Thank you. Good evening, everyone.

On behalf of Arihant Capital Markets, I would like to thank all of you for taking time and join us on UFlex Q1 FY27 results conference call. From the company's leadership team, we have with us Mr.

Arun Kumar Sharma, President - Finance and Accounts and CFO; and Mr. Surajit Pal, Vice President - Head of Investor Relations.

We will open the call with opening remarks by the management, followed by a Q&A session. I would now like to hand over the call to Mr.

Surajit Pal to make the opening remarks. Over to you, sir.

Thanks, Ashvath. Good evening, everyone.

Thank you for joining us today for the Q1 FY27 earnings conference call of UFlex Limited. Before we begin, I would like to briefly introduce Mr.

Arun Kumar Sharma, our President - Finance and Accounts and Chief Financial Officer. We are pleased to have him with us and look forward to his perspectives on the company's financial performance and outlook.

Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements, which are predictions, projections, and 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 risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Thank you.

Over to you, sir.

Thank you, Surajit. A very good evening to everyone joining us today.

On behalf of entire UFlex team, I extend a warm welcome to all our shareholders, analysts, and other stakeholders on this call. I am pleased to report that we have started fiscal 2027 on a strong note, delivering a clear acceleration in our overall growth trajectory.

Building on the momentum established in Q4 FY26, this performance reflects resilience of our integrated global business model and operational execution. Now we discuss on UFlex Q1 '27 performance.

Top line and earning momentum: consolidated revenue for Q1 FY27 grew 38% YoY to ₹53,972 million. EBITDA rose 92% YoY to ₹9,198 million, with EBITDA margin expanding 480 basis point YoY to 17%, marking our highest EBITDA performance in the last 21 quarters.

With 80% revenue contributed by overseas operations and 20% by India, our incremental revenue was ₹14,753 million in Q1. Packaging films, including chips, contributed ₹12,093 million of incremental revenue, while ₹1,988 million was contributed by the packaging business.

Normalized EBITDA post adjustment of ₹825 million on forex derivative transactions reached ₹8,373 million, which is 78% growth year on year, expanded to 15.5%. Our overseas operations contributed around 91% of the ₹4,410 million incremental EBITDA, reflecting a significant improvement in overseas profitability and driving the consolidated EBITDA growth.

Consolidated net profit after tax and non-controlling interest, PAT, was ₹4,233 million with a net margin of 7.8% compared to ₹580 million and a net margin of 1.5% in Q1 FY26. Now we'll discuss on the drivers of growth.

Overseas operations drive Q1 FY27 growth and profitability. Margin expansion was driven by operational leverage, stronger realizations, pass-through of higher raw material cost, currency tailwinds, and localized sourcing premiums.

Overseas operations, particularly in Egypt, Mexico, and Nigeria, alongside our India PET chips business, served as a key growth driver of our profitability. Total sales volume for the quarter reached 173,471 metric ton, which is 1.5- 1.7% year-on-year growth.

The expansion of volume by 136,186 metric ton, which is 4.9% year-on-year growth, supported by preference of sourcing by the converters from local regional producers of film across international markets. Overall packaging volume slipped 8.4% year on year to 37,285 metric ton, primarily due to strategic shift towards higher-margin products in India, flexible packaging business, and softness in aseptic packaging due to duty-free import at aggressive prices in Indian market, while overseas volumes were impacted by larger pack sizes mix and delayed slow disruptions in consignment deliveries due to West Asia crisis.

Next, I will provide some inputs on geography-wise volume split. In India, packaging films sales volume increased 9.1% quarter on quarter to 29,323 metric ton.

On the domestic front, packaging films demand improved sequentially as converters and brand owners gradually resumed purchases since price normalization in May and June. Demand softened year on year as Q1 FY26 had a higher base due to temporary supply shortage in the industry.

Americas sales volume increased 18% YoY to 31,724 metric ton. This was supported by the US government push for domestic production and onshoring amid evolving trade policies.

Constrained imports from West Asia and India are expected to sustain the positive volume growth through outlook ahead. In Europe, sales volume was flat YoY and stood at 35,653 metric ton amid continued pressure from low-priced imports, with demand expected to moderate next quarter due to seasonal holidays.

CIS BOPET film sales benefited from steady demand, while CPP volumes were impacted by increased low-priced imports. Middle East and Africa region volumes increased 16.5% sequentially and 49%- 14.9% year on year to 39,486 metric ton, primarily driven by strong local and regional sourcing as customers de-risked their supply chains and West Asia crisis.

