Uflex Ltd
NSE:UFLEX
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
Abbvie Inc
NYSE:ABBV
|
Biotechnology
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Realty Income Corp
NYSE:O
|
Real Estate
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
403.3
843.6903
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
Abbvie Inc
NYSE:ABBV
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Realty Income Corp
NYSE:O
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
Uflex Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the UFlex Limited Q1 FY '23 Earnings Conference Call, hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Sanjesh Jain. Thank you, and over to you, sir.
Thank you, Seema. Good afternoon, everyone, and on behalf of ICICI Securities Limited, I would like to thank you all for taking the time to join us on UFlex Limited Q1 results conference call. From the company leadership team, we have with us Mr. Rajesh Bhatia, Group CFO, UFlex Limited; Mr. Anantshree Chaturvedi, Vice President and CEO, Flex Film International. Mr. Apoorvshree Chaturvedi, Director EU Operations and Sustainability; and Mr. Vinu Saini, Vice President, Corporate Finance, M&A and Investor Relations. We will have the opening remarks done by the management post which we will have a Q&A session.
I would like to hand over the proceeding to Mr. Rajesh Bhatia for his opening remarks. Thank you, and over to you, sir.
A very warm good afternoon to all on the call. Ladies and gentlemen, my name is Rajesh Bhatia and I'm going to be [indiscernible] you for the results for the Q1 ending 30th June 2022. So for the quarter, we've seen a reasonably good quarter. Our top line grew by -- on a year-on-year basis by 46.5%, a little over INR 4,000 crores, and which was backed by a 15.7% volume growth on a year-to-year basis. And we had -- EBITDA was up by about 44.3% to INR 725 crores only year-on-year basis. And on a Q-on-Q basis, it's up by 4.1%. And PAT is again up by close to about 42% to INR 375 crores. This is the highest ever PAT by UFlex in any quarter so far. And on a Q-on-Q basis, also this is topped by 6.9%.
The notable contributions -- achievements in the quarter was -- the first is aseptic packaging business where we achieved about 91% capacity utilization [ considering ] the expanded capacity of 7 billion packs. And we had almost 123% volume growth in the aseptic packaging business on a year-on-year basis. And even on a quarter-to-quarter basis, we have 61% volume growth for the -- in this quarter over the March quarter. So that business has done phenomenally well.
And enhanced capacity utilization, which was commissioned in April early -- came very handy for this season. And to the best of our ability, we could sort of -- we could achieve a very high level of capacity utilization. And we could have done a bit better, but initial heating troubles always -- when you set up new things are always there, but we've been able to overcome those subsequently. And endeavor is to bottom [indiscernible] the plant and the purpose is that can you with the same facility [indiscernible] instead of related capacity of 7 billion packs, can you do anywhere between 8 billion to 9 billion packs, and our endeavor is to do that. So let's see the next season as to how do we perform on that front.
The other notable achievement during this period is -- we've achieved 71% plus capacity utilization at our Nigeria facility. We've been -- while we commissioned that in Q2 of FY '22, so the first 2 quarters, we had some logistics and other issues there. But happy to say that now we are ramping up production and the sales from that particular business. And the idea is to again take it to the much higher capacity utilization [indiscernible] exceeding in some of the other businesses.
So overall, the quarter has been decent, and we are now looking at the commissioning of our CPP facility in Dubai and India, and our BOPET facility in India [indiscernible], which will give us additional revenues as well as profitability.
Generally, a good quarter from overall prospective. Thank you.
[Operator Instructions] We take the first question from the line of Mr. Subham Agarwal from Aequitas.
And first of all, congratulations to the entire team. Sir, my first question is related to the aseptic packaging division. Sir, I wanted to know with the commissioning of new line, what would be our current market capacity? And going forward, what is the reasonable growth trajectory that we are looking for this division, given that you have mentioned that we'll expand our capacity to probably 9 billion pack over the next 1 year?
So the current rated capacity is 7 billion packs a year. Now we are seeing expansion. We're not looking at any fresh investment per se, but we are looking to debottleneck that existing facilities to see if we can still optimize the production on the same plant between 8 billion to 9 billion packs a year.
Okay. So sir, what would be your current market share in this division with this commissioning?
