Thank you. Hello and good afternoon to everyone.

On behalf of Arihant Capital Markets Limited, I thank you all for joining into Quarter 3 and 9 months FY26 earnings conference call of UFlex Limited. Today from the management, we have Mr.

Sumeet Kumar, Executive Vice President - Finance, and Mr. Surajit Pal, Vice President - Head of Investor Relations.

Without any further delay, I will hand over call to Mr. Surajit Pal, Vice President - Head of Investor Relations, for his opening remarks.

Thank you, and over to you, sir.

Thank you, Oswal. Good afternoon, everyone.

Thank you for joining us today for Q3 and 9-month FY26 earnings conference call of UFlex Limited. Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statement, which are predictions, projections, or other estimates about future events.

These estimates reflect management's current expectations about the future performance of the company. Please note that these estimates involve several risk and uncertainties that could cause our actual results to differ materially from what is expressed or implied.

I would now request Mr. Sumeet Kumar, Executive VP - Finance, UFlex Group, for his opening remarks, following which we will open the forum for question-and-answer session.

Over to you, sir.

Hello. Good afternoon, everyone.

Thank you so much for joining UFlex Q3 and 9 months FY26 earnings call. I'm Sumeet Kumar.

I'm Executive Vice President - Finance. In fact, I'll take this opportunity for those joining us for the first time to briefly introduce UFlex and our business operations for those who are joining us for the first time.

UFlex Limited is India's largest multinational flexible packaging and solutions company, uniquely integrated across the entire packaging value chain, from raw materials to finished, consumer-ready packaging solutions. Our integrated ecosystem begins with the production of virgin PET chips and recycled PET chips, which form the backbone of our BOPET-based films.

Our packaging films portfolio includes BOPET, BOPP, CPP, recycled PET films, and a wide range of value-added specialty films, which includes Alox, specialty films, high-barrier films, etc. These upstream capabilities are complemented by a strong intermediary products portfolio of high-performance inks, adhesives, coatings, holography solutions, printing cylinders, and engineering equipment, enabling a full in-house capability, quality control, and operational efficiencies.

At the downstream end, we provide complete packaging solutions, including flexible laminates, pouches, tubes, and aseptic liquid packaging cartons. We serve leading global brands across FMCG, across food and beverages, pharmaceutical, personal care, and industrial sectors.

This fully backward-integrated model enhances supply chain reliability, drives innovation, strengthens sustainability initiatives, and positions UFlex as a comprehensive, one-stop packaging partner globally. Now, before I come to performance about the quarter, in fact, I'd like to highlight that this was a challenging quarter in terms of the macro headwinds.

There were two major macroeconomic events which were the drivers under which we have done this quarter and 9-month performance, and both coming from domestic as well as internationally. Overall, for our international markets, we had the impact of the US tariff-related uncertainty as a major driver impacting the performance.

At the same time, we were in the midst of a GST transition, and as a GST rationalization had an impact within India to a great extent. Despite such a challenging demand environment in certain segments, we remain focused on operational discipline, product mix improvement, cost optimization, and long-term value creation.

All of that is reflected in the numbers of the quarter, which are for the 9 months, we clocked a revenue of 114 billion 157 million rupees, which was on a corresponding period of last year was up 0.8% year-on-year. We had the reported EBITDA at a stable level of 13 billion 571 million, which is more or less in line with last year's EBITDA of 9 months for the same period.

We had the normalized EBITDA, which was at almost 13 billion rupees, which was down 9.6% year-on-year, and margin at 11.4%. We had PBT of 136 PBT which was up 136% to ₹1 billion 863 million, which was supported by lower exceptional impact versus last year.

We had a major swing in the PAT at 1.21 billion rupees versus loss of 263 million in the 9-month period of last year. Coming to the performance for the Quarter 3 per se, we had revenue at 36 billion 329 million versus 37 billion 775 million rupees, which was 3.8% down on the corresponding quarter of last year, and that was largely on account of volume softness because of the factors mentioned below, and also because of a lot of import-related pricing pressure in the market.

We had a reported EBITDA which rose 7 9.7% at ₹4 billion 596 million, and there was a margin expansion of 180 basis points on a quarter-on-quarter at 12.7%. During the quarter, we also had foreign exchange and derivative gains of ₹201 million, which were adjusted, resulting in a flat normalized EBITDA for the quarter.

Hence, the normalized EBITDA was at 4 billion 395 million, which was up 12.8% on a sequential quarter basis, and margin overall improved to 12.1%, which was a 200 basis point expansion on quarter-on-quarter. We had the profit before exceptional items, which increased 56% quarter-on-quarter to ₹643 million, and PAT stood at 361 million rupees, which was up by 34% on a sequential quarter basis, and EPS was at ₹5.01 per share.