Egypt led the growth, while Nigeria benefited from robust export opportunities and improving domestic demand. On our strategic expansion and capex front, we have incurred ₹4,782 million in capex in Q1, primarily allocated across four key projects: Egypt aseptic facility, ₹1,236 million; Mexico WPP bags, ₹205 million; Noida Sector 155 recycling unit in India, ₹320 million; and Dharwad BOPP line, India, ₹215 million.

We are making steady progress on key projects. 39,600 metric ton per annum recycling plant at Noida Sector 155 was successfully commissioned on April 30th, 2026.

80 million unit WPP bags plant in Mexico was commissioned on July 31st, 2026. Work on our greenfield aseptic project in Egypt, 12 billion packs, remain on schedule for commissioning in H1 FY27.

We enter FY27 with multiple growth levers gaining traction, including headroom for incremental production in India, Nigeria, CIS, and Mexico. Additionally, the recently commissioned 39,600 metric ton per annum recycling facility in Noida Sector 155 and 80 million unit WPP bags facility in Mexico will progressively contribute to revenue and EBITDA as they ramp up.

Higher utilization led by localized sourcing to de-risk the unscheduled supply chain disruption and a shift towards value-added packaging films will remain our key growth themes, supporting sustained profitable growth. While Q2 is expected to see some normalization from the exceptionally strong realization in Q1, our underlying growth trajectory remains strong, positioning us for FY27 growth and continued improvement in earnings quality.

Now we open the line for Q&A session.

Hi, am I audible?

Yeah. Very much.

My first question is how are the price realizations shaping up in India and the export market?

See, it will be difficult. I can tell you that price realization is up 30% as compared to when the war started in West Asia.

BOPP prices have gone up by 25% and BOPET prices have gone up by almost 30-35%. To be specific, from February '26 level to now, it is 25% higher on BOPP, and BOPET, it is around 35% higher.

Okay. Got it.

My second question is how are the raw material price trends expected to move in the future, and how correlated is that with the film spreads going forward?

See, raw material prices are also moving up, but not to that extent what the finished good prices are moving up. Because it is being normalized now, and prices are, I think, getting normalized as of now.

Are we planning for any new geographies, product lines, or M&A opportunities beyond the current capex pipeline?

See, right now we do only greenfield projects, and our project in Egypt aseptic plant is for commissioning, which will be done in H1, like we have said, and we're hopeful that we will be able to announce it very soon, that project coming on stream. That will give us a big flip on our revenue as well as on our bottom line.

Got it. The last question from my side would be given the relatively higher margin profile of liquid packaging with a peer reporting improvement from 5% to 6%, do we see an opportunity to further scale its presence in the segment to support our overall margin expansion?

Asepto has been little slower in expansion in this quarter, but going forward, that will be a key driver going forward. Because once our line comes up in Egypt, that will be a big revenue generator for us.

Plus we are also touching decent capacity in our existing Indian plant. I think we'll have a good revenue and good EBITDA margin going forward from that.

Okay. Got it.

Thank you so much, sir.

Thanks for taking my questions. Sir, main yeh janna chahta hoon ki FY27 as a whole year, kya yeh jo top line hai aur EBITDA margin jo aya hai, woh sustainable hai, sir?

Haan, dekhiye. Bilkul sustainable hai because jo revenue growth aya hai aur jo margin aya hai, it's not because efforts of one quarter or two quarter.

It's the efforts of last two, three years capex what you've done. Because aapko pata hoga capex aane mein time lagta hai.

It takes a lot of time in capex ramping up. Because any capex you put up, it takes three years to get to 100% potential.

Whatever capexes we are putting up now, you can see how they will unfold going forward. Whatever numbers we have achieved in Q1, they are very much sustainable.

Going forward, the momentum is very strong and we'll continue to show better results because our capexes are coming on stream now and more and more capacity utilization is getting in business now.

Sir, FY27 as a top line aur EBITDA margin ka kuch guidance bata sakte hain?

Generally, we should not give guidance because guidance in this today market scenario is very difficult. Things change very fast because of this geopolitical situation.

You are asking specific question to just respect as a as a investor, I think we're expecting 35% growth in our top line in this financial year. Similarly EBITDA also, we'll see the same growth coming up in this financial year as compared to last financial year.

Okay. Thank you, sir.

Okay.

Sir. Sir, in continuation to the earlier participant question, jaise aapne yeh bataya ki quarter two will see normalization.

If you could just dwell better, that means what should we work on in terms of normalization going ahead for Q2?

See, it's very difficult to benchmark anything quarter on quarter because a lot of things change in a quarter. If you benchmark against year on year, like what I just said that whatever revenue we achieved in FY26, we are going to achieve at least 35% more revenue in FY27.

Similarly EBITDA also will be higher by the same margin in FY27. You should look more year-on-year basis because quarter-on-quarter fluctuations can be unpredictable also sometime.

