Uflex

Uflex Limited reported a robust Q4 FY26, with consolidated revenue reaching Rs.40,973 million, marking a 12.8% sequential and 5.7% YoY increase. EBITDA saw a significant jump of 36.3% QoQ and 31.8% YoY to Rs.6,265 million, leading to an EBITDA margin of 15.3%, the highest in 14 quarters. Normalized PAT for the quarter stood at Rs.2,026 million, reflecting improved realizations and a better product mix, despite a challenging operating backdrop including West Asia conflict and tariff-related uncertainty.

For the full fiscal year FY26, Uflex achieved a consolidated revenue of Rs.155,130 million, up 2.1% YoY. EBITDA grew healthier at 8.1% to Rs.19,836 million, with the full year EBITDA margin expanding by 70 basis points to 12.8% compared to the previous fiscal. Consolidated sales volume for FY26 remained resilient, growing 0.4% to 649,789 MT. This performance underscores the company's ability to ensure steady operations and improved profitability through multiple external headwinds^🌐.

Uflex is actively commissioning several key projects to drive future growth. The PET chip facility in Egypt and the 18,000 MT CPP facility in Mexico, commissioned in late FY25, are seeing healthy ramp-ups. In H1 FY27, the company expects to commission a 12 billion aseptic packaging facility in Egypt and a WPP facility in Mexico. Additionally, a recycling facility in India was commissioned in April, with a ramp-up of 36,000 rPET and 3,600 rMLP capacity expected over the next three quarters, adding to revenues and significant margins.

While Q4 FY26 saw significant improvement in packaging film spreads due to raw material price increases being passed on, management noted a moderation in Q1 FY27. Raw material prices have softened, and market prices have brought down spreads, particularly for BOPET, which are significantly down compared to Q4. The company expects packaging film margins to moderate from Q4 levels, while margins in other segments like packaging solutions are anticipated to remain stable, contributing to an overall FY27 EBITDA margin between 12.8% and 15.3%.

Uflex has shown an improvement in its leverage ratio, with Net Debt/EBITDA decreasing from 4.51 in Q3 to 4.35 in Q4 FY26. This improvement is expected to continue as EBITDA from newly commissioned projects kicks in. The average blended cost of funds is currently around 9%, down from previously above 9%. The increasing contribution of international business, now 57% of total revenue, is also helping to secure better cost of funding for overseas operations, though refinancing options are considered premature at this stage.

The company's recent capital expenditure has been directed towards value-accretive, higher-margin projects such as aseptic packaging, WPP bags, and recycling facilities. Management indicated that roughly Rs.1,900-2,000 crore of capital work in progress is expected to be capitalized in the current financial year. The focus remains on increasing asset utilization of both existing and newly commissioned capacities to ensure efficient conversion of capex into EBITDA, while remaining open to new capex opportunities that offer high margins and product mix optimization.