I think we will have close to anywhere between 22% to 25% market share.
And what is the reasonable sustainable growth that we can achieve in this division, sir?
This business, as I understand, the growth is about 18% to 20% of the -- at an industry level. So there's no reason that why we should not be able to achieve that growth.
Got it. And sir, with the new capacity at 7 billion pack, what is the total turnover that we can do? And what is the sustainable margin that currently we are doing in this business?
So I think we can do a top line of anywhere between INR 1,200 crores to INR 1,400 crores at a 7 billion pack output, from the pack [ size ] and all that. So that's why I'm giving a range. And the margins would be about 20% and above.
20% EBITDA level.
EBITDA level.
Okay. Fair enough. Sir, my second question is related to our BOPET division. So last quarter, we have seen in India, especially the BOPET margins have started declining. So I wanted to know what is the global trend because we have capacities around the world. So Q-on-Q from Q2 onwards, how do you see the spread moving?
I will...
Mr. Bhatia, I can answer.
Go ahead. Yes.
Hello? Am I audible?
Yes. You are, sir.
Okay. So in terms of the pricing posture of the Indian market related to the BOPET product versus the global markets or global market prices are obviously in a very different direction compared to the Indian prices, especially on a gross margin posture. And so far, right now, the summer season has been of a normal nature of demand, but we are expecting a demand recovery in the European market and a demand recovery in the Middle Eastern and North African and African markets for the last quarter of the year or the balance remaining months. So I think from a gross margin side, what you've been tracking correlating in terms of the India gross margin that is not going to have extremely strong [indiscernible] on to the global markets.
Okay. So sir, but globally also, we are expecting a lot of lines to come up. So do you feel that the demand would be adequate to meet the additional supply?
If you look from the supply side, the net capacity additions for the both are [indiscernible] factory portfolio is coming in India and China. Rest of the world, the net capacity addition is very, very limited, and almost negligible if you look at the [indiscernible] markets. So I think companies in positions like ours, where we have a complete understanding and presence in the Indian market along with the global market leaders. I don't think that -- I think we'll be able to manage the trade wins that develop out of the net capacity addition. And globally, the picture that's come out of the pandemic of companies needing reliable suppliers closer and that [ story ] is continuing to carry rate in the market's mind. And customers [indiscernible] a good job with our assets, customers will be sensitive to the value addition of that approach.
We take the next question from the line of Chirag Singhal from First Water Capital.
Just to continue to the previous participant's question on the Asepto business. So if you look at the next 2 to 3 years -- or let's say, even further 4 to 5 years down the line, what kind of target we have in our mind from the current 7 billion packs? Just to get a broad picture on where we are headed in the Asepto business.
So I already answered that. If you say from a turnover point of view, I think the current capacity can lead us to INR 1,200 crores to INR 1,400 crores annualized revenue, and the EBITDA margin guidance also I gave. Is there anything else you want to ask or is the same thing?
No. No. So that I understood. I'm talking -- so we are anyways running at 91% capital utilization for the entire 7 billion packs. And I also understood that with debottlenecking, we'll have 1 billion to 2 billion packs by next year or so. But beyond that, by adding new lines, so do you have any sort of a target that we can work with that this is the target for the next 3 to 5 years in the Asepto business from, let's say, 8 billion to 9 billion packs that we can achieve from the existing setup?
I think will be in a position to give you a more clear picture on the capacity additions for the aseptic by the end of the next quarter. I think right now, considering what Mr. Bhatia has shared that with the debottlenecking you're getting about 20% more on the pro rata capacity that you have today. And I think even if you assume the growth levels of the market of at least 15% to 20%, we have enough room to balance our existing onshore India capacity with that growth trajectory and then make a better decision down the line.
Sure. Okay, sir. My next question is on the -- was there any one-off expenses in the P&L because of currency's appreciation in Russia for Q1?
Because of the currency appreciation in Russia, we had -- our loan book swelled by about INR 163 crores.
Okay. So there was no...
No, the profitability impact is also there in Russia this quarter because the currency fluctuated. It went from INR 75 to INR 125. INR 125, it came down to INR 55. So there were impacts on the P&L in the normal course of the business. And so in the way we conduct our business, way we collect our receivables, benchmark to certain exchange rates and our [indiscernible] benchmark to certain exchange rates. Yes, we had some underperformance there because of this fluctuation in that way.
