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Quarterly Result
Particulars (Rs Cr) Q4FY19 Q4FY18 YoY Q3FY19 QoQ FY19 FY18 YoY
Total Revenues 2057.3 1813.0 13.5% 1979.3 3.9% 7957.2 6708.5 18.6%
Cost of materials 1234.4 1127.9 9.4% 1234.4 0.0% 4861.9 4035.9 20.5%
Employees Cost 176.2 141.3 24.7% 165.0 6.8% 662.4 588.8 12.5%
Other exps 389.9 320.3 21.7% 354.0 10.2% 1443.2 1204.4 19.8%
EBITDA 256.8 223.5 14.9% 225.9 13.7% 989.8 879.4 12.6%
Margins 12.5% 12.3% 11.4% 12.4% 13.1%
Depreciation 96.0 92.6 97.2 380.7 351.6
EBIT 160.9 130.9 22.9% 128.7 25.0% 609.1 527.8 15.4%
Interest 54.4 51.3 6.2% 56.6 -3.8% 217.9 197.1 10.6%
Other Income 6.7 5.0 3.8 20.7 20.0
PBT 113.1 84.6 33.7% 76.0 48.9% 411.9 350.7 17.4%
Initiating Coverage
Film Business:
Given the continued improvement in the market scenario of BOPET films, the management expects margins to
stabilize at current levels of Rs. 50-54/kg. The outlook for BOPET films both domestically and internationally remains
strong for the next 12 months. The company has announced a new BOPET film line in Nigeria.
The BOPP films, which form a small part of the company’s product portfolio, have seen an improvement in prices and
margins. BOPP film market is seeing gradual revival and is expected grow FY20 onwards. The company is also setting
up a facility in Hungary for films with a base of BOPP films.
Other expenses were higher by ~Rs. 56 Cr on account of one-off elements like, a JV in Israel where expenses to
replace certain parts were incurred and as per IFRS these expenses should be charged to P&L. Another reason for
such increase is an advance extended by one of the subsidiaries to a company which has gone into NCLT. Thus the
company had to make a provision. Excluding the one-time expense, the consolidated EBITDA margin would stand at
15.2%.
The tax rate during the quarter was higher due to fading away of tax exemptions in certain international facilities. Tax
rate is likely to be in the range of 23-24% for the coming year.
The expansion of the Hologram line in Jammu is yet to be completed and will take another 3-4 months.
The current gross debt (incl. Working capital) stood at ~Rs. 2100 cr.
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Uflex Ltd.
Exhibit 1. - Film Business Volume Growth (YoY) Exhibit 2. - Packaging Business Volumes Growth (YoY)
We expect Uflex’s revenues to grow at 8.6% CAGR from FY19-21E and EBITDA to grow at 9.9% during the same
period. PAT is expected to grow at 21% CAGR during the same period. ROE is expected to improve from 7.3% in FY19
to 9.0% in FY21E and ROCE shall improve from 9.5% in FY19 to 11.0% in FY21E.
We have valued the company on EV/EBITDA basis, as we believe that packaging business deserves a higher multiple
than the commoditized film business. We have valued Packaging business incl. Aseptic at 4.5x EV/EBITDA on FY20E
EBITDA and the films business at 3.5x on FY20E EBITDA and arrived at a target of INR 305, which implies 19.5%
upside from current levels. We recommend “HOLD” rating on the stock.
Film FY20E
EBITDA – Rs cr 701.4
EV/E Multiple 3.5
EV – Rs cr 2,455.0
Consolidated FY20E
EV – Rs cr 4,077.7
Less: Debt – Rs cr 1,878.0
Mcap – Rs cr 2,199.7
No of shares 7.2
Tgt price 305
Potential 13.2%
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Uflex Ltd.
