Uflex Ltd
NSE:UFLEX
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
American Express Co
NYSE:AXP
|
Financial Services
|
| 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 |
|
Target Corp
NYSE:TGT
|
Retail
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
| 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 |
|
|
Estee Lauder Companies Inc
NYSE:EL
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Church & Dwight Co Inc
NYSE:CHD
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
American Express Co
NYSE:AXP
|
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 |
|
|
Target Corp
NYSE:TGT
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
Mueller Industries Inc
NYSE:MLI
|
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 '21 Earnings Conference Call hosted by Dolat Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sachin Bobade from Dolat Capital. Thank you, and over to you, sir.
Thank you, Lisan. On behalf of Dolat Capital, I welcome you all to the Q1 FY '21 Earnings Conference Call of UFlex Limited. Hope you all and your family members are staying safe and healthy.
From the management side, we have with us Mr. Rajesh Bhatia, Group President, Financial Accounts and Chief Financial Officer; Mr. Anantshree Chaturvedi, Vice Chairman, FlexFilms International;
Mr. Apoorvashree Chaturvedi, Director, EU Operations and Sustainability, UFlex Group; and Mr. Surajit Pal, Vice President, Investor Relations.
Now I hand the floor to the management for their opening remarks, and then we would have questions on solution. Over to you, sir.
Thank you. Thanks, everybody, and we welcome you all to Q1 FY '24 Earnings Call of UFlex. I'll start with the positives and the positives for the quarter or that this quarter, we witnessed highest ever packaging films volumes from our India operations. We witnessed highest ever aseptic revenue in a quarter. We witnessed the highest ever export revenues in a quarter of about INR 400 crores and we -- even from the aseptic packaging business, the export revenues are now touching close to about INR 200 crores per quarter.
And the best is that while the packaging films business has been a bit sluggish a couple of months after the onset of the Russia, Ukraine conflict, but in terms of this quarter, what we can say is that we've not seen any deterioration in volumes in terms of the packaging films, especially the PET and overall basis, we've maintained a positive sales volume of -- on a quarter-to-quarter basis by about 0.5% or so. The other value-added sales also like holographic films also, we've seen 28% Y-o-Y increase in volumes and the Dharwad project, which we commissioned on 31st of March has helped us to achieve about a 77% capacity utilization from that plant and which has given us about 22% volume increase in the packaging films business in India.
Overall, for the quarter, when we see the EBITDA margins though on a stand-alone basis are at about 12.3%. This quarter, there has been some normal foreign exchange fluctuation losses also to the extent of about INR 18 crores. So if we negate that impact, and the stand-alone EBITDA margin stands at about 13.5%. The consolidated EBITDA margin stands at 9.3%, which when we compare with the peers, we appear -- that seems much better than the most of them and I have seen the numbers from about 4.5% to 9% range.
So overall, which shows that the packaging films business will continue to be sluggish given that what's happened in Europe, what's happening in America in terms of the sustaining fees in the interest rates, inflation, which has impacted the consumption, but still, if you see our pack for the America business, we've still achieved a volume of -- the capacity utilization of our America plant is 100%. The capacity utilization of our Mexico plant is about 87%.
We've seen a dip in the capacity utilization in -- so what we are -- we are still keeping those plants at full capacity, but we're getting impacted at a margin level. While in the European plants, the capacity utilization levels have been impacted because of consumption being impacted due to higher energy prices and the higher mortgage payments, which the consumer has to -- the customers have to do driven by the increased interest rates across all the mortgages. And again, this quarter, we've been also impacted very hugely by -- in the third week of June, we had the Central Bank of Nigeria, when the new government took over in Nigeria in the month of March and thereafter, we've seen this one major policy change where the Central Bank of Nigeria, which was sort of keeping tag on the dollar Naira parity has now sort of linked it to the market demand and supply situation, which led to about 62% devaluation of the Naira currency vis-a-vis U.S. dollar. And we've seen the huge impact of that in this quarter. It's about INR 382 crores in this quarter. When the currency has moved from about NGN 460 to $1 to about NGN 750 to $1. And that explains us this exceptional item because our borrowings there are in dollars, and that has impacted the profitability at the bottom line, and we have reported a net loss of about INR 416 crores in this quarter.