Okay. So could you please quantify the impact on the P&L during the quarter? I think what was the one-off component during the quarter, in the P&L?
[ Be able to ] share that.
Okay. All right. Okay. Sir, just on the recycling part. So we have been talking about a lot of expansions that we have been doing in various different streams in the overall recycling. Just wanted to understand from a broad picture that what kind of total CapEx that you've already spent in the recycling, what is the current capacity, the payback period? And also, just wanted to understand when we look at, let's say, a business like aluminum, wherein the recycled aluminum is generally purchased at a discount to the LME Aluminum and hence giving a benefit to the aluminum producers. Is there some similar advantage that we also get when we use rPET instead of virgin PET? And the cost of production goes down and eventually a sustainable profit per kg can be achieved over a period of time?
Can I request Mr. Anantshree Chaturvedi to address that?
Sure. But Mr. Bhatia, I think you can give the CapEx numbers and the payback numbers. I'd be happy to address the pricing and the payback cycle.
I think, Anantshree, if you can just give the business respective, I'll add those inputs desired.
Sure, sure, absolutely. So from a perspective of an input/output ratio, it's when we add in any kind of recycle from resin, from our facilities, it's not exactly the same as what you are describing that the aluminum manufacturers do. Because for us, the cost of sourcing, cost of cleaning can vary from geography to geography. However, today, the advantage that we all have as an industry is that recycled rPET materials are sold at a premium as compared to virgin material.
So it's really today -- if we look at the market today, that premium that rPET is sold at that makes up for basically these additional ancillary transition costs to rPET. But once you hit a certain quantity, and that sort of quantity is really being defined by the industry because that industry standard has not really been defined as of now, then you will start seeing some of these benefits that you are seeing that the aluminum-makers sort of get at scale. But until that point, it's really the premium that you get in the rPET market, which also varies by geography by geography, but it is a consistent premium in any geography that you are selling in that then allows a better payback period for this material.
Right. Okay. So when you talk about premium, so could you also help me with the sales volume that we do for 90% or 100% rPET films as a percentage of the total sales volume. Just to understand that what kind of scale we have achieved and what prospects do we have over the next 5 to 6 years?
We could get you -- we can get you back to those numbers. I wouldn't have those numbers off the top of my head for every geography.
Sure, sir. No problem. One more question...
Just to give you a supplementary insight that you can carry back into your industry is that right now the adoption of the rPET film product is heterogenous globally. So certain markets are leading in terms of customer demand, whether it's shaped by the customers or directly by their end customer. And in other markets, either because of the lack of regulation or because of the lack of marketing on behalf of the end customers, the demand for 100% rPET [indiscernible] film has still not crystallized to a point where we should start, let's say, exposing more of our film capacities to that product. So I think it will happen over time. And that is one of the reasons why the sort of formalization of the aluminum model is not applying 1:1 on to the questions that you are asking.
Right. Okay. Understood, sir. And Mr. Bhatia, could you help me with the numbers on the CapEx and the payback period?
So a typical plant, depending on the location and the cost of civil works at that location will [indiscernible] between $10 million to $12 million, token investment in the [indiscernible]. And the payback should ideally be between, say, about 4 to 5 years.
Okay. All right. Sir, one last question, and then maybe I can run back in the queue. This is on the specialty sales volumes. If you look at the peer set, most of the companies are giving a breakup of how they are -- what is the total component of the specialty sales volume as a percentage of the total sales volume at the moment, and what are their ambitions over the next 2 to 3 years. Now the reason why we are giving and maybe putting it in front of the investor is what they're trying to imply is that is a sustainable EBITDA per kg, or let's say, sustainable profit margins in a specialty sales vis-a-vis the commodity sales volumes.
So just wanted to understand where do we stand currently in terms of our specialty sales volume as a percentage of the total sales volume? And is it fair to assume that there is a sustainable profit per kg? Because we are in a cyclical industry and the spreads clearly are totally volatile in terms of the demand and supply. So if we are able to ramp up our specialty sales volume portfolio, maybe we can have some sort of a sustainable profit per kg going forward. So this is the assumption that I'm working with, but just wanted to know your perspective, where do we stand in terms of the specialty sales volume at the moment and whether it is fair to assume that the profits are sustainable in specialty sales?