Year on year gives a better perspective how the company is growing. Both top line and bottom line, you can expect a decent growth of 30% plus in coming year.

Same growth will continue in FY28 also because these capexes what are coming on a stream, this year what two has come on stream, one is coming up in first half, they'll have a decent capacity utilization going forward, they'll give a very high margin and revenue in FY28 as well as in FY29. You should look at a long-term perspective till FY29.

We are seeing a visible and a very decent growth coming up because all the ingredients of growth are in place now. Capex is in place, capacity utilization is increasing, our operational efficiency has come up.

All these factors will deliver a very decent growth to the company in next two years time. FY27 will be a good year for the company, 28, 29.

You'll see decent growth margins coming up all these three years.

Okay. Sir, as you mentioned that I am not taking a myopic view, but just to understand and dwell further, when we look at our FY26 revenue, it was ₹15,000 ₹600, I think so, ₹15,660 crore or somewhere in that vicinity,

and

our profit before tax was to the tune of ₹420 crore. Correct, sir?

Now for this quarter itself, we have done PBT of ₹490 crore. Just to take that question forward, that 35% growth and the EBITDA part, we are already done with the year's profitability in the first quarter itself.

That was the reason why I would like to understand, when you spell out that there will be normalization going ahead, what is the band that you are referring to that we must keep in mind in terms of fetching the word normalization? See,

what we mean by this is that you're right. Very valid question you are asking.

This year, in first quarter itself, we are reporting a PAT of ₹423 crore, which is almost six times higher than I think Q1 '26 year on year. Whatever growth we are getting in FY27, we're getting growth from all the geographies which are in a very optimal tax bracket margins.

Our tax expense is also going down quite significantly because we are generating big margins from Egypt, big margin from European and US territory plus Mexico, other places. Our tax expense will be much much optimized because of these region where we are present.

That will give a big boost to our PAT margin going forward in FY27. Normalization doesn't mean that we are talking something going down.

Normalization means is that this quarter has seen a tremendous growth, but what guidance we're giving is that we'll grow by 35%, which is a very good growth in today's market conditions.

Okay. Then investors will look and compare Q2 results from the previous Q2.

We are eyeing a minimum 35% growth in both top line, bottom line. That should be the understanding.

See, in the beginning of my remarks, I told you very clearly, don't benchmark any company quarter

on quarter. Because as a good investor,

you should benchmark year

on year. No issue, sir.

We should not Year on I just kept it year on year only, sir.

If you are benchmarking quarter on quarter, I can say that we will not let you down. I think you are fully confident, we are also equally confident.

As a prudent and a long-term investor, you should always look year on year. Because quarter on quarter, some shipment can get missed because of West Asia crisis.

Something can happen on a shipment, some shipment get delayed here and there. One shipment can make huge difference in a top line.

At say 30th June, we're not able to ship something, we shipped on 1st July, it will count in next quarter. Better you take year-on-year concept, that will be much better for you to analyze the company performance, which is going to be very healthy for next three years going forward.

Okay. Sir, now on the capital work-in-progress.

My voice is echoing. Hello?

No,

no, we can hear you clearly. Please go ahead.

Fine. Sir, on the capital work-in-progress closing balance, can you give some more color how is this number going to shape up with the Egypt aseptic unit getting capitalized?

By September, what would be the closing balance? Going ahead, what are our projects?

Where will we be putting our further money?

Yeah. Good, valid question.

I'll tell you, for this year, we have three we have four capex which you have done in FY27 or planned in FY27. First is Egypt one, which is coming up with a capacity of 12 billion packs, where we have already done a capex of over $100 million.

Now only capex what is remaining is $15 million. Not much capex is planned for Egypt now going forward.

Similarly Dharwad, which is Dharwad, India, which is a brownfield BOPP line, where we have done a capex of $10 million. There we plan a good capex of around 50-odd million dollars, which we are planning for FY27 and '28 put together.

Something will go in Mexico also. We have I think WPP bag is already announced, but we have done a capex of $54 million.

We're not expecting much capex to be done there now, all capex is done. Noida Sector 155, we have done a capex of $32 million, we are all done with that capex.

From this, you can see our capex cycle for this financial year is almost 75% done. Whatever capexes are remaining, which are new capexes of around if we put total all this will be around 100 $80 million capex we'll be doing going forward.

You can see from there that whatever capex we are putting up, we are putting with a very judicious understanding that they should start yielding results in next two years time. Because whenever the capex is put up, first year it is just 20% capacity, that second year it will be 50%, and third year it will be 100% capacity.

To keep the company growing consistently over years, we have to put capex. You can see wherever we have put capex in Egypt, Dharwad, India, Mexico, they're all yielding very good results.

