UFLEX Limited — Q3 FY26 earnings call

Call held 16 Feb 2026

Management summary

Uflex reported a mixed Q3 FY26, with revenue declining YoY due to macro headwinds like US tariff uncertainties and GST transition, impacting volume and pricing. However, profitability showed sequential improvement with normalized EBITDA margin expanding 200 bps QoQ to 12.1%. The company is nearing commissioning of three major projects in Egypt, India, and Mexico, which are expected to drive future growth and improve leverage through enhanced EBITDA. Management expressed confidence in market recovery and achieving FY26 EBITDA guidance.

Highlights

  • 9M FY26 PAT of ₹1,210 million, a significant turnaround from a loss of ₹263 million in the prior year.

  • Q3 FY26 Normalized EBITDA increased 12.8% QoQ to ₹4,395 million, with margin expanding 200 bps QoQ to 12.1%.

  • Aseptic packaging volumes showed steady growth, up 2.3% YoY in Q3 FY26 to 1.8 billion packs and 4.4% YoY in 9M FY26 to 5.9 billion packs.

  • Three major capacity expansion projects in Egypt, India, and Mexico are expected to be commissioned within the next 90 days, poised to drive future EBITDA growth.

  • Market conditions for packaging films are showing signs of reversal, with BOPET prices recovering to ~₹110/kg and BOPP prices improving to ~₹120-121/kg.

Concerns

  • Q3 FY26 Revenue declined 3.8% YoY to ₹36,329 million, attributed to volume softness and import-related pricing pressure.

  • 9M FY26 Normalized EBITDA decreased 9.6% YoY to ₹13,000 million, with a margin of 11.4%.

  • Capacity utilization in some overseas markets like Poland, Hungary, and Mexico experienced a sharp dip in Q3 FY26, with Poland at 56.7%.

Key financials

2 periods

Q3 FY26

  • Revenue
    36,329 Mn
    YoY -3.8%
  • Normalized EBITDA
    4,395 Mn
    QoQ +12.8%
  • Normalized EBITDA Margin
    12.1%
  • PAT
    361 Mn
    QoQ +34%
  • EPS
    ₹5.01

9M

  • FY26 Revenue
    1,14,157 Mn
    YoY +0.8%
  • FY26 Reported EBITDA
    13,571 Mn
    YoY 0%
  • FY26 Normalized EBITDA
    13,000 Mn
    YoY -9.6%
  • FY26 Normalized EBITDA Margin
    11.4%
  • FY26 PAT
    1,210 Mn

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

  • Aseptic Packaging Volumes
    1.8 billion packs Q3 FY26 Volume5.9 billion packs 9M FY26 Volume

Capital allocation

high confidence
  • Capex Capex disclosed
    • Remaining capex for Egypt aseptic plant ₹350 Cr
    • Remaining capex for Noida recycling plant ₹110 Cr
    • BOPP Dharwad plant expenditure
    So, some part of this as we talked about these projects which are yet to see the full completion and commissioning. Yes, we have about 36 million, we are about close to about Rs. 350 crore of capex spent which is remaining post after the quarter 3 for our Egypt aseptic plant. We will have for remaining capex of close to about Rs. 110 crore-Rs. 120 crore for the recycling plant at Noida. And we will have; the next one will be the BOPP Dharwad plant expenditure.
  • Debt Net ₹8,000 Cr Cost 6.9%
    • Repayment Current maturities for next year ₹1,450 Cr
    Yes. So current blended cost of funds will be about 7%, 6.9 to 7% blended cost of funds. ... I think so peak debt, is our net debt is Rs. 8,000 crore, so what is our first-year current maturities for the coming ensuing year?

Guidance & targets

Volume

  • Aseptic packaging total sales volume Volume · FY26 · High confidence 8.5 billion packs
    Largely we see that this year we should be having this total aseptic packaging business to be in the range of around 8.5 billion packs, though we expect that this can be slightly better, but we are keeping our guidance to about 8.5 billion packs.

    — Sumeet Kumar

  • Aseptic packaging total sales volume Volume · FY27 · Medium confidence Significant improvement from 8.5 billion packs
    Next year onwards, as we are almost near commissioning stage of the similar capacity in Egypt and now with the full impact of the extra 5 billion packs expansion in India... we expect that to translate a better utilization of these capacities. So, I can say without putting a number that it should show a significant improvement from the current year's numbers of 8.5 billion packs or thereabout.

    — Sumeet Kumar

Margin

  • FY26 EBITDA margin Margin · FY26 · High confidence ~12%
    as for this fiscal, we expect this to be in the range of 12% or so.

