On Wednesday, the stock of India’s largest multinational flexible packaging and solutions company experienced a 4.7 percent decline, dropping to an intraday low of ₹398.90 per share, after the company’s management found fraudulent activities by the former director of their wholly-owned subsidiary in the United Kingdom.
Uflex Ltd. is a Small cap company with a market capitalization of ₹2,939 crore. At 12:45 p.m, the company shares were trading at ₹405.65 a share, a decrease of 3.08 percent from the previous closing price on the National Stock Exchange.
According to the company’s official statement, Mr. Pradeep Srivastava, the former Director of Uflex Europe Limited, a wholly-owned subsidiary in the United Kingdom, has been implicated in fraudulent activities during his tenure with the subsidiary.
The fraud was uncovered by the company’s management and is related to kickbacks received from suppliers of Uflex Europe Limited. Legal actions are being pursued under UK laws. The management confirmed the fraud on March 26, 2024.
Uflex Ltd is a leading Indian multinational company that is engaged in the manufacturing and sale of flexible packaging products & offers a complete flexible packaging solution to its customers across the globe.
Uflex Ltd has exhibited a mixed performance in its stock value over recent periods, with a 14 percent decline in the last six months and a 19 percent gain in the preceding 12 months.
Regarding revenue dynamics, there was a notable year-over-year decrease of 5 percent in the company’s revenues, dropping from ₹3,483 crores in Q3FY23 to ₹3,309 crores in Q3FY24. However, during the same timeframe, net losses decreased from ₹85 crores to ₹67 crores.
Breaking down revenue sources as of H1FY24, the company derived 59 percent of its revenue from films and 41 percent from the Packaging business.
The company boasts an impressive clientele, including globally recognized brands such as Coca-Cola, Nestle, Mondelez International, and others.
In terms of customer concentration, the company maintains a diversified customer base, with its top customer contributing 12 percent of revenues and its top 5 customers collectively accounting for approximately 22 percent of revenues.
Uflex Ltd operates a robust global sales and distribution network, serving over 150 countries worldwide. Currently, domestic customers contribute 39 percent of revenues, while international customers constitute the remaining 61 percent.
As of H1FY24, the company operates 16 manufacturing facilities across 5 continents and 9 countries, boasting a global capacity of approximately 780,000 MTPA. It prides itself on its efficient delivery system, claiming to deliver anywhere in the world within 15 days, with a manufacturing presence in the US, Mexico, Poland, Russia, Hungary, India, Dubai, Nigeria, and Egypt.
Written by Omkar Chitnis
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