I'd like to touch upon slightly on the aseptic packaging business. Our aseptic liquid packaging business delivered steady growth during the period, with volumes increasing by 2.3% year-on-year to 1.8 billion packs as against 1.76 billion packs in corresponding Quarter 3 of last year.

For the 9-month period, volumes grew 4.4% to 5.9 billion packs as against 5.7 billion packs in the 9 months of last year, reflecting strong execution and improved product mix. This reinforces the structural growth potential of the aseptic liquid packaging category as we see.

Looking ahead, as we know, Quarter 4 and Quarter 1 are seasonally the strongest quarters for aseptic packaging business. The current quarter and next quarter are expected to witness much better prospects, supported by category tailwinds and also pre-season loading.

We expect this momentum to strengthen and anticipate a robust season and summer in FY27, assuming trade inventory liquidation and inclement weather conditions are now largely behind us. We expect our aseptic packaging business to have a total sales volume of close to about 8.5 billion packs in the next fiscal, subject to overall F&B beverage industry behind.

Thank you. I now request if you have any questions, would love to take that.

Good afternoon, sir.

Good afternoon.

Sir, so far, good. We are doing very well as far as turnover is concerned.

Sir, but could you please outline the company's roadmap for debt reduction? Are there any specific leverage target or timeline over the next 1-3 years that the investors should be aware of?

Yes. In fact, we see at the current leverage level, we see this trend seem to be plateauing at the current level.

We must keep in mind at this stage that we are near commissioning stage for three of our large projects, which includes our 12 billion expansion 12 billion packs expansion of aseptic liquid packaging facility in Egypt. We are having almost a 40,000 tons recycling plant at the near commissioning stage in India, and we have also woven polypropylene bags, which is 80 billion bags production capacity in Mexico.

We are almost at the end of this three major project commissioning. Given that we largely feel that now on, it will be a leverage will be a function of improving EBITDA as a result of this project being operational.

Significantly, it should reduce the leverage overall. We are not looking at this debt level in isolation.

We look at the impact of the bearing on the leverage. With the improving EBITDA and largely this capex cycle being at the juncture that we are, we expect this leverage should be more or less peaked at the current level.

Sir, you have told that you will freeze the debt level to this level, but again you have announced a BOPP project. Every now and then you are announcing projects and keeping the debt level to a very high level.

Whenever there is a downturn in the economy all over the world, I think the company will be in deep trouble if we don't look into control the debt. Because in the past Mr.

Bhatia used to say that this is that debt we will not increase anymore. Again we see there is increased debt in the next quarter.

I think you have to assure the investor that this is the debt, maximum debt the company will have, and then how the management will repay this debt over a period of time.

Yes, in fact, thank you for this point. In fact, we take this point in the spirit of not the guidance that the concern about this leverage is something which is very much top of our priority too.

We look at it as an interplay of the debt level, the current debt level and the current capex. At the same time, we see this improving more on account of this EBITDA improvement from here.

What I can say is that we see this leverage ratio, which is at the current level more or less being at the peak, and so far as no reduction of that, it will be an interplay of overall repayment, which in fact is during the year, and at the same time, EBITDA improvement will lead to this leverage thing coming more under moderation, is what I can say. Sir,

which key markets are currently performing well for UFlex, and where we are facing challenges? What factors are driving the differences in performance across geographies?

Yes, in fact, as you see that we have now current revenue mix of close to about 44% coming from within India. We have 56% of the revenue now coming from overseas markets.

We see that overseas, Egypt and Mexico are the two largest setups outside India, definitely driving the growth. While most of the markets, not just in India, but as this tariff-related uncertainties have also resulted in our packaging films business, which contributes to almost 2/3 of the overall revenues, also being impacted because of the US-related headwinds and also tariff-related uncertainties.

A lot of exports were reoriented to the non-US markets. That meant that to some extent, even the Europe or Middle East, North Africa market, which are the other major markets that we operate in, also impacted by this kind of supply gap mismatch.

Also that resulted in some kind of pricing pressure on the realization. Now we see the good part is that we see in the current quarter that trend in fact is showing some signs of reversal.

As we all know that now this tariff-related thing is easing, there was uncertainties which will mean that this will be stabilizing going back to the normal supply chain operations. That will help us improve our performance in these major markets, and also definitely in India, where we have seen already the prices improving, and there is a price recovery for BOPET films, currently at about ₹110.

