UFlex reports steady momentum in Q3 FY26

UFlex has reported unaudited consolidated net revenue of 36,329 million INR (approx 400 million USD) for the third quarter of fiscal 2026. Normalized EBITDA for the quarter stood at 4,395 million INR, with a normalized EBITDA margin of 12.1 percent, compared to 3,895 million INR and a margin of 10.1 percent in Q2 FY26. This reflects a sequential normalized EBITDA growth of 12.8 percent and a margin expansion of 200 basis points despite lower price realizations, including pass-through of softer raw material prices, product portfolio optimization initiatives, import-driven price pressure, global tariff uncertainty and the GST transition. Net profit for the quarter was 486 million INR.

The Board of Directors, in its meeting held on February 12, 2026, has approved and taken on record the unaudited
consolidated financial results of UFlex and its subsidiaries for the quarter ended December 31, 2025.

On a nine-month basis, UFlex reported revenue growth of 0.8 percent YoY to 114,157 million INR, compared to 113,226
million INR in 9M FY25. Sales volume increased by 0.1 percent to 482,910 MT in 9M FY26, as against 482,352 MT in the corresponding period last year. The company reported a net profit of 1,211 million INR, compared to a net loss of 262 million INR in 9M FY25. This performance underscores the company’s resilience and operational strength despite a
challenging business environment marked by macroeconomic pressures, the GST transition and tariff-related headwinds, which led to supply chain disruptions.

India remained the largest contributor, accounting for 46.1 percent of total revenue, followed by the US at 18.9 percent, Europe at 17.4 percent and the Middle East and Africa at 15.1 percent. The remaining 2.0 percent was contributed by other regions, underscoring the Company’s well-diversified global revenue mix.

With growing traction in volume and price recovery, our outlook for packaging films and the packaging business remains constructive. Improving demand environment, multiple global trade deals and GST-led tailwinds are expected to support a gradual recovery in packaging film price realisations and volumes, while the packaging business continues to deliver stable growth. The near-term commissioning of new capacities in aseptic packaging (Egypt), WPP (Mexico) and an rPET chips plant (Noida, Sector 155) is in line with our expectations and will result in incremental revenues, realisations, and EBITDA.

Packaging business

In Q3 FY26, the packaging business segment, comprising flexible packaging, aseptic liquid packaging and holography, reported sales volume growth of 7.6 percent YoY and 1.0 percent QoQ to 36,280 MT, compared to 33,706 MT in Q3 FY25.

On a 9M FY26 basis, sales volumes increased by 6.4 percent to 112,913 MT from 106,106 MT in 9M FY25, reflecting demand momentum across key packaging categories.

FMCG brand owners have partially deferred new price rollouts while liquidating inventory produced at the earlier price
points through price strikethroughs and re-stickering.

Consequently, the purchases of certain FMCG SKUs and related packaging raw materials are expected to remain temporarily subdued until inventories are fully absorbed by the
market. With renewed strategic focus on high-value business lines that offer larger opportunities, UFlex’s flexible
packaging business has been optimizing its customer portfolio. Looking ahead, our packaging business growth is to
be supported by GST-led volume tailwinds and a selective focus on packaging product mix.

In Q3 FY26, the aseptic liquid packaging business recorded a 2.3 percent YoY increase in sales volumes to 1.8 billion packs, compared to 1.76 billion packs in Q3 FY25. On a 9M FY26 basis, sales volumes grew 4.4 percent to 5.9 billion packs from 5.7 billion packs in 9M FY25, reflecting efficient execution and an improved product mix despite the impact of an extended monsoon and cooler weather.

India packaging films - performance stable despite modest Q3 amid challenges

UFlex India’s packaging films capacity utilization was 62.5 percent in Q3 FY26 (vs. 76.4 percent in Q3 FY25), primarily due to softer domestic demand amid elevated low-priced imports.