    — Sumeet Kumar

  • FY27 EBITDA margin Margin · FY27 · Medium confidence >12%
    EBITDA margin, improving from 12% further upwards. And this is what we can see as a trend, as an expectation in the next fiscal of FY'27.

    — Sumeet Kumar

  • Margin from 3 new plants (full capacity) Margin · Medium confidence high-teens (if not 20%)
    with the margin which if not at 20%, we can expect a high-teens margin there.

    — Sumeet Kumar

Profitability

  • FY26 EBITDA Profitability · FY26 · High confidence ₹1,800-1,850 crore
    we expect it to be within the range of 12% translating to an EBITDA which largely should hold the guidance given earlier of Rs. 1,800 crore to Rs. 1,850 crore for the year as a whole

    — Sumeet Kumar

Capacity Utilization

  • Egypt aseptic plant utilization Capacity Utilization · coming year (FY27) · Medium confidence ~80%
    from a nine-month utilization of 58%-60% we should see Egypt plant utilization in the range of close to about 80%.

    — Sumeet Kumar

  • Panipat PET plant utilization Capacity Utilization · coming year (FY27) · Medium confidence ~85-90%
    for Panipat plant we expect this to be further improving from the current level of 79% to upward of 85%-90%.

    — Sumeet Kumar

Revenue

  • Incremental revenue from 3 new plants (full capacity) Revenue · Medium confidence ₹2,000-2,500 crore
    we should get an incremental revenue on account of these three projects' contribution of close to about Rs. 2,000 crore Rs. 2,500 crores

    — Sumeet Kumar

What to watch in Q4 FY26

Commissioning of Egypt aseptic, Noida recycling, Mexico WPP bag plants

Within 90 days (current to next quarter)
Current Nearing commissioning
Target Operational

Why it matters

These projects are key for future revenue, EBITDA, and deleveraging.

I think I can say that between the current and the next quarter we should see these three projects being commissioned, give and take a few months here and there, but I expect that between now and end of the first quarter, we should have all these three projects up and running.

Risks & concerns

  • Macroeconomic headwinds (US tariff-related uncertainty, GST transition in India)

    high

    Impacted Q3 performance, leading to volume softness and pricing pressure, though trends are now reversing.

    Management acknowledged

  • High debt levels

    medium

    Analysts expressed concern about increasing debt; management stated leverage has peaked and will moderate with EBITDA improvement.

    Analyst acknowledged

Q&A highlights

5 direct
Debt reduction roadmap and leverage targets. Partial
what I can say is that we see this leverage ratio, which is at the current level, more or less being at the peak. And so far as no reduction of that, it will be an interplay of overall repayment which, in fact, is during the year. And at the same time, EBITDA improvement will lead to this leveraging coming more under moderation is what I can say.

Analysts are concerned about high debt levels and previous unfulfilled promises. Management indicates debt has peaked and will moderate with EBITDA improvement, but doesn't give a specific debt reduction timeline.

Asked by Aman Kumar

Commissioning timeline for new projects (Egypt aseptic, Noida recycling, Mexico WPP). Direct
I think I can say that between the current and the next quarter we should see these three projects being commissioned, give and take a few months here and there, but I expect that between now and end of the first quarter, we should have all these three projects up and running.

These projects are crucial for future growth and EBITDA improvement, and their timely commissioning is a key investor monitoring point.

Asked by Aman Kumar

Capacity utilization in overseas markets (Mexico, Hungary, Poland) and reasons for dip. Direct
in the most places, I think this is this is not different from the overall theme which impacted the packaging films production volume to some extent. And Europe, Poland, Hungary, as you talked about, were also to a great extent impacted by the reorientation of the exports and a little bit of supply glut.

Explains the operational challenges faced in Q3 and provides context for lower volumes and pricing pressure, with management indicating a reversal of trends.

Asked by Chirag Singhal

Rationale for investing in commodity films vs. value-added films. Direct
on one hand we have the base layer as the base packaging film, but most of the places including Egypt, including Hungary and other places we have also invested and added the capacity of, as I talked about, metallized ALOx and ultra-high barrier films and those are now forming an increasing share of the overall packaging films segment

Clarifies the company's strategy of having a base commodity film business while increasingly focusing on higher-margin, value-added specialized films for better realization.