Likewise, we have seen marked improvement in the BOPP films. During the quarter, as we started the quarter, these were the things which were actually weighing on the industry as a whole, but we see by the end of the quarter and more particularly in the current quarter those trends being reversed.

We are confident that overall we feel that this will result in the current quarter and more pronounced basis in the next fiscal. These seem to hold extremely good for us.

This is the domestic scenario. What about the, sir, international scenario as far as BOPET and BOPP is concerned?

Do you think that the margin will improve like India overseas?

In fact, I can talk about the way we see the market improving because if you talk about this, US market currently has the major imports of BOPP films. US itself is not a local producer of BOPP, and with the increased demand of BOPP, it is being catered by different markets.

We definitely see US market as a major prospect for the BOPP films for industry, for us as a whole. Overall, we see that and Egypt and largely Mexico plant being benefited by this overall demand, which is showing signs of improvement.

Sir, could you share the expected commissioning and stabilization timeline for aseptic packaging plant in Egypt, the recycling plant in Noida, and the WPP plant in Mexico?

Largely it seems to be very much on course. I think I can say that between the current and the next quarter, we should see these three projects being commissioned, give and take a few months here and there, but I expect that between now and end of that first quarter, we should have all these three projects up and running.

Thank you. This is from my side.

Yeah.

Welcome.

Thanks for the opportunity. My first question is on Asepto.

What are the target volumes for FY26? If you can also help me with your targets for '27 and '28?

In fact, we see that in the current 9 months, the 9 months ended December 25, we had total of 5.9 billion packs as against 5.7 billion packs in the 9 months of last fiscal. Largely, we see that year we should be having this total aseptic packaging business to be in the range of around 8.5 billion packs.

Though we expect that this can be a slightly better, but we are keeping our guidance to about 8.5 billion packs. Next year onwards, as we are almost near commissioning stage of the similar capacity in Egypt, and now with the full impact of the extra 5 billion packs expansion in India, and with increased capacity utilization, and particularly, as I said, Quarter 4 and Quarter 1 being the peak season, we expect that to translate in better utilization of these capacities.

I can say without putting a number that it should show a significant improvement from the current year numbers of 8.5 billion packs or thereabout.

Is it possible to give a range at least for FY27 because you'll have the India as well as Egypt up and running? Just trying to understand what kind of increase in volumes we should expect.

In fact, we are very, very upbeat about the current quarter, and we feel that by end of this quarter, we would be in a fairly good position to give a proper sense of the numbers to expect from fiscal '27. I think that will be an appropriate time because now we have to first reach a stage of commissioning of the aseptic liquid packaging facility in Egypt.

Once we have that, first year, of course, will be a ramp-up, and utilization level we have to calibrate as to what extent. Of course, it will be linked to the market demand and everything.

We feel that both the facilities firing together and also the improved demand should lead to a much more improved number in the next fiscal. At this stage, I'd rather wait for another quarter to give a specific number guidance for the next year.

Okay. This Egypt plant, are you expecting the commissioning to happen in current quarter or in Q1?

I'm expecting this between current and next quarter. We are just around the corner about commissioning of that plant.

I think it may be somewhere maybe within 90 days from now. That can be either end of this quarter or somewhere in the first quarter.

I'll rather put it as over the next 90 days or so.

Okay. Next question is on specific locations capacity utilization.

If I look at Mexico, Hungary, Poland, there was a sharp dip in the capacity utilization during the quarter. What were the key reasons and what should we expect for the coming fiscal?

Most of the places, I think this is not different from the overall theme, which impacted to some extent the packaging films production volume. Europe, Poland, Hungary, as you talked about, were also to a great extent impacted by the reorientation of the exports and a little bit of supply glut.

That meant that to some extent, the production volumes were curtailed. At the same time, having said that, the trend seems to be reversing in many places, largely as a fallout of things happening in US, thankfully.

That should result into restoring of the normal utilization level for these markets as well. Overall, if you ask me to answer your question, it was impacted for the same factor that I mentioned earlier of US-related fallout also impacting the non-US markets overseas, including EU.

What are you guiding for capacity utilization at these three locations for the coming fiscal?

Yeah. Overall, we see it will be at the level where it was earlier, which is about 80% plus kind of capacity utilization is what we can expect from this.

Poland, which is showing at 56.7% in Q3, even that you are saying it should go to 80% odd in the coming fiscal? Because rest are not as low as Poland, but I'm just trying to get a confirmation.

Yes, overall, in fact, we are saying that now these three locations put together looks like improved capacity utilization, and also for Hungary and this. More particularly for Poland, if I request Surjit to just pitch in, he had a point to make, I request him to.