So can I ask you a question? When you talk about sustainability [ terms ], you know from your definition and your benchmark, how are you qualifying those films as sustainable as specialty films? Are those specialty films based on whatever the company you're talking to is telling you it specialty? Or is this -- is that you have a benchmark that defines those films?
No, sir. So I don't have a benchmark personally, but whatever I've heard, I can put it in front of you. So basically, what the companies are stating is that specialties are no longer considered to be just metallized and coated films. It depends on the application the films are used into, and which are much more specialized than a simple metallized or coated film. So what we have known from the presentation is the capacity that we have for the metallized and coating films. But obviously, with whatever we have heard from different companies is that -- specialty is much more than that. It's not just restricted with the metallized and coated films. So yes, personally, I don't have any benchmark, but this is what fair understanding I have.
I'm sorry to spin this on you, but that's exactly the problem, right? The problem is we -- our internal benchmarks of what we define specialty is very, very different from what the industry defines as specialty. And that's the reason why we don't sort of reveal these numbers because a lot of times, what's being called a specialty is not necessarily a specialty. So I'll tell you our internal benchmark for specialty is based purely on volume and margin. Those are the 2 things that we look at when we see internal specialty films. Mr. Bhatia can give you more details at a later time. But that's the reason why it's kind of futile to discuss specialty films because there's no benchmark, right? What you are calling and what the industry might be calling a specialty film might not be a specialty film as defined by the -- as by -- actually -- in actual reality, but it's being touted as a specialty film because it sounds nice on the presentation, or it sounds nice on a sort of news headline. And that's where sort of difference comes in.
So UFlex's definition of specialty is far -- is a far higher standard than, I would say, the general industry definition. And that's why -- and a lot of it is linked to our IP, and that's why we don't go into the same details because we are not looking -- we're looking for these products to find a home, not necessarily for these products to boost other things.
Sure, sir. So when you say that you have some internal threshold, could you put some numbers to it that a constant INR 15 to INR 20 higher than the commodity spreads to INR 30 to INR 40. I mean what is the internal threshold that you have to distinguish specialty sales from commodity sales?
We can elaborate on that later, but it's an internal threshold. I think I'll let Mr. Bhatia elaborate on that later. Yes.
To give you a rough guidance, as a benchmark, there should be at least a 15% expansion in gross margin on specialty sales on gross margin. So obviously, that keeps -- the different companies produce these products differently. You will respect the fact that many companies have different kinds of lines, different kinds of downstream equipment, all of which are important because to produce a specialty film, you still need access to the base commodity product because you still need the base chemistry and the base geology of a polymer product on which you can add value, and whether [ I'll sell ] it to the end customer.
So at a minimum, you can say there should be at least a 15% expansion in gross margin on account of specialty sales. That will be at least an interim threshold for us for it to be economically attractive to us.
We take the next question from the line of Mr. [indiscernible] from Odyssey Capital Management.
Congratulations on set of numbers. Most of my questions -- almost all of them have been answered. So I just want to ask, could you give [indiscernible] the raw material prices, are they going down?
Sorry, you are not audible. Can you please repeat your question?
Can you hear me now?
Yes. It's better now.
Yes. I'm saying, are the raw material prices going down?
Yes. In -- post to 15 July to 15 August, we saw some softening of the raw material price.
Okay. And my second question is there was some issue with the [ J&K ] government that you discussed in the last or last to last con call. So could you throw some light on that? Has that been solved -- some [ BMS ] problems?
So that matter now, we will have to litigate there to get our due rights [indiscernible] in our -- those benefits are not being accounted for now. It's been taken a long time now.
We'll take the next question from the line of Mr. [ Yash ] from [indiscernible] Equity.
Am I audible?
Yes.
My first question is regarding Nigeria. We said it crossed 70% capacity utilization. But has it become EBITDA positive in this quarter?
Sorry? Come again?
[ Has ] Nigeria plant turned EBITDA positive this quarter?