Because of these capexes, you can see our numbers are showing where they are right now. These numbers are not just because we have done some magic in last one year.

The efforts are going on for last three years. That's why these numbers are coming up.

When I'm talking FY29, whatever efforts you are putting this year, they will show a good result in FY29. It's a continuous process of putting capex, milking those capex, and earning the revenue.

Because had this company been only present in India, then you would have seen we were in very tough spot. Because we are geographically so diversified, in this challenging situation also, in challenging times also, we are delivering a very good margins to our shareholders, very good top-line growth to our shareholders, which will continue till FY29.

Just to add to the Egypt part of the story and I'll join the queue, that is 12 billion packs. For this year, we will be ramping up the capacity and the contribution will be, sir, in what vicinity?

Secondly, for the Noida recycling, it is ₹30 million or $30 million, sir? I missed your number, the investment.

Noida, we have done $30 million till now, and which is the capex to be done. Not more capex has to be done there now.

You're saying Egypt, which we'll announce commissioning very soon. I think the trials are going on there.

The first year, if everything goes fine because plant, a lot of technical things to happen there, we can see around 30% capacity being utilized there. Out of 12 billion packs what we handle capacity, we can do 30% in first year.

Second year, certainly we'll reach around 60% to 70%. Third year, we reach around 100% capacity there.

You can see how the build-up will happen. Egypt being our second largest manufacturing site from UFlex global perspective, we are very well I think there to launch it very soon now.

You see the results coming up in Q3 and Q4 also.

Okay. Sir, about the BOPP line

Yes, ma'am, I will rejoin. Thank you, sir.

We'll wait for my opportunity ahead. Thank you, ma'am.

Thanks for the opportunity, and congratulation on good set of number. Sir, just want to understand this recent price in BOPP and PET price, are they stable at this higher level or how we should be looking at it?

See, prices are quite stable as of now. We don't see any major correction in the prices.

These are global situations evolving every day. Till this crude remains high and this crisis keeps on happening in West Asia, we see the prices being in the vicinity what they are currently.

If everything normalizes, you may see some correction in the prices. Our raw material sourcing and our finished selling prices will have the same margin what we have now.

We're not much concerned on the pricing front. We are concerned that whatever margins we make, we should continue to hold those margins.

We are confident that we hold those margins throughout the year.

Sure. That's helpful.

Secondly, means what should be the EBITDA band we should be looking at on an adjusted basis, means ex of currency, what we reflect around 15.5% was current this quarter?

See, currency is only ₹70 crore. It's not a big amount.

In ₹70 crore on ₹5,000-plus turnover is very minimal amount. Currency is not impacting much our margin.

It is ₹70-odd crore which can go here and there in every quarter, and you never know. Don't read too much in that currency because it can be negative also next quarter.

I think you should read margin as what I given the guidance in the beginning that we'll have 35% growth as compared to last year in the margins. In FY27, and similarly on the top line also we'll have that growth.

Okay. In terms of debt, should we consider this is the peak debt we have reached as of now from the immediate capex point of view?

See, first of all, let me just tell you, don't link capex and debt. Capex we're doing for growth, and if you don't do capex, how we grow?

Whatever growth you're seeing in the company today has been the result of capex we've done three years back. Today, what capexes we'll do, they'll give us a good growth in FY28, '29.

Capex you have to do because we can't be restricting ourselves in one geography. Otherwise, company will not be able to sustain all this geopolitical pressures, competition, and other things.

You want to be near to the customers wherever we have a big market. Like you see in Middle East, we cater through Dubai facility.

In US and other places, we cater to our Mexico facility. In Europe, we cater through our Poland and Hungary facility.

In Nigeria, we cater to African customers. All customers are catered mostly.

We are trying to be near to the customer so that this geopolitical what is happening, when shipment becomes so difficult from one place to other places, they don't affect us. We're de-risking our top-line model in such a way that we are present at least 75% of our turnover should come from near to our customer policy, that is what we are adopting.

That is on the capex front. On the debt front, I think we are very, very conscious of this that our debt was higher in FY26.

Our debt/EBITDA margin was around 4.5 times, which you would see in this quarter itself it has come down to 3.5. Going forward also, we'll ensure that we retain the same kind of leverage what we have as of now.

This leverage will come down by end of FY28 much lower once all these capacities what are utilized not to the 100% become 100% capacity utilization. Then you'll see our leverage going even below three times by FY28.

We are very much conscious, aware of this fact that leverage has to be under control, which is under control because we are paying all loans on time, all interest on time. That is least of our worry.

Our worry is that we have to grow with the complex environment what we are operating in. We should give good growth to our shareholders, which is around 30% each year on bottom and top line.

That is our first target now. I hope I have answered your question.

Sure. Sir, the last question.