Chirag, you must be aware that this is seasonally a pretty dimity character in Europe, particularly in Eastern Europe, a plus holiday season. Every year, similar kind of things happens, but this time, along with the seasonal fallacy, we also have the impact of this extra supply from the kind of films which we have received, which were actually destined for US, but because of this uncertainty, that has actually flooded the European market as well as North Africa and Middle East.

That is one of the reasons. Another reason is that when this kind of opportunity are seen by the market players, particularly the warehouse guys or the wholesaler guys, they were also holding less because they were expecting price will come down.

As a result of it, they are not buying very big quantity. They are not giving big commitment.

Now, once this various multiple countries are making deals with US and more or less this uncertainty has tapered off and everybody is getting back to normalization, these things we already are observing in the reflection of price realization both in India and export market. That's why Sumeet has suggested is that you might be seeing much better improved fortune in Q4.

Got it. Just one last question on the PET resin plants, both the plants that we have.

What was the capacity utilization in Q3 and again the same, what are you guiding for in FY27?

Egypt plant operated at about 45%, 46% capacity utilization in quarter,

and

for the 9 months, about 57.8%. In fact, this was on back of the commissioning of this Egypt plant in the Quarter 4 of last year.

In very first year in 9 months of operations, we have seen utilization close to about 60% since commissioning last year. India's plant, Panipat plant for PET chips in fact had the overall 9-month capacity utilization of close to about 79%.

For the quarter, again for the same reason, it was slightly less compared to previous year at 68%.

Is it fair to assume full capacity utilization in the coming year?

In the coming year, in fact, we'll see number one, this capacity utilization steadily improving, and from a 9-month utilization of 58%, 60%, we should see Egypt plant utilization in the range of close to about 80%. For Panipat plant, we expect this to be further improving from the current level of 79% to upward of 85%, 90%.

Understood.

Chirag, if I can add to what Sumit's commentary is that we have also technically improved ourselves in Panipat more into BG-grade chips. What it means is that even if we stay at the similar kind of utilization, our realization will be much better, our margin profile will be much better in Panipat.

We are not focusing on, say, 75%, 80% for initial 2 years is pretty good utilization level. If you cross 80%, then you are thinking of a 90%, you are thinking of a putting up a new plant, which is not required actually at this point of time because given that government's initial phases of implementing PET chips and recycled PET chips and all these things, situation what has tumbled out is that we are focusing on more value addition.

If government implementation more and more expanding across the industry, there will be more demand for value-added BG product or bottle-grade chips product, of where we are focusing more on that. Going forward, you can say that we are definitely going to increase our capacity utilization, but quality value utilization.

Understood. That would be it from my end.

Thank you.

Thank you, Chirag.

Thank you.

What is the kind of margin you are looking at? Right now you're at EBITDA margin of 12%.

What is the kind of margin you are looking at for this quarter as well as for the next year?

Overall, if you see, in fact, we are still not at 12%. We are at 11.5% kind of margin for the 9 months.

We definitely see that margin, while it has shown on a sequential quarter basis, it has seen an expansion of 200 basis points over the previous quarter, which is currently at for 9 months it's about 11.5%, we see it in the range of about 12% or so for the year as a whole. Moving forward, as the product mix improves, as we are able to realize the price realization is better for our packaging films and for value-added films, that should show a consistent and steady improvement.

As for this fiscal, we expect this to be in the range of 12% or so.

Can we expect a better margin next year?

Yes, that's exactly what in fact we see it as unfolding because as a result of, I said, that improved product mix, we see a more of cost rationalization and also better price realization from our overseas and Indian market. All this translating into a better EBITDA margins improving from 12% further upwards.

This is what we can see as the trend as the expectation in the next fiscal of FY27.

Yeah. See, another thing, these three plants that are coming into operation this quarter and next quarter, I think what the projection given was that these three plants will give an incremental turnover of ₹2,000 crores with a margin for these three plants at 20%.

Are you sticking to that?

I think just to place it in the right perspective, these three plants, once commissioned, the numbers which are indicated or what we're discussing is in context of the full capacity utilization of these three plants. As you naturally expect, and it's very very much expected, that this utilization will be a ramp-up over a period of time.

Say for the next fiscal, if we are having 60%, 70% utilization, we can accordingly calibrate the numbers. We expect on a full capacity utilization, yes, these numbers do hold good, and we should get an incremental revenue on account of these three projects contribution of close to about ₹2,000-₹2,500 crores with the margin which it's not 20%, between we can expect a high-teens margin there.

Okay. Okay.

Thank you. Thank you.

Thank you.

Namaskar, sir. Hope I'm audible.

Yes, you are.

