UFLEX Limited — Q4 FY25 earnings call

Call held 20 May 2025

Management summary

Uflex reported a strong turnaround in FY25, with significant revenue and EBITDA growth, and a return to PAT positive. This performance was driven by improved Packaging Films volumes and margins, and robust utilization in Aseptic Packaging. The company is focused on ramping up new capacities, managing debt, and optimizing operations, with a positive outlook for FY26 despite potential BOPP capacity overhang.

Highlights

  • Consolidated revenue for FY25 increased by 12.4% to over ₹15,000 crores.

  • Operational EBITDA for FY25 grew by approximately 18% compared to FY24.

  • The company reported a PAT positive of approximately ₹142 crores in FY25, a significant turnaround from a loss of ₹690 crores in FY24.

  • Packaging Films business saw a volume increase of 10.4% and sales growth of 10.3% in FY25.

  • Aseptic Packaging achieved over 110% capacity utilization, producing 7.87 billion packs against a 7 billion pack capacity in FY25.

  • Gross debt stood at approximately ₹8,100 crores and net debt at ₹6,800 crores as of March 31, 2025.

  • Total capex for FY25 was ₹1,726 crores, with a planned capex of ₹1,200 crores for FY26.

  • Guidance for FY26 includes 10% revenue growth and an EBITDA of approximately ₹2,100 crores.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹15,000 Cr
    YoY +12.4%
  • Operational EBITDA Growth
    18%
    YoY +18%
  • PAT
    ₹142 Cr
  • Exceptional Loss
    ₹177 Cr
  • Gross Debt
    ₹8,100 Cr
  • Net Debt
    ₹6,800 Cr

FY25

  • Capex
    ₹1,726 Cr
  • Debt-to-EBITDA
    3.6

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 Films
    10.4% Volume Growth (FY25)10.3% Sales Growth (FY25)77.7% Contribution to Business
  • Aseptic Packaging
    7.87 billion packs Volume (FY25)110% Capacity Utilization (FY25)

Guidance & targets

Capacity

  • Aseptic Packaging Capacity Capacity · future · High confidence 12 billion packs
    And as we commission our 12 billion packs capacity, which is now in the final stages, I think we will look for a much better performance from this as this business sort of will not have capacity bottlenecks to expand its horizons.

    — Rajesh Bhatia, Group President and Chief Financial Officer

  • BOPP Capacity Addition (India) Capacity · next 3 to 4 months · High confidence 20,000 tons
    So, industry in India on the BOPP side, I told you that there is going to be about 20,000 tons of capacity getting added in the next 3 to 4 months.

    — Rajesh Bhatia, Group President and Chief Financial Officer

Debt

  • Long-term Debt Repayment Debt · FY26 · High confidence ₹1,175 crores
    But we have next year a repayment of about INR 1,175-odd crores for the long-term portion of the debt, working capital are more rotational in nature.

    — Rajesh Bhatia, Group President and Chief Financial Officer

  • Debt-to-EBITDA Ratio Debt · FY26 and or FY27 middle · Medium confidence 3.9

    Previously 3.6 → 3.9

    I think max we can look at is about 3.9-odd also.

    — Rajesh Bhatia, Group President and Chief Financial Officer

Capex

  • Ongoing Expansion Projects Capex Capex · FY26 · High confidence ₹1,200 crores
    And next year also, we are looking to spend close to about INR 1,200 crores on our ongoing expansion projects.

    — Rajesh Bhatia, Group President and Chief Financial Officer

  • Recycling Investment (Noida) Capex · ongoing · High confidence ₹317 crores
    is in Noida, the INR 317 crores that are being spent.

    — Rajesh Bhatia, Group President and Chief Financial Officer

Volume

  • Aseptic Packaging Volumes Volume · FY26 · Medium confidence 10 billion to 10.5 billion packs
    Guidance for FY '26 would be in the range of 10 billion to 10.5 billion packs.

    — Rajesh Bhatia, Group President and Chief Financial Officer

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 10%
    So, we expect that FY '26, we will have a 10% revenue growth.

    — Rajesh Bhatia, Group President and Chief Financial Officer

  • Mexico PET Film Packaging Plant Turnover Revenue · full capacity · High confidence $50 million
    Its turnover will come at about $50 million at full capacity.

    — Rajesh Bhatia, Group President and Chief Financial Officer

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 12.5% to 13%
    and a 13% margin on this 12.5% to 13% margin should give you INR 2,100-odd crores of EBITDA.

    — Rajesh Bhatia, Group President and Chief Financial Officer

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

    — Rajesh Bhatia, Group President and Chief Financial Officer

Margin

  • Packaging Film Industry Margins Margin · FY26 · Medium confidence 10% to 11%
    So overall guidance for this year on the PET industry margins on the packaging film industry margins, I think let's look at 10% to 11%.

    — Rajesh Bhatia, Group President and Chief Financial Officer

  • Pet Food Packaging Business EBITDA Margin Margin · future · High confidence 22% to 24%
    Pet food packaging business, we are looking at about 22% to 24% EBITDA margin.

    — Rajesh Bhatia, Group President and Chief Financial Officer

Risks & concerns

  • BOPP capacity expansions and potential impact on pricing and margins

    medium

    Industry-wide BOPP capacity expansions are expected from June onwards, which could impact pricing and margins, requiring close monitoring.