EBITDA -- Yes. EBITDA quarter -- this is EBITDA positive this quarter.
Okay. Dharwad capacity on your Dharwad expansion -- what kind of top line would that expansion add on full capacity utilization?
So Dharwad expansion could give you about -- if you produce 4,000 tons, it will give you about INR 50 crores per month.
INR 50 crores per month. Full capacity utilization?
PAT. PAT. No. Not full. Full would be about [ 400, 500 tons ].
[indiscernible] Could you assume the top line to [indiscernible] just in case.
Sorry. I said INR 50 crores per month.
That is PAT, right?
That is the top line.
Okay. Also, raw material pricing, could you elaborate more on that? Or how much the prices have come down by? Would you be able to quantify it?
I think it's too premature. I think this trend has only been for a few days. So let's not hazard a guess on that. When we'll have the next quarter, I think we will give you that as to what happened to the prices.
No. But basically [indiscernible] prices...
But as of now there has been -- the fall in the raw material price have been really marginal only. So I think anything to elaborate beyond that may not be possible for us today because the time period involved has been pretty -- very, very short.
Sir, but crude oil has fallen from $115 to, I think, $90 approximately. So the raw material pricing isn't cooling at the same speed that I think it went up, right? So is that change of very good demand base?
So we've already seen that the vis-a-vis last quarter versus this quarter, how the crude has also behaved. So if it's in line with when, there is nothing exceptional to those fall in all.
Also, your operating OPM expansion, is there any visibility in the coming quarters?
For Dharwad?
Your OPM. No, no, overall operating margin. Or are you comfortable with 18%?
I think 18%, as I've been saying earlier, a range of 17% to 19% is quite a comfort zone for us. But again, if the raw material prices fall and the margins are sustained. So your EBITDA margins will always look much higher in respect.
Also, would you be able to elaborate on the demand in Europe and U.S.?
Sorry?
Would you be able to elaborate about the demand right now in Europe and U.S.?
So the demand right now in Europe is struggling with the -- its own energy issues and all that. So the demand is a bit soft. But typically, that's been the phenomenon in this period generally over the years we've seen. So I think nothing much to get bothered about that on an annual basis we will be able to outperform the last year or so. I think [indiscernible].
Also on your -- again, on your operating [indiscernible] margin front, you said that you are comfortable and -- you are comfortable with 18%, right? But will you be able to give a guidance for the coming quarters, if any? Or you'll be able to maintain [indiscernible] margin?
We're not giving any guidance for the next quarter as of now. For the year as a whole, I think we have also said about 17% to 19% is our range.
Okay. Also, what about -- what's the update on the Dubai listing?
On the...
Dubai listing, the subsidiary that is getting listed in Dubai this year.
I think the markets right now are not conducive. And as and when they are back, we'll be back in business on that front.
Also, on the -- my last question is on the debt front, then by this quarter, are we expecting a debt to start coming out?
So the debt, as we said that the debt hasn't gone up in this quarter also. It's the same what was there in the last quarter despite the fact that we have now CPP and the BOPET facilities under commissioning for which the new debt is being drawn. So the current amortization structure versus the new debt added for those projects is almost keeping the debt at a static level. So I think the debt will peak by March 31, 2023. And thereafter, it will start coming down.
Could you talk about the new capacity that you've announced? You've announced for the [ pellet ], you've announced a new plant, right? Could you talk about that?
We've announced backward integration facility at Panipat, where are we going to make -- manufacture the resin for the PET films. So that is the project which we are undertaking. And that project will come up in FY 2026. So we will -- whatever is the debt added on for that, the current amortization over the next 2 years will neutralize that new debt, which is taken for that project.
Could you make me understand about how that project is going to help -- is it going to help UFlex expand the OPM?
So 2 things important in that is -- one is that will help us protect margins. And we've seen in the last couple of years that both the availability as well as the pricing on our even raw material side was getting a bit erratic just because we have an overall global presence. So we've been able to sort of meet our raw material requirements from wherever we can, for India as well as our overseas facilities. But yes, availability issues, supply chain issues are -- have been the order of the day, at least for the last year or so. And that's why we've taken the decision to backward -- for this backward integration.
