UFlex jumps 9%, scales fresh 52-week high as Q1 profit grows two-fold

Due to the Covid-19 pandemic, flexible packaging has gained much more importance, the company said

Shares of UFlex surged 9.12 per cent to a fresh 52-week high of Rs 368.35 on the BSE on Wednesday after the packaging materials and solution company reported over two-fold jump in its consolidated net profit at Rs 196.54 crore for the first quarter of 2020-21 (Q1FY21).

The company had posted a net profit of Rs 90.91 crore during April-June quarter a year ago, UFlex said in a regulatory filing.

Its total income rose marginally by 0.78 per cent to Rs 1,997.54 crore during the quarter under review as against Rs 1,981.97 crore in the corresponding period of previous fiscal. UFlex's total expenses declined 6.94 per cent to Rs 1,734.87 crore in Q1FY21 as against Rs 1,864.29 crore a year ago.

"Due to the pandemic, consumption trends have witnessed a shift and flexible packaging has gained much more importance especially because of the hazards attached to non-packaged products. This resulted in higher production and sales volume," UFlex said in a statement.

Total production volume during the quarter under review grew 13.44 per cent year-on-year (YoY) to 1,07,599 metric tonnes (MT), while total sales volume increased 8.97 per cent YoY to 1,03,575 MT.

Revenue from flexible packaging activities rose 0.62 per cent to Rs 1,933.98 crore as against Rs 1,921.94 crore in April-June quarter a year ago. Revenue from engineering activities grew 22.84 per cent to Rs 80.38 crore from Rs65.43 crore a year ago.

Commenting on the results, UFlex Group President (Finance & Accounts) and CFO, Rajesh Bhatia, said, "Q1 FY2020-21 has been a quarter of great progress for UFlex. The demand for pouching saw a huge increase led by personal hygiene category. There has been a steady improvement in BOPP-BOPET price spread in the last one year and we expect that the margins will remain healthy in the medium term."

The company operates in multiple countries across the globe - both in terms of its manufacturing operations and the markets for its products, and all these countries had imposed lockdowns of varying types aimed at containing the spread of the virus, Uflex said.

The company faced initial administrative and supply chain challenges in some countries during initial lockdown period, but there was no impact on its overall production and sales volumes during the quarter, it said.

At 9:30 AM, the stock was trading 6.03 per cent higher at Rs 357.90 as compared to 0.5 per cent gain in the S&P BSE Sensex. Around 10.4 lakh combined shares have changed hands on the NSE and BSE, so far. The stock also scaled a fresh 52-week high after surpassing the previous 52-week high of Rs 344.90, hit on August 11, 2020.