Yes. Sir, as you mentioned that there were external factors that led to lower utilization for the film segment, especially domestically.

In terms of the exit of Q4, what should be the film segment utilization levels that we may expect? Or as an entity including aseptic as well as film packaging, everything, where should we land for Q4, which is seasonally also a better quarter?

Yes, when we talk about Quarter 4, we'll have to basically look at it more, I'd like to give a more nuanced response to that, coming from different segments. For packaging films, to start with, as we see, this was a quarter of softer demand.

This was a quarter of pricing pressure. Definitely that all translated into a little bit I'll say resilient, but not robust performance for the quarter.

Having said that, for Quarter 4, for packaging films as such, we expect that now the challenges is behind us, and which is very much reflected in the current signals that we're getting from the market. As you are aware, the prices have firmed up.

In fact, it has held up and now holding up at the level of ₹110 or thereabout for BOPET and likewise for BOPP. If you see in the quarter performance, we also had a definitely a marked improvement in our flexible packaging business, contributing to the overall revenues.

While overall numbers stayed one, but at the same time within that, if you actually a little bit analyze, you will find the packaging business has already started showing signs of improvement from the successful GST transition. Also we expect that a lot of de-stocking, which is over, will result into much better prospects for flexible packaging business.

Aseptic business, as you rightly said, the Quarter 4 definitely is typically one of the better quarters, Quarter 1 being the best and Quarter 2 also is very good. All that for the different segments, I think will looks good, looks promising for us for Quarter 4 overall as the performance.

On the back of this behind us, we expect these numbers to be much, much better for Quarter 4 as a whole. Definitely, as we talked about the three projects near commissioning, I think the full impact of that or at least a substantial impact of that will be also seen in the fiscal '27.

Here on, in fact, I'm very confident that we see, starting Quarter 4, improved trajectory, which we will be more particular about rather than chasing a number.

Right, sir. Sir, you mentioned about prices for the films holding, and so can you give some color on how the trends are shaping up for the commoditized films for both BOPET as well as BOPP for the month of February or what was January and February trends?

In fact, if you see, it had gone all the way low of almost ₹90 per kg. We are talking about BOPET films, which with a steady increase and also a part of the conscious strategy to some extent, has resulted and the pricing pressure from import of those films now subsided.

As a combination of these things, the prices have been steady, have held up, and now reached a level of close to about ₹110 on the BOPET side. Likewise on BOPP, if you see the prices are for the different grades, which is TNT and NTT, you see the prices of NTT largely the segment that we operate in is the prices of ₹120, ₹121 per kg now, which has again improved significantly from the previous month.

Sir, have the RM also moved in that bracket and putting pressure on margins, or these are all demand-led and RM being firm, these conversion margins are higher?

RM, it's actually an interesting aspect that we need to understand that RM was also to a great extent also to do with, to some extent, as we gather from China. As RM was in fact weighed down by a lot of imports from China and because of Chinese producers more chasing the volume than the price, but we understand off late, there has been a conscious shift or at least direction from Chinese government to rather focus more on holding the price and not chasing the volume.

With that, we expect that off late, the trend has been that RM prices have been more consistent. Moving on, I think it should be more tracking the RM prices rather than being moving in different direction.

Largely the prices uptrend and all will be underscored by the same trend being followed in the raw material prices.

Sir, last point, come again, I missed you.

I was telling that raw material prices, in fact, have now shown some kind of steady trend. To some extent, it was also to do with what we gather from the landscape is that there is a direction in China also about focusing not on chasing the volume, not on increasing the volume, but focusing more on price realization, which has meant that there is no undue pressure on the raw material prices, which has also reflected in the firm prices for the packaging films.

Largely we feel that this trend, which tracks the raw material prices to continue, and that's where we feel that there will be some kind of steady trajectory for both the raw material as well as for the end packaging films prices.

Right, sir. Now coming to the debt part, as earlier first participant, Aman sir has mentioned about the debt being at the higher levels, I think so.

Just a case in point, sir, what are our current maturities going ahead for the next financial year? I think so peak debt is our gross debt is ₹8,000 crore, net debt.

What is our first year current maturities for the coming ensuing year?

In fact, when we talk about the debt profile, this is actually important also to understand that, number one, it has to be also seen that we see an improvement in the debt profile in the sense that cost of funds, we see it's maybe a little premature for me to give specific, but we are working on a plan where we see cost of funds steadily going down. As we are significantly done with three projects' capex plan, we feel that combination of three factors, which is like the three projects' major capex cycle being over, number two, the translation or result of this into a positive improvement in EBITDA, and number three, the cost of funds is expected to come down further based on certain plans that we are working on, we see this debt profile and moving forward, it will give you a lot more comfort to all of you.