So that even today for some of our facilities in global markets, we source from India, we source from Southeast Asia, and we source from Middle East. And that's where we've been supplying raw material to our offshore businesses. This will help us, both quality-wise -- the consistent quality, you're not -- moving from one quality, one supplier to another and that resultant fluctuation in quality, all those things are going to be [indiscernible]. Plus the margins, definitely, there is -- today, both in India as well as in the international market, the markups on the indices have shot up quite a bit in this space.
In the last con call, if you remember, I had asked you if you had a [ plan ] of listing aseptic packaging as a separate entity and you said it is a good idea and the management will think about it. Has there been any thinking on that front?
No. We've not given any thought process as of now.
Also, in the existing aseptic packaging plant, how much would we be able to expand more in our brownfield expansion?
So at this plant now -- at this plant now, we can duplicate the same capacity given the resources in terms of land and others, what we have presently at this month. But currently, the endeavor is not to set up anything new. We are only trying to be [ subtle ], and see whether at the same plant can we take the more output out.
Yes. So at the plant if you choose to double your capacity, you can, right?
We can.
We take the next question from the line of Mr. Shivam Saxena.
Congratulations for a good set of numbers. Only one question is that what would be the impact of plastic ban from this quarter onwards Q2? What it will [indiscernible]? In this quarter, how much will be the impact?
There is no impact on UFlex for any of the plastic ban because none of the items in the plastic ban affect UFlex. There -- as part of the aseptic packaging for certain segments, we've been using the plastic straws. So they'll be replaced with the paper straws as we've already ordered those machines.
So would it be -- we can say it would be a positive impact on the company if there is a plastic ban? Can we say that?
I think there's no impact. I think we remain on that as well. How the substitutes for the items which have been banned and how do they impact, what are the alternatives which emerged from there, and how does it help the flexible packaging films companies and all that. I think let's wait and watch and see the impact of that.
On the -- what about -- have you taken any price hikes recently after the June quarter, and price hikes were taken? I mean, will they continue in this quarter, also?
No. So the price hikes earlier have also been taken based on the raw material price increases. And even in this quarter, if you see the top line grew by close to about 47%, while the volume growth is close to about 16%. So there is a substantive -- on a year-on-year basis, there is a substantive increase in the price.
If you see the last quarter, we had a 65% top line growth backed by 38% volume growth. So this quarter, again, the impact of the price rise has been there. But as we said that last 1 month or so, 3 weeks to be precise. The raw materials as the crude has come down, the raw materials have come down. So to that extent, the raw materials come down, you've been -- you can -- depending on the demand/supply situation, you can either pass on the prices or you can keep some of the margins to yourself depending on that. I think that the call business takes on a regular basis.
But last couple of years, we've seen that whatever is the price increase, that has been constantly passed on to the customer. Only in the flexible packaging business, there may be certain lag in passing on that prices. But generally, in the larger business areas for us, we're passing on the prices.
So basically, if we are saying the commodity prices go down, then you reduce the pricing or you can reduce the [indiscernible] reduce the prices also. The top line can reduce by that amount, right? I understand that.
Yes.
[Operator Instructions] We take the next question from the line of Mr. Rushabh Shah from Anubhuti Advisors.
The first question, when we -- when do we expect the new facilities that are [indiscernible] commissioned?
Targeting Q3 later, or Q4 beginning. That's what [indiscernible]
Okay. And on the aseptic debottlenecking, will that also be concluded in this financial year itself?
No. I think this year, the season is now off. So January next only now the season will start. So hopefully, by that time, we should have sorted the things out.
Understood. I think I just wanted to confirm, have our debt levels on a net basis have remained flat because our finance cost has actually gone up 7% sequentially. So wanted to understand that part.
So the debt level on a constant currency basis has remained the same. We -- overall, if you see the net debt has gone up by INR 150 crores. And if everything else I were to keep aside, as I was to see only in Russia. So because of the currency appreciation, there in rupees terms, their [ head ] has gone up by INR 163 crores.
Okay. Okay. And I think while you were answering a previous participant, you said that we have taken a new debt for commissioning of these new plants. So has that debt being taken at a higher rate? Or is it still in line with the previous debt levels?
