility in Noida. These new investments are projected to add ₹3,000 crores in additional revenues and ₹600 crores in EBITDA at an 85% capacity utilization, generating higher margins than conventional packaging films.

Market Dynamics and Tariffs

The packaging film industry experienced a shift in dynamics following an accident at a large player in May, leading to reduced exports from India to Europe and lower local availability of BOPET and BOPP films. This has resulted in better margins, with full reflection expected in subsequent quarters. However, US tariffs on Indian products, particularly a 25% secondary tariff, pose a challenge, though management anticipates a resolution or extension. Exports from Mexico to the US benefit from nil duty under USMCA, providing a competitive edge.

Asepto Business Update

The Aseptic Packaging capacity expansion, initially expected to commence in January 2025, has been delayed, with benefits now anticipated from the 2026 calendar year onwards. The FY26 volume guidance for Asepto has been revised downwards from 10 billion packs to 8.5-9 billion packs, despite Q1 achieving 2.3 billion packs. Liquid Packaging volumes still grew robustly by 18% year-on-year in Q1 FY26.

Debt and Financial Outlook

The ongoing CAPEX has led to an increase in debt, with the net debt-to-EBITDA ratio expected to peak at around 4.1. However, management is confident that with the commissioning of new projects and the resulting revenue and profitability kick-in, the net debt-to-EBITDA ratio will come down to under 3 by FY27. The company aims for a 10% revenue growth and an EBITDA of approximately ₹2,100 crores for FY26, up from ₹1,900 crores last year.

Recycling Business and EPR Initiatives

Uflex's upcoming recycling facility in Noida is strategically positioned to meet government guidelines requiring 30% recycled content in rigid packaging and 10% in flexible packaging. The company plans to offer a 'single pellet solution' to customers, providing a pre-mixed product with 70% virgin material and 30% recycled content, ensuring quality and ease of use. Management emphasized the long-term sustainability and formidable nature of this business segment, though patience is required for regulations to stabilize.

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