    Management acknowledged

  • Increased competition in Aseptic Packaging from new players

    medium

    Analysts raised concerns about new players like SIG and GLS Elopak commissioning plants, but management expressed confidence due to market growth and technological differences.

    Analyst downplayed

  • Volatility in BOPET and BOPP prices

    medium

    Significant price volatility in BOPET and BOPP in the domestic market was noted, but management stated it leads to inter-segment adjustments without major financial deviations.

    Analyst acknowledged

  • Impact of Indian capacity overhang on European plants

    medium

    Indian capacity overhang has led to cheaper imports into Europe, affecting capacity utilization at Uflex's Poland facility.

    Management acknowledged

  • Stabilization time and initial profitability for new projects

    low

    Management noted that new projects take time to stabilize, and initial profitability might not meet full expectations for the first couple of years.

    Management acknowledged

Areas of evasion (2)

  • exact BOPET/BOPP spreads for Q4
  • specific FY27 guidance

Q&A highlights

2 direct
Feasibility and cost of chemical vs. mechanical recycling Direct
No, we are not doing the chemical recycling. We are only doing the mechanical recycling. So mechanical recycling, the recycled material ultimately is going to be a bit more expensive for the buyers... But on the whole, even after everything that does settle and the normalcy comes, still it will be expensive as compared to virgin.

Clarifies Uflex's recycling strategy (mechanical only) and its cost implications compared to virgin materials, which is crucial for understanding their sustainability investments.

Asked by Shashank Agarwal

Impact of increased competition and capacity in Aseptic Packaging Partial
So, I can give you the overall industry number, which is about 36 billion packs annually... So overall, we don't see any challenges. SIG, in any case, I'm told is a different technology than Tetra. And it will take time for that acceptance and all that...

Addresses concerns about new entrants like SIG and Elopak in the Aseptic market, with management expressing confidence due to market growth and technological differentiation, but not providing specific competitive impact analysis.

Asked by Chirag Singhal

Future outlook for the film business amidst BOPP capacity additions Direct
Film business, we are not saying that we are not sure of future. We are sure of future of this business. But in any commodity business, you see there are cycles when the capacity gets bunched together. And that's the time you see the capacity utilization across the industry moving down. And then again, it stabilizes.

Provides management's perspective on the cyclical nature of the film business and how they plan to navigate the upcoming BOPP capacity overhang, emphasizing market adjustments and export strategies.

Asked by Aman Sonthalia

2 min read 6 chapters

Detailed narrative

FY25 Financial Performance and Turnaround

Uflex reported a strong financial turnaround in FY25, with consolidated revenue increasing by 12.4% to over ₹15,000 crores. Operational EBITDA saw a substantial 18% growth compared to FY24. Notably, the company achieved a PAT positive of approximately ₹142 crores, a significant recovery from a loss of ₹690 crores in the previous fiscal year. This improvement was supported by a reduction in exceptional losses to ₹177 crores in FY25 from ₹871 crores in FY24.

Packaging Films and Aseptic Business Highlights

The Packaging Films business was a key driver, with volumes growing by 10.4% and sales by 10.3% in FY25, surpassing 500,000 tons in production and sales for the first time. Margins in this segment also improved. The Aseptic Packaging business continued its strong performance, producing 7.87 billion packs against a 7 billion pack capacity, achieving over 110% utilization. The company expects to commission its 12 billion packs capacity soon, aiming for 10-10.5 billion packs volume in FY26.

Debt Management and Capex Plans

As of March 31, 2025, Uflex's gross debt stood at approximately ₹8,100 crores, with net debt at ₹6,800 crores, and cash reserves of ₹1,273 crores. The company spent ₹1,726 crores on capex in FY25 and plans to spend around ₹1,200 crores in FY26 for ongoing expansion projects. Management aims to repay approximately ₹1,175 crores of long-term debt in FY26, while acknowledging that new debt might be added for working capital needs related to business growth.

FY26 Outlook and Margin Expectations

For FY26, Uflex projects a 10% revenue growth, translating to approximately ₹16,700 crores. The EBITDA margin is expected to be in the range of 12.5% to 13%, leading to an estimated EBITDA of ₹2,100 crores. The debt-to-EBITDA ratio is projected to be around 3.9 in FY26/FY27. Packaging film industry margins are expected to remain in the 10% to 11% range.

Recycling and Sustainability Initiatives

Uflex is investing significantly in mechanical recycling, with a ₹317 crore project underway in Noida. Management clarified that mechanical recycling, while more expensive than virgin PET, is a proven method and their recycled products are US FDA approved for food packaging. They anticipate increased demand for films made from recycled PET bottles and expect sustainability initiatives to perform better in FY26.

International Operations and Capacity Utilization

The company highlighted efforts to optimize capacity utilization in international plants, particularly in Nigeria and Poland, which have faced pressure from cheaper imports. The Mexico PET film packaging plant is expected to achieve a turnover of $50 million (approx. ₹450 crores) at full capacity, with the pet food packaging business targeting an EBITDA margin of 22-24%. The Aseptic Packaging expansion in Egypt, with a 12 billion pack capacity, is expected to support both international and domestic demand, allowing for strategic export shifts.

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