Asked by Aman Kumar

Impact of EPR (Extended Producer Responsibility) on margins. Direct
Yes, overall, in fact we see as when the actual implementation of this happens, that will largely track the increased utilization. And we being one of the best entrenched players in the recycling capacity, we will be the early beneficiary and should be able to get the benefit of our significant strategic investment in that as this starts getting implemented resulting in the numbers of this renewable mix.

Highlights a potential future margin driver from the company's strategic investment in recycling capacity, linked to government regulations.

Asked by Kaushik Poddar

Why results are declared on the penultimate day of the statutory requirement. Partial
I think this is a suggestion which is welcome suggestion and it is not for any kind of constraint or anything, it is largely something that we can talk about.

This question challenges the company's transparency or efficiency in reporting, and management's response is somewhat evasive, acknowledging it as a suggestion rather than providing a clear reason.

Asked by Saket Kapoor

Request for Vice Chairman CEO Mr. Anantshree to be on earnings calls. Direct
Most definitely. I think that is a suggestion which is definitely worth checking home... We will definitely take it to the promoters to get it.

Reflects investor desire for direct engagement with top leadership, especially the promoter, for strategic vision and confidence building.

Asked by Saket Kapoor

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Uflex reported a Q3 FY26 revenue of ₹36,329 million, a 3.8% decline year-on-year, primarily due to volume softness and import-related pricing pressures. Despite this, the company achieved a normalized EBITDA of ₹4,395 million, marking a 12.8% sequential growth. The normalized EBITDA margin expanded by 200 basis points quarter-on-quarter to 12.1%, reflecting improved operational discipline. Profit After Tax (PAT) for the quarter stood at ₹361 million, up 34% sequentially, with EPS at ₹5.01 per share.

Nine-Month FY26 Performance and Turnaround

For the first nine months of FY26, Uflex's revenue reached ₹114,157 million, a modest 0.8% increase year-on-year. Normalized EBITDA for this period was ₹13,000 million, down 9.6% YoY, with a margin of 11.4%. A significant turnaround was observed in PAT, which moved to a positive ₹1,210 million compared to a loss of ₹263 million in the corresponding period last year, supported by lower exceptional impacts. This indicates a recovery trajectory despite earlier challenges.

Aseptic Packaging Business Growth and Expansion

The aseptic liquid packaging business demonstrated steady growth, with volumes increasing by 2.3% year-on-year in Q3 FY26 to 1.8 billion packs. For the nine-month period, volumes grew 4.4% to 5.9 billion packs. The company expects this momentum to continue, projecting a total sales volume of approximately 8.5 billion packs for the current fiscal year (FY26). This growth is reinforced by the nearing commissioning of a 12 billion packs expansion in Egypt and an extra 5 billion packs capacity in India, expected to drive significant improvement in FY27.

Strategic Project Commissioning and Future Outlook

Uflex is on the verge of commissioning three major projects: a 12 billion packs aseptic liquid packaging facility in Egypt, a 40,000 tons recycling plant in India, and an 80 billion bag production capacity woven polypropylene bag plant in Mexico. These projects are expected to be operational within the next 90 days. Management anticipates these new capacities, coupled with improving market conditions, will significantly boost EBITDA and lead to a moderation in the company's leverage ratio, which is currently perceived to be at its peak.

Market Dynamics and Film Business Recovery

The packaging films business faced headwinds in Q3 FY26 due to US tariff-related uncertainties and a reorientation of exports, leading to supply gluts and pricing pressure in European and MENA markets. However, management noted signs of reversal, with BOPET film prices recovering from ₹90/kg to around ₹110/kg and BOPP film prices improving to ₹120-121/kg. The company expects capacity utilization in overseas plants like Poland, Hungary, and Mexico to normalize to over 80% in the coming fiscal year.

Debt Management and Cost of Funds

The company's net debt stands at ₹8,000 crore, with current maturities for the next year estimated at ₹1,450-1,500 crore. Management believes the leverage ratio has peaked and expects it to improve with enhanced EBITDA from new projects. The blended cost of funds is currently around 6.9-7% and is anticipated to decrease further. Remaining capex of approximately ₹1,200 crore, combined with debt repayments, is expected to largely offset each other, preventing significant additions to the overall debt.

Focus on Value-Added Products and EPR Initiatives

Uflex is strategically focusing on value-added products within its packaging film portfolio, including metallized ALOx and ultra-high barrier films, which offer better realizations. The company is also a key player in Extended Producer Responsibility (EPR) initiatives, with significant investments in recycling capacity. While EPR guidelines have been extended, Uflex expects to be an early beneficiary of their eventual implementation, driving increased utilization and potentially improving margins through its renewable mix.

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