The shares of the leading multinational flexible packaging solutions provider gained up to 4 percent after the company’s subsidiary set up an Aseptic Packaging facility in Egypt.
With a market capitalization of Rs 5,028.81 crore, the shares of Uflex Ltd were trading at Rs 696.40 per share, increasing around 1 percent as compared to the previous closing of Rs 691.75 apiece.
Reason for rise:-
The shares of the company have seen such a bullish movement after Uflex Ltd step down its wholly owned subsidiary viz., Flex Asepto (Egypt) S.A.E. has decided to set up an Aseptic packaging facility in Egypt, this facility will increase the company’s capacity by 12 billion packs per annum.
Moreover, the purpose of the packaging facility is to meet the demand for Aseptic Packaging in Egypt region, Europe, the Middle East, and East Africa. The investment will be USD 126 million and this capacity addition will be completed by September 30, 2025.
Financial Performance:-
Analyzing the company’s financial performance, revenue surged by 12 percent from Rs 3,258 crore in Q1FY24 to Rs 3,654 Crore in Q1FY25. During the same period, net loss shrank by 76 percent from Rs 416 crore to Rs 98 crore.
Volume and Margin Insights:
The company’s domestic volumes grew 5% sequentially, while overseas volumes rose by 1%. Offshore margins improved to 13.4%, up from 12.6% in Q4 FY24 and 7.2% in Q1 FY24. The Aseptic Packaging division hit record production, operating at 120% capacity, producing 8.5 billion packs annually.
Strategic Developments
The company is capitalizing on recycling opportunities, particularly in Post-Consumer Recycled (PCR) materials, with regulatory support expected from April 2025. Investments in PCR and Multi-Layered Plastics (MLP) recycling aim to boost revenue and profitability. Early investments and existing capabilities provide a competitive advantage in the segment.
Market outlook:-
A shift from BOPP to BoPET is anticipated due to recycling regulations, as BOPP is non-recyclable. The domestic market is expected to account for 60% of Aseptic Packaging sales, with 40% for exports. Industry capacity utilization in India is around 65%, with gradual improvements expected.
Management outlook:-
Management remains optimistic about future quarters, expecting continued margin improvements and revenue growth. The focus is on leveraging technology and capacity to sustain market leadership in the expanding industry, reinforcing their competitive edge and positioning for long-term success.
Company profile:-
UFLEX Limited operates in two segments: Flexible Packaging Activities and Engineering Activities. The Flexible Packaging Activities section manufactures and exports a wide range of products, including flexitubes, lids, candy foils, and others.
Written by:- Abhishek Singh
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