Sir, can you give me the current maturity part? Then, sir, a small point.

Even with the rationalization of cost for the finance cost is going to rise since we will be capitalizing projects in the ensuing two quarters. The absolute number will go up.

At the same time, given the repayment cycle, it's a kind of offsets each other. As you rightly said, with the capitalization with the capex spend part, so that way, the debt part will not be showing an increase on that count.

At the same time, very rightly pointed out by you that it will reflect in that being expensed out, which will definitely mean slightly higher interest cost per se. What I was alluding to was the cost of funds.

Cost of funds, we expect that to come down based on the plans that we are working on.

What is the current blended cost of fund, sir? My last two questions.

Current blended cost of funds will be about 7%, 6.9% to 7% blended cost of funds.

Okay. Can you give the number for the current maturity for next year?

It will be close to about ₹1,450-₹1,500 crores, the CPTLTD, the current maturity over next 1 year.

Right, sir. Thank you, sir.

I'll join back.

Thank you so much.

In the last earning call, top-line growth guidance stood at 5% and EBITDA to be in the range of ₹1,800 to ₹1,850 crores. Are we confident of achieving the same?

Can you provide some guidance range for EBITDA margins?

In fact, EBITDA margin, I said that for the FY26 fiscal, we expect it to be in the range of 12%, translating to an EBITDA which largely should hold the guidance given earlier of ₹1,800 to ₹1,850 crore for the year. We are confident with this improved performance in Quarter 4, which we are expecting and we are witnessing to some extent.

We feel that that guidance holds good in terms of EBITDA expected numbers for FY26.

Sir. Got it.

Thank you.

Thank you.

my question is that we are setting up a liquid packaging plant in Egypt and we have already expanded our capacity in India. Since lot of export was happening to the market where Egypt will cater, do we think that since export market will now take care by Egypt plant, how we will sell from this Indian plant so that we can fully utilize the capacity here?

Largely if you see, right now at 8.5 expected 8.5 billion packs of capacity of number of packs for the fiscal is largely being catered to by the plant in India, which is at Sanand. Of course, you know that 7 billion capacity we expanded by another 5 billion packs to 12 billion packs here.

Given the demand, which is from overseas, which is largely expected to be catered from the plant in Egypt. Why we chose Egypt was also because you'll realize that Egypt generally is a destination, is a geography with stable tariff regime, very stable the trade relations with most of the major markets, including US and EU.

Egypt for us was a strategic decision to set up this expansion of facility. From there, we see that as a gateway catering to many markets which are not to the fullest extent were being catered to from here.

We see that this will be very complementary to each other rather than being in any kind of conflict in terms of market.

Sir, because 40% of our production the capacity when it was 7 billion pack, the 40% was exported. Now our capacity is 12 billion pack and the export market will be taken care by Egypt.

Do you confident that we will be able to sell 12 billion pack in India only?

Yes, I think this is where to some extent, this is also we are actually relying on two things. Number one, we expect an exponential growth in industry segment per se for liquid packaging.

On top of that, in India, we are already the market leader, and we expect to consolidate further that position from number two to the leader. That will mean that there is a lot of upside in terms of market demand within India, which of course will be catered.

That has been the reason for us to strategically invest in expansion of the capacity. Had we not been confident of the domestic market demand, we would have first added the overseas facility to more look at the export market.

We see this India market and also the larger global market being of great prospect for our liquid packaging business. Hence, both the things of the same capacity looks like we are confident of that being leveraged in a position to cater to the increasing market share and holding the margins to great extent.

That's what we expect from our liquid packaging business on a whole.

Sir, what is the reason for dip in the chemical business in this quarter?

Overall, in fact, chemical business, yeah, it was actually a combination of the change in the product mix and also something to do all derivatives and value-added products largely reflecting the broader trend in the underlying industry segment, which were also impacted. We feel just like other segment, it's also stabilizing, and we expect a better performance from the chemical segment as well.

Sir, one more question, that we have invested a lot of money in this commodity film business, whether it is BOPET or BOPP or CPP. Instead of putting money in commodity film where it requires a lot of capex, why we are not invested in value-added film where the capex is quite low, but the margin and are quite high?

Actually, in fact, if you see that's exactly what I was meaning by improved product mix, in the sense that on one hand, we have the base layer as the base packaging film, but most of the places, including Egypt, including Hungary and other places, we have also invested and added the capacity of, as I talked about, metallized, Alox, and ultra-high-barrier films. Those are now forming an increasing share of the overall packaging films segment because, on one hand, this does not mean the incremental capex of the same proportion, and also it helps in terms of the better realization.