See, it's only when you will take the rupee loan, it will always be sort of costlier than the foreign currency loans in our global businesses. So what right now we are adding to a debt level -- because the offshore projects are already commissioned last year itself. And -- but yes, on a quarter-on-quarter basis, if you see -- because last year, we didn't have the Nigeria project, which was commissioned in Q2 -- towards Q2 end. So this year in Q1 versus last year of Q1, we have the debt of the Nigeria project which has come and hit the P&L. So that's where you see -- despite the debt almost remaining the same, you see a higher interest out.
We take the next follow-up question from the line of Mr. Subham Agarwal from Aequitas.
And sir, my question, given the promoters are there on this call, I would like to...
We lost the line for Mr. Subham. I'm promoting the next question from the line of Mr. [ Yash ].
My question is regarding the dividend payout ratio. Has there been any thoughts [indiscernible] to that? We [indiscernible] because in the last 5 to 10 years, your dividend output ratio has only declined every year.
You're not audible at all. You're not audible at all. Hello?
Yes. Am I audible now, sir?
A little better, it looks like, but only when you complete your question.
Hello? Now?
Much better.
Yes. My question is regarding the dividend payout ratio. The dividend payout ratio from the last 5, 10 years has only come down. Has there been any thought put to that? Are we looking to increase the dividend payout since you said by the end of this year, we will hit our peak debt level. So is there any plans to increase the dividend payout ratio by then?
See, I think the dividend absolute payouts are being increased. That's what I can say. But yes, in terms of the payout ratio. You're right that may have gone down. And the only reason for that is, as we spent a lot of capital in terms of our growth, and that's where you see -- basically, if you see in the last -- we had an EBITDA of close to about INR 700 crores in the last quarter. We had a INR 725 crores now. So today, we are looking at an annual EBITDA of anywhere between INR 2,800-odd crores, up from about INR 900 crores what we had about 4 years ago. So all this additional EBITDA generation has come against the backdrop of fresh investments being made into the businesses, whether it was aseptic or it was the new facilities or brownfield or greenfield being set up in the offshore locations, and now the backward integration into -- so there's been a lot of CapEx.
And as part of the CapEx, when you [ go ] to your lenders for the fresh borrowings, I think there are kind of -- sort of guidance from them also as to how much you need to plow back through equity into your businesses. So all that has been done, keeping in mind that there are enough resources -- equity resources from the business to fund those projects. And that's been the primarily deciding factor.
Yes, sir. My question was based more about [indiscernible] I completely understand why you spent money and why you haven't paid out a lot of dividends in the last 10 years. But as an investor, when I look at others' stocks in the same industry doing business, after -- if you're expecting the peak level of debt to come down in this -- by the end of this financial year, then wouldn't you look at rewarding the shareholders, too?
No. I think the intention is to create the shareholders' value, and that has been done over the years. It may not necessarily have been through dividends, but it's also reflected in the stock prices, which are, again, backed by the performance of the company. So overall basis, the value creation in the last 3 years has been good. Yes, I agree with you that your expectations on dividend payouts may have been -- not met to the extent some of the other players are doing. But yes, our endeavor is to keep the growth momentum on. And because I understand that some of the competitors you are talking about, they are -- while we have 3 or 4 separate businesses or maybe more as some of the intermediaries like chemicals, cylinders, engineering. They themselves are separate businesses. And then on top of that, the 3 main stream businesses, the aseptic packaging, the flexible films and the flexible packaging. So they have their capital requirements from time to time. Very difficult for me to say that how will the future pan out in terms of the further growth plans today, whatever we have, we keep on announcing to the market.
But yes, on the whole, we are -- we are a progressive company and wherever we see that we can generate much better returns rather than sort of [ dividending ] giving it in the form of dividend. If there are opportunities -- reasonable opportunities for growth, I think we've been pursuing that. And once we stop pursuing that, then yes, of course, you don't keep the ideal cash with yourself. So there'll be distributions for sure.
Yes, sir, I completely get that. And the only reason I asked this question was because -- definitely in the near future, we are looking at a point where the debt levels hit their peak. And once the peak is over, I was just wondering what the company plans on doing with the cash that's coming in. If you have further growth plans, that's well and good. But if you don't have further growth plans, you will also be looking at reducing your debt and deleveraging your balance sheet, right?