The aseptic business, though it has done better, it has done well, but we still miss the momentum because of an early onset of the monsoon in the country this year, which means that the beverage consumption gets affected when you have -- when the summer is shortened, and otherwise, we could have done still better in that business. We had told that we are expanding the capacity by debottlenecking the plant to about -- from an existing 7 billion packs to about 12 billion packs, which will be operational in the next fiscal. And we have now quite a good hold on the domestic as well as the international markets in that and our team strongly believes that as and when this capacity is available as it was the last time when the capacity got increased from 3.5 billion packs to 7 billion packs. They are performing. They are producing much more than that. This quarter also, the capacity utilization of the plant was about close to about 120%. And keeping that momentum, I think the team is quite confident that as and when the revised enhanced capacity is available, they go into sort of market all of that in a very short span of time.
So there are positives. There are positives on the aseptic packaging. There are positives on flexible packaging, including the holographic films business, which, as I said, that has seen about a 28% Y-o-Y increase in the volumes and revenues. And once this business -- packaging films business stabilizes, I think we will see much better level of profitability with the much higher operational level from our aseptic plant as well as our flexible packaging business.
On the CapEx part, the 2 projects, backward integration, where we will be going to manufacture our own raw material for our PET films. One based in Panipat, which is likely to be operational by the end of this fiscal. And another one in Egypt, which will also become operational in about 6 to 8 months' time after we operationalize the Panipat plant, which would sort of given the level of the capacities that we have globally and being #2 in the industry, I think that will give us enough sort of pushing against any shortages, against any unforeseen price increases, I can now share with you that during the COVID period, during the tough times, while availability was an issue. In European business, we have almost paid 3.5x of our normal prices, some add-on prices for the PET chips during this COVID period as compared to what we were paying earlier.
So we did -- it did impact our margins during that COVID period. And given that we now run huge capacity and the entire competition has already -- had already set up these plants, PET chips manufacturing, along with their PET lines. We were the only exception, and we were continuing to buy from the market. But yes, we suffered quite extensively during the COVID period both from an availability as well as from a pricing perspective. And now that they'll be getting commission in the current fiscal, I think that and business risk also is now taken care of.
On the BOPET side, the entire industry depends on the outsourced raw material and so will be continue to do that. And -- but from a PET perspective, I think we'll be even far better than the competition because what we have is one single large facility where we also have the flexibility of making the bottle grade chips, which again continue to have great momentum -- or we can make the PET chips for the packaging film.
So we have that flexibility cap. While as I was saying that this is the minimum economic size of the facility that we are setting up in Panipat as well as in Egypt, is going to be much more efficient and cost effective as compared to the competition because we're going to produce in one -- at one single source large capacity -- and while the practice has been that for each BOPET line, you set up an equivalent PET chip manufacturing capability as and when you set up a line.
So that in a nutshell sort of explained. The debt levels for the current quarter are almost the same as what we had in the previous quarter. So there's been no further debt addition. And the net debt at about INR 4,400 crores is almost the same what we had reported in the last quarter, which means that there have been repayments and there have been fresh debts taken to funds Panipat and Egyptian backward integration projects.
I think that is what I had to say about our performance during this quarter. And over to you for any questions that you may have, and we'll be happy -- we'll be glad to answer them.
[Operator Instructions] The first question is from the line of Chirag Singhal from First Water Capital.
Just a couple of questions from mine. Firstly, I wanted to understand on the FX losses that you booked during the quarter. So apart from the exceptional item that we have shown, are there any other FX losses?
Actually, your voice is cracking. Can you just repeat your question please?
Am I audible now?
There's some disturbance.
Even now.
Yes, better.
I'm saying that apart from the ForEx losses that we have shown in the exceptional items, are there any other ForEx losses that we booked during the quarter?
Yes. I said that during the quarter, there are normal currency fluctuations of about INR 18 crores, which are taken at an EBITDA level itself.
Okay. So INR 382 crores, the exceptional item that you have shown and another INR 18 crores, which might be part of the other expenses. Nothing apart from these 2 items?
So these are the 2 ones on the ForEx side.
Okay. So except Nigeria and Egypt, are there any other regions where there is a weaker currency and we can see some sort of ForEx losses going forward?
I think Egyptian currency continues to weaken every quarter. So the Mexican currency has appreciated in this quarter and the -- we -- all others are sort of minor negative or positive. So that's not so other than Nigeria, the second biggest negative is Egypt still in this quarter as well. But now because it is the market driven, it is not personal to any policy changes by the government, which has impacted the parity of the exchange rates. So those are being reported as a normal expense item and not as an exceptional item.