Most of the evolved markets, in fact, there is a great demand for these high-barrier, metallized, value-added specialized films. That's where this segment, as things stabilize in US and other places, we expect that this investment and a strategic focus on this high value-added film segment will hold good for us.

Sir. Thanks, sir.

This is from my side.

We are going to start another year in another 50 days, and do you see any change on the EPR front as far as your company's concerned?

EPR, in fact, is very close to our heart. It is very strategic investment from our side, and we feel that this government is also equally committed to this thing, translating into what we believe should be something which should be of excellent prospect for us.

If you see the general guidelines about the EPR mix for rigid, flexible, as well as multi-material flexible plastic, where there were guidelines about 30% to 10% or 5% of this recycling material, government has only pushed it out to some extent, and largely it has meant that what was expected to happen by this fiscal is only going to play out in the coming years. There has been the window available for next 3 years to make up for what was not implemented now.

In our view that shows the commitment of government of the highest order. We feel that this will mean that sooner or later, as more and more manufacturers adopt this, it will help our strategic investment in this and should hold good for your company.

Do you see as a result, your margin also coming up?

Yes. Overall, in fact, we see as this actual implementation of this happens, that will largely track the increased utilization.

We being one of the best entrenched players in the recycling capacity, we will be the early beneficiary and should be able to get the benefit of our significant strategic investment in that as it starts getting implemented, resulting in the numbers of this renewable mix.

Thank you. Thank you.

thank you for the opportunity. Sir, as you mentioned that the current maturities are taking up ₹1,450-₹1,500 crore, sir?

That's the number correct for the next year? Yes, that's what.

For the next year, should we expect the debt to decline by that number itself or on an absolute number? Because net debt to EBITDA would be a misnomer with the contribution from the new projects.

Still, we are just contemplating and planning for the next year. On an absolute number basis, will this number be reduced, the closing number for December?

As I said that in isolation, looking at the net debt number will not give the right perspective, in the sense that we see this EBITDA performance for the next fiscal to improve, making this leverage ratio, net debt to EBITDA ratio, which in our opinion has peaked at the current level, to improve. Now with the repayment or current portion of the long-term debt repayment over next 12 months of ₹1,400-₹1,500 crores, and there is a remaining capex of close to about ₹1,200 crores, largely it should square off.

We don't expect any significant addition in the debt, but at the same time, improvement in the leverage profile based on the improved EBITDA is what I can say, not necessarily reflecting in the reduced debt number, but we can see improvement in the leverage ratio.

Sir, the ₹1,200 which you mentioned right now will be spent for the next financial year in which project?

Some part of this, as we talked about, these projects which are yet to see the full completion or commissioning, Yeah, we have about 36 million we have about close to about ₹350 crores of capex spent which is remaining after the Quarter 3 for our Egypt aseptic plant. We will have for remaining capex of close to about ₹110-₹120 crores for the recycling plant at Noida.

We will have the next one will be the BOPP Dharwad plant expenditure. All put together, that is the residual capex which, based on the current plans for the capex, seems to be incurred to a significant level over the course of next 1 year.

Given the repayment of this and remaining capex requirement of so much, I think largely it will kind of offset each other, holding the debt level. I don't say that it will come down in the immediate year, but this has to be seen in the context of the improved EBITDA and resulting in a leverage ratio being better, is what we can expect.

Sir. That point is well taken.

Now just to conclude, sir, we are operating in various geographies. In the net debt numbers, if we could provide us in next time in the presentation with geography-wise working capital debt as well as long-term debt, so that will suffice from understanding of where the debt is currently being held.

That will give us much more clear picture about the same. Sir, hello?

Yeah.

That bifurcation would suffice a lot of our queries, where the debt is hold in which geography. Then we can contemplate about the currency transmission and other issues also, the risk part there itself.

That is different. My request is that if one can look forward presentation of debt geography-wise segmentally, so that will suffice the issues.

Then we are operating in all across the globe. What kind of systems, IT systems, SAP are in place wherein we get real-time position of all the plants that are operating across the globe?

Or do we need to accumulate data post the quarter ends? How do we reconcile things, sir?

I think there were two parts to your question. One was related to debt profile, and you were specifically looking at this split of long-term and working capital, and also to get some sense of India and overseas.

In fact, probably kind of having an inkling of this, and from our side, if you actually see slide number 24 of the presentation shared, there is already a profile, a split given of long-term debt and working capital. Long-term debt is about 74% of the total debt, and working capital and short-term is 26%.