We have mentioned that aseptic packaging, we are seeing some dumping and aggressive pricing in the imports. Is it normalizing now or how is it like?

What has happened in Asepto, we are getting a lot of duty-free import from Indonesia, where India has signed a treaty where duty-free imports keep on coming. Indian market is consumer market is growing at least 5% to 8% each year now.

The demand is also increasing. We are hopeful that even despite this dumping by Indonesia, the volumes requirement in India and other markets will be much higher.

This quarter, of course, our volumes are not grown so much, but value-wise, we have grown because whatever value addition price we're getting because now we are moving from normal films to value-added products, which can give us a better realization. Those are being done very aggressively now.

From Q3 onwards, you see Asepto coming back on track, which was little, I think, volume-wise, not the price-wise. It was little slow in this quarter.

Next quarter will pick up, and then because all this packaging industry is more linked to the consumer growth or FMCG growth in India, which we are seeing very good growth coming forward now. Because middle-class income is expanding from ₹20 crore to ₹30 crore now.

They'll be buying all these material, and packaging is something which is very integral to our growth in India, and everything in India is getting I think dispersed now. It's not people don't go and buy from the market.

They order. Packaging becomes a very critical thing now.

You'll see aseptic packaging is going to be a big driver of growth for the company going forward because it improves the quality of the product, it improves the life of the product, it improves the aesthetic appeal of the product. All these are going to help, and we have a capacity, installed capacity, of almost 24 billion there.

I think we'll be using much of the capacity by the year-end now.

Sure. Thanks.

That's it from my side, and all the best for the future.

Yeah. Thanks for the opportunity and congrats on great set of numbers.

First question on the Egypt Asepto. By when do you see this plant getting commissioned?

Have we received all the necessary approvals and accreditations from customers already?

Yeah. Those things are in progress, and we are very advanced on those things as of now.

That is why we are confident that in H1 this should be commercialized.

Because

I think we have got almost all the approvals now. Seeing the geopolitical scenario, we are saying H1.

It can be a little bit here and there, one or two weeks here and there, but we are targeting H1 as of now.

You mentioned 30% utilization for the current year. So 30% for 6 months or it was 30% annualized?

It will be annualized, no? Because we don't talk of a broken period.

We should always take annualized numbers into account. I think maybe once we again get assembled in Q3, you'll see the impact of the numbers.

You're expecting close to 2 billion packs in terms of volumes from the Egypt facility in the current year?

It should be around that. 2 billion?

Okay.

Chirag, Surajit here. Basically what Arun is mentioning is that 12 months, in one year post commercialization, that will be the number we are targeting.

For this year,

how much volume should we expect from Egypt? Egypt and total, like what is the total volume then coming from Egypt?

See, we are setting up a 12 billion capacity there. If we start operating on 1st October is what we are saying, then 6 months operation is there.

In 6 months, the facility becomes 6 billion. Out of 6 billion, you see if we use capacity utilization is 30%, you can very well say that's why I said 2 billion around that will be what will be used up in this financial year.

Okay. Second question is on the utilization of the operating profits.

You mentioned that the growth that we have seen in Q1 this year and even through FY29, you are seeing good growth because all your capexes are now coming to fruition. Broadly, what is the split that you see in terms of utilization?

How much do you see will go towards debt reduction? How much do you think will go towards capex?

If you have any number for let's say rewarding the shareholders in form of buybacks and dividends, how much would that number be? Because in the past, what we have seen is that you have taken all these huge capexes using both debt and internal accruals.

Going forward, what is your plan in terms of utilizing the cash flows? What percentage of it will go to capex, debt reduction, and rewarding the shareholders?

See,

Chirag, in any company, if you see if there's no growth opportunity, you do buyback of shares. We have seen in IT industry.

When IT industry was really under pressure, they did buyback of shares. In our industry, growth opportunity is so much that even if we don't reward our shareholders by buying back the shares, they'll get rewarded by increasing the wealth.

Either we reward shareholders by increasing the wealth or by doing buyback is one and the same thing. Our policy is that you should reward the shareholders by increasing their wealth, which you'll see in next three years.

I think wealth creation will happen so that shareholders will not have any point to complain that. We hope that we'll grow more than the benchmark.

Second, you asked how much debt reduction will happen. I have given you number already.

We have reduced our ratio from 4.5 times to 3.5. One time is a big reduction, 30% reduction in our leverage.

Going forward, what I'm saying is FY28, we'll be at three, which is further reduction. I'm not going beyond 28.

By 29, you can see if the same trend continues, there'll be much more reduction. Whatever debt reductions do happen, and surplus cash we generate, they'll go for reduction of that only, and the shareholders value will keep on increasing.

