Uflex Ltd, India's largest multinational flexible packaging company, reported a 1.07 percent rise in full-year consolidated profit after tax while revenue gained about 19 percent in the period. Rajesh Bhatia, group president and CFO of the company, spoke about the financial results.

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“In Q3 versus Q4 that is March 2019, we have seen an increase of about 19 percent in the biaxially oriented polypropylene (BOPP) category for around Rs 38. In Q4 it was about Rs 45 and currently, it is around the same level or a bit higher. The biaxially oriented polyethylene terepthalate (BOPET) industry has also seen a similar kind of a price increase, margin increase over the last Q4 versus Q3 and there also the industry has got about 19 percent higher margins compared to Q3 and currently also the BOPET market continues to be robust,” Bhatia said on Friday.

“Q1 and Q2 are good seasons for packaging films because of the increased demand for films. So I think the prices continue to look good. BOPET price is going to be capacity coming on stream from Jindal in next one month or so but the market themselves are going up by about 10 percent every year so I think that absorption is not much of an issue. Going forward, towards the end of the fiscal we will also see some capacity coming up from another player,” he added.

When asked whether margins around 13-13.5 percent are possible for FY20, Bhatia said, “I think yes, because in FY19-FY20 we are not only banking on higher capacity utilisation for our films business, FY19 we did the highest ever production in our packaging films business - it was up by about 7 percent over FY18 numbers. If we can achieve the same increase over FY20, we will be close to about 100 percent capacity utilisation across all our facilities. That augurs well and we are clearly seeing that will happen. India, per se, we don’t have much of leverage because we have not added capacity. So there our facilities are already fully utilised.”

“In the packaging film business, we are close to 100 percent capacity utilisation while in flexible packaging our capacity utilisation is still less. We have a capacity of about 135,000 tonne. We are currently producing about 80,000 tonne a year. This should give us higher growth this year,” said Bhatia.