UFlex, India’s largest integrated multinational flexible packaging and solutions company, reported second quarter fiscal 2025 unaudited consolidated net revenue of Rs. 38,532 million. Normalized EBITDA for the quarter was Rs. 4,383 million and normalized EBITDA margin was at 11.4%. Profit before exceptional items and tax for the quarter was Rs. 616 million.
In its meeting on November 13, 2024, the Board of Directors approved and took on record the unaudited consolidated financial results for UFlex and its subsidiaries for the quarter and half-year ended September 30, 2024.
Q2 FY25: Maintain Growth Momentum in Volume, Revenue, and Profitability
The strong growth in the second quarter of fiscal 2025 carried forward the momentum from the previous quarter. Consolidated sales volume grew by 10.9% YoY and 5.9% QoQ. Packaging films (consolidated) sales volume increased by 14.6% YoY and 8.0% QoQ, while packaging (Flexible Packaging, Liquid Packaging and Holography) sales volume witnessed marginal decline of 0.7% YoY and 1.4% QoQ. Continuing the momentum, Liquid Packaging achieved capacity utilization of 93.2% in Q2 FY25 vs 82.9% in Q2 FY 24, resulting in sales volume growth of 17.6% YoY. Flexible Packaging sales volume grew 6.8% QoQ.
Consumer spending in the FMCG (Fast-Moving Consumer Goods) and Food & Beverage (F&B) sectors is closely linked to overall economic growth, with changes in disposable income, purchasing power, and consumer confidence having a direct impact on the demand for everyday products and services. The economic environment remained challenging during the quarter. The Consumer Price Index (CPI) rose from 3.65% in August to 6.21% in October, while food inflation was 10.87% in October from 5.66% in August 2024 (as per MOSPI, GOI). This persistent rise in inflation has put pressure on disposable income, spending, and overall consumer sentiment, affecting demand in the FMCG and F&B sectors —both of which are key drivers of the flexible packaging demand.
UFlex, however, witnessed a noticeable shift towards premium and branded products, presenting an opportunity for steady growth. Furthermore, rural demand is pivotal in driving the FMCG demand in FY25. Overall, the FMCG sector saw stable demand trends in the September quarter as rural volume growth outpaced urban markets for the third consecutive quarter. Rural India FMCG volumes grew 6%, while urban demand grew only 2.8% (source: NIQ).
In the current quarter of fiscal 2025, UFlex delivered its first SpeedPlus25K filling machine with a capacity of 25,000 aseptic liquid cartons per hour and secured a repeat order after its impressive operational performance. Asepto’s SpeedPlus25K high-speed filling machine, combined with an additional 5 billion pack capacity, will enable UFlex to engage a wider range of high-volume customers in India and internationally.
Packaging Film Business
Packaging Films overall production volume increased by 8.2% YoY to 128,880 MT in Q2 FY25, up from 119,109 MT in Q2 FY24. Overall Capacity utilization rose by 280 basis points YoY, reaching 83.4% in Q2 FY25 compared to 80.6% in Q2 FY24. The Packaging films sales volume and revenue demonstrated strong YoY growth, with sales volume increasing by 14.6% and revenue by 23.4%. Overall Packaging film revenue for Q2 FY25 stood at Rs. 24,836 million, up from Rs. 20,123 million in Q2 FY24.
Excluding India, packaging films revenue grew by 8.4% YoY and 4.2% QoQ, reaching to Rs. 18,843 million in Q2 FY25, compared to Rs. 17,389 million in Q2 FY24.
India Packaging Film: Strong Growth for the Second Quarter in a Row
The business outlook for packaging films showed significant improvement in Q2 FY25. UFlex India’s packaging films production volume grew by 10.4% YoY and 10.8% QoQ, reflected strong operational performance. Consequently, the Capacity utilization rose by 750 basis points QoQ and 320 basis points YoY, reaching 77.1% in Q2 FY25, compared to 73.9% in Q2 FY24 and 69.6% in Q1 FY25. Sales volume followed suit, grew by 10.8% YoY and 7.3% QoQ, driven by sustained demand across markets.
Americas Region (USA & Mexico): Demand Growth Drives Strong Performance
In Q2 FY25, revenue from packaging films in the Americas region grew by 16.3% YoY and (-) 0.9% QoQ, at Rs. 6,374 million from Rs.5481 million in Q2 FY24. Sales volume in the region continue to grow in Q2 FY25, an increase of 27.7% YoY and 14.2% QoQ, reaching 30,899 MT, up from 24,202 MT in Q2 FY24.
Fully equipped to cater to the demand of the green films: The North American market, particularly USA, has led the way in PCR green films consumption, fueled by consumer and industry-driven sustainability efforts. Flex Films USA is well-positioned to meet the increasing demand for green PCR films with our patented ASCLEPIUS™—a 90% recycled PCR PET plastic film. Both our USA and Mexico operations are fully equipped to handle the growing demand for PCR green films in FY26 and beyond.
Europe (Hungary, Poland, CIS): Value-added Films Maintain Growth
In Q2 FY25, packaging film sales volume in the region increased by 38.9% YoY and 5% QoQ, which led to the revenue growth of 46.2% YoY and 8.0% QoQ. This strong performance reflects sustained demand for the packaging film business, contributing positively to overall business growth.
In Q2 FY25, Packaging film capacity utilization in Europe rose significantly, increasing by 1,020 bps YoY to 84.1%, up from 73.9% in Q2 FY24. Packaging film Production volume grew by 27.7% YoY, reaching 34,671 MT compared to 27,156 MT in Q2 FY24. This production growth was largely driven by the commissioning of the CPP film line in CIS country which achieved capacity utilization of 49.5% in the quarter. The CIS region BOPET line operated at 111.8% capacity utilization, while the Hungary plant achieved 108.4% capacity utilization during the quarter compared to 83.5% in Q2 FY24.
Super-specialized barrier films typically take a long time for customer approval. UFlex’s Ultra High Barrier (UHB) BOPP film, which serves as the counterpart and substitute for SL8, has already been approved by certain major customers and UFlex is confident of obtaining more customer approvals in the near-term.
UFlex plans to raise its sale volume to 30% in value-added films as part of its strategy to expand its range of specialized, high-value barrier films. The Hungary plant is a key to achieving this growth, with the capability to produce up to 45% of value-added film relative to its total film production volume. This strategic emphasis on high-value products highlights UFlex’s commitment to innovation and meeting the latent market demand for specialized packaging solutions.
MEA (Dubai, Egypt, Nigeria) Region: Global Network Optimization Boosts Growth
In Q2 FY25, the Middle East and Africa (MEA) facilities had a flat growth in the production volume, reaching 41,229 MT, up from 41,228 MT in Q2 FY24. Capacity utilization reached 82.9% in Q2 FY25. The flat production volume and capacity utilization in the regions are expected to improve in H2.
Sales volume in the MEA region rose by 3.4% QoQ but declined 4.2% YOY to 35,281 MT in Q2 FY25, compared to 36,845 in Q2 FY24. MEA region revenue witnessed growth of 2.5% QoQ, reached Rs. 6,110 million in Q2 FY25 compared to Rs. 5,961 million in Q1 FY25.