Be patient. Whatever we're doing, we are very conscious of the fact that we have to reward our shareholders either by way of generating the wealth or by buyback.

Buyback is something which is for the industry where there's no growth plan. We have a growth plan, we'll always reward our shareholders by generating a good wealth for them.

Got it. You mentioned FY29 a couple of times on today's call as as something that we should be looking at for growth when all your capexes will be commissioned and they will be running at full utilizations.

If you were to put numbers to it, for this year you have mentioned 30% plus 35% top-line growth and similar number you are expecting in the bottom line. Till FY29, what is the CAGR if we look at FY26 as a base?

What is the CAGR that I should be keeping in mind in terms of top line and bottom line? Any metric that you can provide which can give a better idea about what you're looking at in terms of FY29?

See, why we are talking FY29 more prominently as of now is because the aseptic facility in Egypt will be 100% utilized by that time. You can see 12 billion packs coming in market and giving the full returns to us.

Our recycling facility in Noida will be 100% up and running that time. WPP also will be 100% running up that time.

Even these three facilities will give a very good CAGR to the business as a whole. If you want to look at these CAGRs, I think we have to calculate these numbers.

I think if you because I don't want to quote any number as of now, I can quote 10% or something, but that will be misleading. What I'll request Surajit to share the number with you once we have the calculations.

All these three facilities when 100% come up online, you can see what kind of top line and what kind of bottom line will be there in the system at all. That will give a big flip to our top line as well as bottom line, hence we have very good growth.

I think CAGR from 26 to 29, four years, at least you should see 10%. That is what I feel.

We'll reconfirm to you these numbers. Surajit can confirm the numbers.

Sure.

Yeah.

Just a follow-up on the utilization of cash flows. I understand that you want to keep reinvesting because I agree that that's how you will see growth.

Maybe if you can guide me in a different way, which is incrementally whatever cash flows you will generate, and whatever you will apportion it towards capex, what percentage of it will go towards packaging films, and what percentage of it will go towards non-packaging films? Because I think in the last 3-4 years, there is been a clear shift towards high-margin, high-ROE businesses.

Most of your capital has gone towards the high-ROE segments, such as Asepto, now WPP bags, recycling. These three are your I believe high-margin, high-ROE verticals.

Incrementally, do you have any number that you have kept for yourself that okay, this is the total capex that we are going to spend, and how much out of that, this much will go towards packaging films, and the rest will go towards all these high margin verticals?

See, right now whatever growth you're seeing in margin is primarily coming from the value-added product what we are making. It's but natural that capital allocation will happen to these new sectors only.

Whatever capex we do going forward, at least 60% to 70% 60% to 70% will go into value-added products only. Balance can go into maintenance or regular products.

Because you see, WPP is coming up, Noida Sector 150 has come up, even Egypt is coming up. All this capital allocation is already been decided that we have to move from general product to value-added product to enhance our acceptability in the market, plus margin also will get improved because of that.

Major capex will happen in these value-added products, and capital allocation also will happen accordingly.

60% to 70% of the total capex, that will go towards Okay. That's very

Yeah.

Yeah. That's very great.

In terms of margins and ROE, I think it will be very good going forward. Yeah.

Sure. Thank you.

Hi. Congratulations for a great set of numbers.

I just wanted to know the 15.5% margins that you've given in this quarter, are they sustainable going forward, the normalized EBITDA margins?

See, in the beginning of the call, we said these margins are very sustainable going forward and not sustainable for this year, but going forward for next three years. Let me just add that 15.5% margin is something which we are working on it.

What guidance we're giving for FY27 is 30% top line and 30% bottom line growth. Similar growth we'll have next year also.

You can see what kind of margin we will be able to generate going forward. These are very, very margins which can be achieved with the kind of capex we've done, kind of focus we have on the value-added products now.

I think what market perception is and what market is treating us like this, it is going to happen in a long tenure basis.

If I calculate 35% growth on the EBITDA from March '26 numbers, it comes to 2,000 ₹500-odd crore. From that, we've already given ₹840-odd crore in Q1.

Then if I divide it in the rest of the quarters, it'll come to only around 550 quarter ₹550 crore. Then these EBITDA margin

See, everything is not mathematics, no? In business, everything is not mathematics.

You have to look from a full financial year perspective. That's why I'm saying we'll deliver for FY27 good results, and you can see 14% plus margin.

As of now, what we can perceive that will happen. If things remain as good as they are currently and no untoward incident happens on the geopolitical front, we'll give you a better results than this.

Okay. Don't

do calculate on mathematics-wise because it doesn't work that way in our business.

Okay. Thank you.

Hello. Am I audible, sir?

Yeah. Hi.

Yeah. Hi, sir.

Please go ahead.

Yeah. I had a question.

