Uflex declines after Q2 FY22 PAT falls 23% to Rs 171 cr

Uflex shed 2.83% to Rs 523.35 after the company's consolidated net profit dropped 23% to Rs 171.05 crore on a 38.3% jump in net sales to Rs 2,983.90 crore in Q2 FY22 over Q2 FY21.

Consolidated EBITDA skid 10.2% to Rs 424.50 crore in Q2 September 2021 from Q2 September 2020. Owing to the global expansions made and contributions being made by the new lines that were commissioned in the past quarters, packaging films production witnessed a jump of 33.5% Y-o-Y to reach 1,24,670 million tonnes (MT) in Q2 FY22 while packaging films sales witnessed an increase of 41.6% Y-o-Y to reach 1,22,321 MT. The overall sales volume for the quarter was up by 31.5% Y-o-Y.

Speaking on Q2 financial performance, Rajesh Bhatia, the group chief financial officer (CFO) of Uflex, stated, "The company has been sailing on the rising tides of pandemic and competitive business environment and has consistently posted a series of exemplary performance over the past few quarters. The quarter too reflected strokes of highs in volumes with contribution in production coming from the newly commissioned capacities. The demand for packaging films continue to be strong and is reflected in 41.6% sales volume surge in Q2 FY22 over Q2 FY21. All the newly commissioned plants in Hungary, Egypt, Russia & Poland are operating at near full capacity while Nigeria plant is ramping up fast and will achieve full capacity utilization in next 1-2 quarters."

"However, the quarter witnessed heightened cost pressures with frequent increases in raw material prices, higher shipping & energy costs, and consequently a strong order book position only meant servicing these customers at increased input prices, thus affecting the margins. However, given the strong demand momentum, once the raw material prices stabilize, the margins are expected to become better. I am pleased to share that India Ratings has upgraded credit rating of Uflex by two notches to 'IND AA-' with a stable outlook reflecting the improvement in overall business profile of the company. This re-rating will further position Uflex amidst the competitive forces in the quarters ahead."

Uflex is one of the largest multinational flexible packaging materials and solution company in India.

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