UFlex reports robust performance led by packaging films

Building on the solid foundation laid in the first half of FY25, the third quarter has further demonstrated the sustainability and inherent strength of UFlex’s business model, delivering a solid performance during this period. The capacity utilisation in Packaging films increased by 10.9% YoY and 12.9% QoQ in Q3 FY25. Profit after tax (PAT) benefited by currency translation gain of Rs 257 million in Q3 FY25, compared to an exceptional currency translation loss of Rs 1,001-million in Q3 FY24.

Consolidated sales volume grew by 6.3% YoY in Q3 FY25, driven by healthy performance in the packaging films and packaging segment. Total sales volume in Q3 FY25 was 157,036-mt, consisting of 78.5% packaging films and 21.5% packaging. Total revenues increased by 12.8% YoY to Rs 37,742-million in Q3 FY25, up from Rs 33,454-million in Q3 FY24. Normalised EBITDA increased by 18.8% QoQ and 22.3% YoY basis to Rs 5,207-million in Q3 FY25 compared to Rs 4,258-million in Q3 FY24. Normalised EBITDA margin expanded by 250 bps QoQ and 110 bps YoY to 13.8% in Q3 FY25 from 12.7% in Q3 FY24.

In FY25 YTD, our consolidated sales volume grew by 9.2% YoY to 482,352-mt, up from 441,769-mt in FY24 YTD. The sales volume consisted of 78% packaging films and 22% packaging business. Total revenues increased by 13.0% YoY to Rs 113,100-million, up from Rs 100,131-million in FY24 YTD. Normalised EBITDA increased by 23.3% YoY basis to Rs 14,242-million compared to Rs 11,553-million in FY24 YTD. Normalised EBITDA margin expanded by 110 bps YoY to 12.6% from 11.5% in FY24 YTD.

In Q3 FY25, revenue from operations accounted for 99% of total income, with India contributing the largest share at 46%. The Middle East & Africa and Europe contributed 16.2% and 16.5% respectively, while the Americas contributed 18.4%. The remaining 1.8% came from other regions, reflecting a well-diversified revenue mix across key global markets.

Overall, the quarter reflects the company’s ability to drive growth across key segments while optimising capacity utilisation to strengthen sales, increase profitability, and expand operating margins.

The quarter saw a resurgence in food inflation in India, pushing the CPI (Consumer Price Index) to a 10-month high of 6.21% in October 2024, while the CFPI (Consumer Food Price Index) peaked at 10.87%. Since then, inflation has moderated, with the CFPI easing to 8.39% and the CPI dropping to 5.22% by December 2024. However, the combined impact of softening Industrial Production (IIP), weakened Private Final Consumption Expenditure (PFCE), and persistent inflationary pressures have strained household disposable income and consequential spending. This has dampened consumer sentiment, moderated demand, and reduced consumer spending in the FMCG (Fast-Moving Consumer Goods) and Food & Beverage (F&B) segments.

The Indian FMCG sector has faced sluggish urban growth over the past three quarters due to high food inflation and living costs, while rural markets continued to outpace urban demand consistently in the last four quarters.

UFlex remains optimistic about a revival in FMCG consumption growth, driven by higher household disposable income resulting from significant tax reliefs and rural development investments outlined in the FY26 budget. By emphasising rural infrastructure, manufacturing, and consumer spending, the three key drivers of the FMCG sector, the GOI budget aims to foster long-term and sustainable growth.

The expected rise in FMCG consumption, particularly for packaged products, will increase demand for flexible packaging SKUs (stock keeping units) essential for FMCG products storage. Consequently, the growing need for flexible packaging will further drive demand for key raw materials such as packaging films, inks, adhesives, printing cylinders, packaging machines, and holography. This cascading effect will spur growth across the entire packaging value chain landscape.

Moreover, The RBI has reduced the benchmark repo rate by 25 basis points (bps) to 6.25% from 6.5%. This was the first reduction in repo rate in nearly five years. A repo rate cut is generally pro-growth, encouraging borrowings, investment and consumer spending. Banks can borrow at a cheaper rate, leading to lower interest rates on loans for businesses and individuals. Cheaper borrowings will further boost economic activity with strong fiscal encouragement for private investments, resulting in higher disposable income and higher consumer spending.