My question is on the lines of top-line growth. I wanted to understand you also noted that the revenue growth this quarter was primarily

Voice is not clear. Can you just Garvita, your voice is not audible.

Do you hear me clearly now? Hello?

Yeah. Please go ahead.

Yeah. I wanted to understand one thing.

You noted that revenue growth this quarter was primarily value driven, correct? Then volume expansion was very limited.

Could you please disaggregate this volume growth? What I want to understand is what percentage was driven by cost pass-throughs and inflationary pricing actions versus a structural expansion from a richer product mix or operating leverage?

Very valid question, I think, you have asked. Let me tell you, in our business, we don't carry much inventory in our books of accounts because prices fluctuate too often here.

Whatever gain you are seeing in our volume as well as in our prices, they are the prices which have been passed on to the customers. Whatever prices we achieved in this quarter, the prices may a little bit differ in next quarter also, but I think we are seeing quite stable pricing going forward.

Because things have become so complicated that anyone who can supply goods to the customers in a regular session, they look for an integrated player like UFlex, which is backward and forward integrated player. We get the first opportunity to supply to the customers, and they are willing to pay reasonably good price to us to sustain their supply chain.

Our supply chain is very strong. We are able to procure the raw material at a good price.

We're able to supply the material to them from our various geographical locations. All this pricing is not something which is one-off, but we have made in such a way that our business is commanding this prices, and we hope that we'll continue to have this pricing going forward also.

If volume growth also happens, you see the icing on the cake.

Okay. Are you saying that this price rise which were there in quarter one, we can consider that as a base price, and 35% growth which we are targeting for full year, that is going to be the volume growth for us?

I said 35% from FY26 numbers. Take that into account FY26 numbers.

From that, you can take 35% growth.

From the quarter one base, sir? Sir.

Yeah.

Thank you.

Yeah. See, if I divide your result between domestic and international, domestic the top line is up by 40%, whereas your bottom line is 15% of the total consolidated amount as far as domestic is concerned.

When do we see a turnaround in this figure so that this EBITDA or a PAT is on a proportionate basis to the turnover? That's question number one.

The second question is that you're talking of the higher profitability in the international operation because customers prefer local sourcing and you are forward and backward integrated. If you can expand on this also a little bit so that we have a better understanding of the same.

See, our 60% to 65% business is coming from overseas now. When we set up these facilities which are very good, and operating margins are much more overseas as compared to Indian business.

Okay.

Because in India, the passing of pricing to our customers is slightly difficult, whereas prices can be passed on much easily to our overseas customers. That is why we'll always generate overseas business.

Overseas business will always give a higher margin because the price at which we sell the product in overseas market is if I can give you ballpark figure, it's almost 2.5 times of what we sell in India. In India, the cost is also lower.

There the cost is also higher base. Despite the higher cost in overseas market, we get a better price realization and better margin there because customers are willing to pay that price.

In India, we have to very conscious of the competition, of the pricing what customers are willing to pay. Good part in India is that India is expanding at a very good pace in FMCG market.

If FMCG market continues to grow 5% to 8% what is expected as per the reports, then the packaging industry will also grow. If packaging industry grows, then UFlex is the leader in that.

We'll also grow here. Your very valid question that if India also catches up with whatever revenue and whatever margins we get in overseas market, you can see much, much better results.

We are just keeping things as it is right now. Our 60% to 65% growth will come from overseas market.

Rest will come from Indian market. In India, the volume will be much higher.

Pricing can be little softer here, whereas overseas the prices and volumes are growing at a very good pace. It's a company which has been deleveraged from one geography now.

We are present in India in a big way, Egypt in a second largest facility. Then we are in North America.

We are in African and Nigeria region. We are into European region.

We are into CIS region. You see all the regions we are covering now, and we expanded very meaningfully in all these regions where availability of raw material is there, and we can cater to every continent depending on the requirement.

That is how, because this is industry which has to be near to the customers, which we are always striving to achieve. I think we have achieved quite a few, but till FY29, we keep on expanding in this fashion so that even if something goes wrong in one territory, other territory performs, and our results are not impacted by just one territory impact.

Okay. Secondly, if you look at the volume YoY, the volume is up only 1.7%.

Can you give an indication how the volume you are expecting overseas, since you're talking about FY29, for say three years, '27, '28, and '29? See,

if you add up the capacities what are coming up, if I can add up, we should double our quantity in next three years time.

In three years time, you're talking of doubling in volume, right? In

volume. Yes.

Okay.

Right now 173,000 ton. Uh-huh.

Yes.

In three years, we should be doubling the volume because our WPP will be fully utilized by that time. Egypt will be fully utilized by that time.

Our India recycle facility will, which is just little bit twice, will be fully twice. By '29 end, you can see much bigger volumes going forward.

