Uflex Ltd's Q2FY19 consolidated net profit rises 1% yoy to Rs96cr : In line with Estimates

The company’s consolidated revenue stood at Rs2,016cr, up 26% yoy and 6% qoq.

Nov 05, 2018 10:11 IST India Infoline Research Team

Uflex Ltd Q2FY19

Consolidated Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 2,015.80 26.3
EBITDA 259.61 13.0
EBITDA Margin (%) 12.9 [151]
Net Profit (reported) 95.69 1.5
***EBITDA margin change is bps

Packaging company Uflex Limited (Uflex) reported strong set of numbers in Q2FY19. Consolidated revenue was up 26% yoy (6% qoq) at Rs2,016cr, bettering street estimate of Rs1,853cr. Input cost pressure continued to mount resulting in gross margin contraction of 289bps yoy (104bps qoq) to 38.5%. The company kept a lid on operating, manufacturing and employee expenses. Consequently, EBITDA margin contraction was lower than gross margin contraction. At 12.9%, consolidated EBITDA margin contraction in Q2FY19 was restricted to 151bps yoy (12bps qoq). In absolute terms, consolidated EBITDA was up 13% yoy (5% qoq). A combination of high tax rate, high interest expenses and lower other income led to PAT growth of just 1% yoy (2% qoq). At Rs96cr, consolidated PAT was in-line with street estimates.

Other Highlights
  • The largest segment, flexible packaging, which contributes 96% to consolidated revenues, was up 27% yoy (7% qoq) in revenue terms in Q2FY19. The engineering activities segment, which contributes remaining 4% to consolidated revenues, saw revenue growth of 7% yoy (down 14% qoq).
  • Volume for the packaging films segment grew 10% yoy to 79,992MT, while the same for packaging was up 12% yoy to 21,089MT in Q2FY19.
  • The flexible packaging segment saw EBIT margin contraction of 59bps yoy (expansion of 29bps qoq). The engineering activities segment reported EBIT margin of 18%, implying expansion of 398bps yoy (contraction of 127bps qoq).
  • The company launched several new products during the quarter
               ASEPTO SPARK– Holographic packaging.
               FLEXGREEN - Series of UV-LED process colors for sheetfed offset printing on coated paper, paperboard and MetPet Board.
               FLEXGLIDE 1817 – PU based NTNK ink series.
              100% bio-degradable premium Lens Transfer Paper / Paperboard for carton packaging
              FLEXMETPROTECT and FLEXPET F – HP – two new BOPET films

Technical View:

Uflex Ltd is currently trading at Rs. 305.70, up by 4 points or 1.33% from its previous closing of Rs. 301.70 on the BSE.
The scrip opened at Rs. 309.80 and has touched a high and low of Rs. 310.35 and Rs. 299.75 respectively. So far 28,708 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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