Likewise, within the long-term debt, there is a split given of domestic and overseas. Domestic at 40% and overseas at about 60%.

Largely, you will also see this also bringing out a very clear pointer that 60% of the overseas business is in line with our major growth plans which are from overseas. This debt is aligned to our capex investment, major growth plans, and that largely is being reflected in the split between domestic and overseas debt at 40-60%.

Coming to the second point which you made about the IT system ERP implementation, as a policy, in fact, in all locations, we follow the uniform ERP, Oracle. That is already implemented across all locations, all entities.

There's nothing like quarter end, screaming for the numbers and trying to collate those numbers based on a parallel Excel kind of MIS. That is very much part of the ERP implementation which has been done across all the entities, all across the geography.

Okay. Then, sir, what should investors read into the always declaration of result on the penultimate day of the statutory requirement?

Every quarter, either our results are declared on 10th, 11th, or 12th, that is the penultimate day remains, or 14th. In fact, sir, since we are on call of UFlex, we should discuss only the industry itself, the entire concept for the film industry, every results for the packaging film industries are at the fag end, either on 10th to 14th are the numbers.

We will be speaking to other companies on their platform, but would like to know from the UFlex team that what remains pending that we need to come up with results only on the penultimate day?

Number one, first of all, let me assure you that this is not because of anything pending as such. This is not something to do if it is related to the ERP or Oracle system implementation, as I told, that is something which is already in place.

It is not something results in any holdback or delay in terms of getting the data. We take your point that penultimate day or a day before and all, maybe something that can be a pointer, can be a suggestion for us to look at.

Having said that, I think about other industry players, I should not be commenting on that, but maybe to some extent, we being the industry leaders to some extent, this may also be somewhere closer to there's no major industry players announcing the results. I take your point.

I think this is a suggestion which is welcome suggestion, and it is not for any kind of constraint or anything. It is largely something that we can talk about.

I will refrain from talking about other players in this who have more or less, as you rightly said, announced around the same time. That part I will not comment on, but I take your suggestion as a welcome suggestion to see if we can actually push it a bit ahead.

Yes, sir. Just look at the bottleneck and get that sorted out.

This will help your investor community, and since we set the benchmark, the other people will also follow suit. That is what my understanding was.

Lastly, sir, one more request, if we could also have on our conference call our Vice Chairman, CEO, Mr. Anantshree to spare time with the investing community since there is no representation from the promoter.

Although, sir, this is not to undermine your or Surjit da or Pandey ji's significance or credibility, but it is just a humble suggestion from minority shareholders that there should be some representation in one form or the other, either on a half-yearly basis or on an annual basis, wherein we hear from the promoter who are also partner with us in this entire profile. I think so all other are professional people, including you, Surajit da, and Pandey ji, who are conducting and answering to us during the calls.

That's again a humble suggestion if that could be deliberated on the merit of it and look forward.

No, most definitely. I think that is a suggestion which is definitely worth taking home.

As you rightly said that, no, end of the day, in our own humble ways, we try our best to do justice to this presentation. I understand there is a difference always, in terms of strategic vision in the roadmap ahead, hearing it from the promoters does have a different impact, at least in terms of vision sharing.

This point is well taken. We will definitely take it to the promoters to hear it.

Sir, only to add to that, vision and everything is being informed by them to you, and you are deliberating and explaining to us. Am I correct on that front, sir?

No, that point I will say that is at this point with all humility, I'll say that's something which basically needs more understanding. It is not something that we hear and we are communicating to

you.

This is actually from the management side, with all responsibility. This is something which is on behalf of UFlex, whether you hear it from Mr.

Anantshree Chaturvedi or from us. It will be the same thing coming from the

same platform.

At the same time, your hearing it in the strategic vision ahead, of course, there can't be any substitute to the promoters, the founders. That point is well taken.

Yes, sir. Yes, sir, with all humility, I made my submission, sir, not to pinpoint on any aspect.

We are truly satisfied with the way the calls are conducted, presentations are given, updates are sent. No questions on that, but we would definitely want to have our promoter representation on the call going ahead.

That's all from my side. Thank you, sir, and all the best to the team for the coming ensuing quarter, sir.

Thank you. We need your wishes.

Thanks a lot.

Thank you for joining us today. We appreciate your time, questions, and continued support.

The transcript of this call will be made available shortly on our website at www.uflexltd.com. We value this platform as it enables us to engage meaningfully with our investors and stakeholders, and look forward to keeping you updated on our progress in the coming quarters.

Wish you all those present here, thank you.

Wonderful experience interacting with you. We welcome your questions, suggestions, a lot of insights, and look forward to engaging with you again.

Thank you so much.