Okay. Now the takeaway is that

Yeah. I'm talking of '29, FY29.

Okay?

Yes. Doubling of volume by FY29 from what FY26 was there.

Yes.

Surajit, you said something. I just missed.

Hello?

No, I didn't say.

No.

Arun is only addressing.

No. He didn't say anything.

You want to say something?

No. It's okay.

Okay.

See, Kaushik, there are a lot of opportunities. If you look into our utilization graph this year, even domestic is currently only 70-73%,

plus

we have a lot of unutilized specialty segment things, something like say metallizer, something like say ultra-high-barrier film, where we have a quite a bit opportunity and we are currently utilizing around 30, 35, 40%. Those things will come up quite strongly.

Dharwad will another thing, which will come next year. As a result of it, as Arun said, we have pretty much de-risked our business model.

If one geography is down, another geography goes up. For example, West Asia crisis, for example.

Now because of that, what happened is that there are definitely a crisis of chips. Now what happened is that we have chips both in domestic market as well as in Egypt market.

Now that Egyptian plant is supplying to all our subsidiaries. Be it in Europe, be it in Africa, be it in Mexico.

We are supplying everywhere else. As a result of it, we have our own system.

Which is not dependent on others. As a result of it, our clients depends on us about our assurity, about our security of supply, and respecting the timeline to provide the film.

That's why they are ready to give premium. That's why they are ready to continue with that.

If you look into our peers also That's

fine. See,

there are a lot of inventory gain, which is not there actually with us.

That's why we don't carry much inventory in our books. Yeah.

Thanks. Now I have a fair share of the

Thank you. No more questions from me.

Hello, sir. Am I audible?

Yeah. Please go ahead.

Yes.

Sir, congratulation. I just want to know this you have said in presentation your interest cost come down by 0.5, and now the results are even much better, how you were able to reduce it?

Whether the rating improved or we can negotiate even better rate going forward?

See, our rating is AA- as of now, and we are dual-rated by CRISIL as well as by India Ratings. Whatever interest rate we are paying as of now, and whatever rating we are enjoying, I am hopeful that we should reduce our interest cost by 1% in next one year's time.

You'll see that even if we reduce by 1% going forward, that'll be a great reduction. That's why you can see the reduction of 0.3, 0.4% in this quarter itself.

By next one year, we'll reduce our interest cost by at least 1%.

Oh sir, great. Sir, one year or two year back, we were thinking about listing our overseas arm in USA.

Will it be a good opportunity now?

No, I think we are developing a good business model now. Once the business model becomes more robust, and we are able to deliver what we said till FY29, then our management will decide what to do because the business has to be evolved every year basis now.

Whichever territory, whichever region, whichever market gives us a good value, we can evaluate. As of now, I don't think we have any such thought process.

By FY29, certainly we'll again evaluate everything, that which market is good for us because we are in India. We have subsidiaries in Dubai, then subsidiaries all across the globe.

You see how does it span out. As of now, saying something out, that is very, very, I think, too early to say that.

On your interest part, I think I appreciate your question, and we'll strive to reduce it by at least 1% going forward in one year's time.

Great, sir. Sir, regarding this you said Egypt plant supplying, but recently this Bab-el-Mandeb also become a flashpoint.

Any update on that? Of course, your ships not coming from Saudi.

That is what I said, no? We are running a de-risk model now.

India caters to mostly India demands, and other areas cater to other areas demand. If somebody who's dependent on Indian export only will have a difficulty in supplying the material.

We have all across geographies and fully integrated, fully backward and forward integrated. That's why we are able to walk through these difficult times and give you the results what are there in this first quarter.

Going forward also, we are talking so confidently just because of this de-risk model what we started working on last three years. Going forward, this will be very much in place in next three years also.

You should appreciate our strategy that we are trying to work out in all geographies near to the customers.

Sir, if I can squeeze one more. Recently, our articles have been amended, and I see a lot of new unrelated, like paper, electronic device, software, hardware, infra, all added.

Is there any thought process going on in particular?

No. No thought process going on.

Basically, you see government is trying to upgrade the packaging industry also in a big way. We are also trying to upgrade the packaging industry.

We are also adding in the value-added products now, which can be paper, which can be other materials, to just to enable that whatever R&D is doing, and it should not remain in the R&D. It should come as a commercial thing for us.

We are enabling those things because in next three years, you may see a lot many products coming out from paper, all this packaging, everything. We are preparing ourselves for that, and it's good to prepare in advance and do things so that we are not caught up on a wrong foot when the decision comes out.

It's just a very thought-out process going forward to meet the demands of world over and to the industry what is evolving in this scenario.

Sir. You said some good news about

Okay.

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.