Consequently, production volume was 25,654 MT (vs. 31,370
MT in Q3 FY25). For the nine months of FY26, capacity utilization stood at 74.3 percent, largely in line with 74.4 percent in the corresponding period last year, resulting in flat production volumes. In Q3 FY26, the packaging films sales volume was 25,305 MT (vs. 27,852 MT in Q3 FY25). However, on a nine-month basis, sales volume increased by 12.9percent to 90,892 MT (vs. 80,534 MT in 9M FY25), supported by robust performance in the first six months.

Q3 performance was impacted by import-led price pressure, the redirection of export volumes into the domestic market and temporarily subdued demand during the GST transition phase. This led to surplus domestic availability and pressure on realizations. UFlex calibrated production and sales volumes while maintaining competitive pricing to deter oversupply. As imports moderated toward the end of the quarter, market balance improved, and this is now reflected in a gradual price recovery. UFlex remains optimistic about improved utilization and sales momentum in Q4 FY26.

The Panipat virgin PET chips plant operated at 67.4 percent capacity utilization in Q3 FY26 (vs. 77.2 percent in Q3 FY25), with third-party sales volume of 16,589 MT, down from 22,010 MT year-on-year.

Americas region (US and Mexico): Q3 witnessed demand softness; multiple trade deals to recover volume growth

In Q3 FY26, sales volumes in the Americas region were 25,915 MT (vs 26,820 MT in Q3 FY25), reflecting softness in demand due to the unprecedented US government shutdown and subdued consumer sentiment in the CPG segment. On a nine-month basis, sales volumes decreased by 7.0 percent YoY to 78,810 MT from 84,771 MT in 9M FY25.

The spillover effects from tariff-related uncertainties, food inflation and subdued consumer sentiment led to lower discretionary spending, a preferential shift to smaller pack sizes and value buying. Reflecting these trends, US retail CPG volumes declined YoY, the US F&B volumes trimmed by 0.1 percent and non-food volumes lowered by 2.1 percent (source: Circana report, Jan 2026). Thus, the capacity utilization in the Americas moderated at 82.2 percent in Q3 FY26, compared with 103.7 percent in Q3 FY25. We expect the gradual ramp-up of the newly commissioned CPP line in Mexico to drive growth in the region. 

Europe (Hungary, Poland and CIS): Holiday season weighs high on consumer demand, better product mix and retail trends

In Q3 FY26, UFlex’s European region packaging film production volume was 4.9 percent YoY to 31,455 MT (vs 33,077 MT), with capacity utilization at 76.3 percent (vs 80.2 percent YoY). Sales volumes were down 6.2 percent YoY, reflecting weaker performance in Hungary and Poland amid seasonal holiday challenges.

For the nine-month period, production volumes were 98,406 MT (vs 100,878 MT), with demand softness across the region resulting in a 5.8 percent decline in sales volume. The increased inflow of cheaper imports in Europe, along with limited pricing flexibility in packaging films, exerted pressure on realizations and margins in Q3.

With the CPI in the Euro area falling by 20 bps to 2.1 percent, retail trade volumes showed promising signs of an upsurge toward the end of the quarter. UFlex expects better traction in Q4 due to lower inventory levels of the channel partners’ post-holiday season, which will drive growth in Europe. Besides, there has been a moderation in imports of cheaper films after stability in global trade, followed by individual US trade deals with multiple countries, including major film producers.

MEA (Dubai, Egypt, Nigeria): Volumes moderated on trade disruptions; nascent momentum in exports promises better outlook

In Q3 FY26, UFlex’s packaging film plants in the MEA region operated at 78.1 percent capacity utilization, compared to 83.2 percent in Q3 FY25. Production volume stood at 38,833 MT, versus 41,401 MT YoY, primarily reflecting muted demand in Dubai and Egypt, along with lower export volumes from the Nigeria plant following the imposition of tariffs and related uncertainty.

For the nine-month period, capacity utilization was 74.4 percent, compared to 85.3 percent in 9M FY25, with production volumes of 111,006 MT versus 127,305 MT YoY, reflecting lingering macro and trade-related headwinds across the region.

There is a promising recovery in 2026 in the region, which is expected to sustain as demand gradually grows in key markets and the business environment improves, with fewer geopolitical conflicts.