I think the balance sheet is not leveraged. If I see my net debt to EBITDA basis, if I annualize my net debt -- net debt and the earning numbers, we are talking about less than 1.5x of net debt to EBITDA. So I think we are in a comfortable zone over there. But taking your point that I think we -- once we come back to that situation where there are no further opportunities to grow. I think the management will consider probably a higher dividend payout ratio at that point in time. But very difficult to commit anything on this call at this point in time.
Okay. Okay, sir. And also I just have one more thing on the investor front. Could you -- would you -- what are the steps the management is taking to make UFlex a more investor-attractive opportunity. I'm not talking in terms of the growth. In terms of growth, I think you guys are firing on all cylinders. But you recently hired a new PR agency too, right? If I'm not mistaken. So in that front, can I understand what steps the PR agency is taking or what step the company is taking in that front to expand investor [indiscernible].
I think that's an agenda which is currently under discussion with that. And as part of that agenda, only -- this is the first time you see the promoter core group on the call this time. I think we will -- we are in constant discussion with our consultant. And the next couple of quarters, we'll give you more guidance, or you will see for yourself as to what we've done to improve our investors relationships.
Yes, sir. And also from next quarter onwards, it would be very helpful if you could give some sort of guidance in some -- in terms of at least the coming quarter, that would be really helpful as an investor for me to understand why the business is heading.
We take the next follow-up question from the line of Mr. Subham Agarwal from Aequitas.
Am I audible?
Yes, you are audible.
Okay. Okay. So given that the promoters are there on the call, I would like to take this opportunity to understand from them what is the vision that they have in place for the company over the next 3 to 5 years? What are the areas that they are focusing on? Any new specific areas that they would like to talk about? And given that Mr. Bhatia said, there are multiple growth levers that we would be investing in. So broadly, just if you could help us understand what you are thinking that would be very helpful, sir.
[indiscernible], do you want to start with this?
Yes, sure. So obviously, we're going to grow more in retail business. The film business will continue to grow. And along with that, as Mr. Bhatia has explained earlier on the call, there'll be certain capital exposed also to improving the availability and security of raw material because obviously, it will be geographically diverse. So we will continue to commit our strategy of geographical diversification on the expansion of the next new capacity. Certain market capital will also go for the polyester raw material. And along with that, the aseptic business is something that, as we have earlier said in the call that after debottlenecking, we can take a longer-term perspective on the aseptic business to also make it grow. Along with that, obviously, as film capacity goes up, there will be room to further penetrate the available value additions available in the film sector. So that's also reviewed under the management.
Along with that, obviously, because it's a diverse -- we have -- we are seeing what's happening in energy, and we're seeing what's happening in this -- what's marketed as a transition to a different energy base. And if there's any room to grow in those sectors, we can look at that as well. But as of now, [indiscernible] will be more growth in the film business, and a certain amount of capital exposed to the defensibility of the raw material chains. And along with growth in the aseptic business as well.
Got it. Got it. Sir, and secondly, see, we understand over the last few years, we have gone through a significant CapEx hike, and we have delivered when it comes to number. But on the same time, it's not reflective on the share price. Sir, so I think it's a very good opportunity for the promoter itself to buy shares from market. Obviously, you bought some share last quarter, but what are your thoughts on that?
That is a very small percentage that was bought by the promoters, that was only 0.4%. There are, see since the capital requirements are today elsewhere. So there is not -- there's no such plan to sort of look at any large-scale sort of buyback kind of structure. I think but to still give more value to the shareholders, the wealth creation for our shareholders, we thought of other routes as to how we can do it. And listing the Dubai entity was 1 such route, which we are pursuing just because the market still come back once the interest rate cycle is sort of stabilized, the equity markets. So that would be 1 huge [ flip ] to the [indiscernible] the company is valued because whatever discussions we have in -- the road map that our investment bankers are showing us for that listing, I think this will put the company, UFlex, parent valuation also is a completely different sector.
Sir, how much are we looking to dilute in the Dubai business?
I wouldn't divulge any details of that at...
Ladies and gentlemen, that was the last question for the day.
Thank you, everybody. On behalf of ICICI Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.