Financials (Consolidated)
Profit & Loss FY18A FY19 FY20E FY21E Balance Sheet FY18A FY19 FY20E FY21E
Net Sales 6786.5 7957.2 8446.7 9358.7 Property and CWIP 3917.8 4005.2 4006.0 4180.5
% change 10.2% 17.3% 6.2% 10.8% Total Investments 43.7 14.7 14.7 14.7
EBITDA 879.4 989.8 1062.0 1196.0 Oth Non CA 196.4 343.6 260.8 260.8
EBITDA margin 13.0% 12.4% 12.6% 12.8% Inventories 796.8 843.5 915.1 1013.9
Depn & Amort 351.6 380.7 414.2 450.5 Debtors 1939.0 2045.5 2158.6 2391.7
Operating income 527.8 609.1 647.8 745.6 Cash & Bank 315.5 288.1 390.8 249.1
Interest 197.1 217.9 187.8 167.8 Current Ta x As s ets 0.0 0.0 0.0 0.0
Other Income 20.0 20.7 22.0 25.0 Other Current As s ets 435.5 377.3 437.2 439.2
PBT 350.7 411.9 482.0 602.8 Total Assets 7688.2 7959.6 8224.7 8591.5
Tax 41.7 93.5 115.7 144.7 Total Equity 3974.7 4304.3 4652.6 5092.6
MI & EO -1.5 4.5 0.0 0.0 Non Controlling Int. 4.9 0.0 0.0 0.0
Initiating Coverage
PAT 310.5 313.8 366.3 458.1 Total Borrowings 2079.4 2078.0 1878.0 1678.0
PAT margin (%) 4.6% 3.9% 4.3% 4.9% Total Provisions 32.2 46.2 46.2 46.2
Sh o/s - Diluted 7.2 7.2 7.2 7.2 Other Non CL 132.6 190.1 190.1 190.1
Adj EPS 43.0 43.5 50.7 63.4 Trade Payables 1196.4 1056.3 1173.1 1299.8
Cash EPS 91.7 96.2 108.1 125.8 Current Tax Liabilities 18.5 26.1 26.1 26.1
Qtrly-Consol Jun.18 Sept.18 Dec.18 Mar.19 Other CL 243.8 258.6 258.6 258.6
Revenue 1904.9 2015.8 1979.3 1048.2 Total Eq. & Liabilities 7688.2 7959.6 8224.7 8591.5
EBITDA 247.7 259.6 225.9 115.9 Cash Flow FY18A FY19 FY20E FY21E
Dep & Amorz 92.1 95.7 97.2 60.6 EBITDA 879.4 989.8 1062.0 1196.0
Op Income 155.6 164.0 128.7 55.3 Change in WC -225.3 -288.5 -44.8 -207.2
Interest 53.4 53.6 56.6 42.6 Tax -41.7 -93.5 -115.7 -144.7
Other Inc. 6.1 4.1 3.8 9.2 CF from Operation 612.4 607.8 901.5 844.2
PBT 108.3 114.5 76.0 22.0 Capex -275.3 -468.1 -415.0 -625.0
Tax 15.3 19.3 19.6 7.7 Oth Inc & Investments 10.3 49.8 22.0 25.0
EO -1.1 -0.5 2.4 0.0 CF from Investing -265.0 -418.3 -393.0 -600.0
PAT 94.1 95.7 54.0 14.3 Financing
EPS (Rs.) 13.0 13.3 7.5 2.0 Diviend Paid -30.4 -14.4 -18.1 -18.1
Performance Ratio FY18A FY19 FY20E FY21E Share Capital 0.0 0.0 0.0 0.0
EBITDA margin(%) 13.0% 12.4% 12.6% 12.8% Loans -22.7 -1.4 -200.0 -200.0
EBIT margin (%) 7.8% 7.7% 7.7% 8.0% Interest -197.1 -217.9 -187.8 -167.8
PAT margin (%) 4.6% 3.9% 4.3% 4.9% Others -78.0 16.9 0.0 0.0
ROE (%) 7.8% 7.3% 7.9% 9.0% CF from Financing -328.2 -216.9 -405.8 -385.9
ROCE (%) 8.7% 9.5% 9.9% 11.0% Net Chg. in Cash 19.2 -27.4 102.6 -141.7
PAT growth (%) -10.9% 1.1% 16.7% 25.1% Cash at beginning 296.3 315.5 288.1 390.8
Debt/Equity (x) 0.5 0.5 0.4 0.3 Cash at end 315.5 288.1 390.8 249.1
Valuation Ratio FY18A FY19 FY20E FY21E Per Share Data FY18A FY19 FY20E FY21E
PE (x) 6.3 6.2 5.3 4.2 Adj EPS 43.0 43.5 50.7 63.4
Price/BV (x) 0.5 0.5 0.4 0.4 BV per share 550.4 596.1 644.3 705.2
EV / Sales 0.5 0.5 0.4 0.4 Cash per share 43.7 39.9 54.1 34.5
EV / EBITDA 4.2 3.8 3.2 2.8 Dividend per share 4.2 2.0 2.5 2.5
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Uflex Ltd.
Disclosure:
This Report is published by Nirmal Bang Securities Private Limited (hereinafter referred to as “NBSPL”) for private circulation. NBSPL
is a registered Research Analyst under SEBI (Research Analyst) Regulations, 2014 having Registration no. INH000001766. NBSPL is
also a registered Stock Broker with National Stock Exchange of India Limited and BSE Limited in cash and derivatives segments. It is
also a registered Portfolio Manager having registration no as INP000002981.
NBSPL has other business divisions with independent research teams separated by Chinese walls, and therefore may, at times, have
different or contrary views on stocks and markets.
NBSPL or its associates have not been debarred / suspended by SEBI or any other regulatory authority for accessing / dealing in
securities Market. NBSPL, its associates or analyst or his relatives do not hold any financial interest in the subject company. NBSPL or
its associates or Analyst do not have any conflict or material conflict of interest at the time of publication of the research report with
Initiating Coverage
the subject company. NBSPL or its associates or Analyst or his relatives hold / do not hold beneficial ownership of 1% or more in the
subject company at the end of the month immediately preceding the date of publication of this research report.
NBSPL or its associates / analyst has not received any compensation / managed or co-managed public offering of securities of the
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Analyst Certification: I/We, Runjhun Jain, Research Analyst and Dnyanada Vaidya, Research Associate authors of this report, hereby
certify that the views expressed in this research report accurately reflects my/our personal views about the subject securities,
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the preparation of this research report and has taken reasonable care to achieve and maintain independence and objectivity in
making any recommendations.
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Uflex Ltd.
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Initiating Coverage
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