The company’s packaging business segment — comprising flexible packaging, liquid packaging, and holography — rebounded with a 15.0% YoY revenue growth and muted QoQ, recovering from a marginal decline in Q2 FY25.

Despite Q3 being a seasonally weaker quarter for liquid packaging, UFlex liquid packaging capacity utilisation surged to 103.6% in Q3 FY25, marking a strong increase from 83.7% in Q3 FY24 and 93.2% in Q2 FY25. The positive momentum led to a 1.5% YoY increase in sales volume for Q3 FY25 and 7.0% growth over the nine-month period of FY25, reflecting sustained demand and operational efficiency.

Consolidated packaging films production volume increased by 10.9% YoY to 129,169-mt in Q3 FY25, up from 116,475-mt in Q3 FY24. Overall Capacity utilization rose by 600 basis points YoY, reaching 83.6% in Q3 FY25 compared to 77.6% in Q3 FY24. Consolidated Packaging films recorded an 8.7% YoY increase in sales volume.

On a nine-month YTD basis, production volume increased by 12.9% YoY, reaching 386,980-mt in Q3 YTD FY25, up from 342,702-mt in the same period last year. This growth reflects the company’s enhanced operational efficiency and sustained demand. Additionally, the capacity utilisation improved by 720 bps to 83.5% over the nine months of FY25, reflecting efficient resource utilisation.

The business outlook for packaging films in India remained upbeat in Q3 FY25, achieving its best performance of the year in terms of realisation, margins, capacity utilization, and sales volume.

UFlex India's packaging films capacity utilisation grew by 280-bps to 76.4% in Q3 FY25, up from 73.7% in Q3 FY24. This increase in utilisation supported a 3.7% growth in production volume, highlighting strong operational performance and a positive business outlook. Sales volume followed a similar trend, rising by 1.9% YoY, driven by sustained demand across key markets.
The pricing trends of packaging films (BOPET & BOPP) in FY25 have been marked by volatility, with price fluctuations driven by a complex interplay of domestic demand-supply imbalances, movements in global packaging film prices, shift in import-export dynamics, and variations in raw material prices.

The BOPET market in India continues to face a supply overhang, which put pressure on pricing and sales momentum. However, the rising exports have helped to mitigate the impact, ensuring a demand-supply balance and supporting growth. BOPET films exports remained robust, increasing by 9% QoQ and 27% YoY in Q3 FY25.

BOPP exports from India maintained their upward growth trajectory, rising by 6% QoQ and 23% YoY.

Ashok Chaturvedi, chairman and managing director, UFlex Group, said, “We are pleased to announce that we are setting up a woven polypropylene (WPP) bags manufacturing plant in Mexico for pet food packaging. With an estimated investment of USD 50-million, this plant will be the first WPP packaging plant in Mexico catering to the lucrative North and South American pet food market, estimated at approximately USD 90-billion in 2025 and expected to reach approximately 135-billion USD by 2030.”

Chaturvedi said in line with the company’s commitment to support the government of India’s EPR legislation, the company has announced an investment of Rs 317-crore to strengthen its recycling business with significant investments in advanced recycling technologies. 

“The Indian government has set ambitious targets for the collection, recycling, reuse, and use of recycled content in plastic packaging to promote sustainable packaging, and our enhanced recycling capabilities will empower brand owners to meet their EPR commitments and set a global benchmark in sustainable packaging,” he said. “We believe sustainable packaging is non-negotiable, making it imperative for brand owners to embrace recycling and circular packaging. We are honored to achieve a significant milestone as the first Indian company to receive USFDA approval for recycled PCR content in food applications.”

He added, “Looking forward to Q4 FY25, we are set to commercially commission a five-billion-pack capacity expansion at our Asepto facility at Sanand, a 216,000-mtpa virgin PET chips plant in Egypt, and an 18,000 MTPA CPP line in Mexico. These strategic expansions will start kicking in revenue, profitability and cash flow in FY26-27 and beyond.”