So on a net basis, would it be possible to share that what is the net hedge that we have in Egypt as well as Nigeria because I think we have taken some local currency loan and then we would be having a mix of local procurement as well as imports. And same on the sales side, we'll have the local sales as well as exports? So on a net basis, is it possible to quantify the net hedge position in both the regions?
No. See, the Egyptian, so it does not work that way when you are talking of ForEx impact because of the devaluation. So on the balance sheet date, if you have dollar loans, so they will all get converted into a much higher Egyptian pound if the local currency has devalued or if you have the receivables, so they will also get impacted by the currency devaluation. And then during the period, the operating expenses, you convert from Egyptian currency or the other functional currency of that country into Indian rupees at an average rate for the quarter because those are the transactions of the sales and purchase, which you do constantly throughout the quarter. So they are not impacted by the exchange rate as on the 30th of June or 31st of March at the end of the quarter of the year, they get constantly valued based on the exchange rate -- average exchange rate during the quarterly or the yearly period.
So it's very difficult to tell you as to on each which day what is the total impact. But -- the overall picture is that during the quarter, you still have suffered a negative impact in Egypt and which is offset by a positive impact that you had in some of the other currencies, including Mexico.
So on an overall basis, the normal currency fluctuations have resulted in about an INR 18 crore loss in this quarter as well. while the Naira loss, Nigerian currency loss is an exceptional item because that's pursuant to a policy of the government of Nigeria.
Understood. Got it. So my next question is on the Asepto business. So firstly, what is the volume target for this year with the 7 billion packs capacity? Are you expecting like 100% utilization based on the order book visibility and for the current fiscal?
For the first quarter, we've seen about 120%. Let's see the Jan, Feb, March, again, will be high quarters because that's where the season sets in. But in between from August to December, it's normally a lean period for the business in India. But as we said that as we speak, we have been able to achieve about in a lean month, about 50% to 60% being contributed by the exports. So I think as we go forward, the exports will hold the key to how this business volumes are compensated because India, we will definitely see a decline from August till December. And those volumes will have to be substituted from the exports, which is looking achievable at this moment.
So on overall basis against the capacity of 7 million packs that we are able to do about 8 billion packs a year. Earlier, if the season would have gone better in the -- from especially from April to July, I think we would have had another -- we would have seen about 8.5 billion to quarter to 9 billion packs this year itself.
And post debottlenecking, you would be able to do 12 billion packs, right? You'd be able to do 100% at the peak capacity utilization once you do with the debottlenecking?
Yes.
So any specific reason why this is taking long, the time line that you mentioned is by April 2024, so are we waiting for some balancing equipment or exactly what is the reason behind this long period for debottlenecking?
So that's a delivery time taken by the equipment supplier for the delivery.
Okay. So what will be the CapEx for this debottlenecking?
I think this CapEx is in 2 parts. One is this machine and the equipment itself. That's number one, which should be about INR 50 crore to INR 60 crore and then because the capacity is now from 7 to 12, we have to build some more storage for the raw material as well as for the finished products. So that will be another INR 40 crores to INR 50 crores.
So total INR 100 crores of CapEx, which will be spending this year for the debottlenecking?
Yes.
Right. And how much time are you expecting to ramp this to 12 billion packs?
I think we are targeting next fiscal, if we are able to do it from January, that will be a huge bonus because that's where the season commences in India. I think -- but keeping a conservative number, I think we should look at something in April as well.
So you're saying in FY '25, we should be close to 100% of the capacity utilization -- year end...
Our target is and -- but let's see because, as I said, that when we expanded from 7 from 3.5, so currently, we are operating at 8 and from 8 to 12, that's what our team is showing huge confidence in terms of achieving that number. We were fortunate that there was no lag when we expanded the capacity last time. So April '23, when we got this 3.5 to 7 billion packs, we were -- April '22, sorry. We were already have the enough order book to ensure that we achieved a very high capacity utilization in this plant. And hopefully, we will surprise the market by saying so again.
Okay. Okay. Got it. So now Asepto is going to be a material contribution to our stand-alone business. So I mean, from an investor perspective, it would be great if you can have Asepto as a separate segment. So are you thinking something on those lines going forward from the reporting point of view?
Because it's all packaging. And -- so are you saying that demerge or you saying report separate numbers for Asepto?.
Reporting separate numbers for Asepto.
I think we give that indication each time on the call and otherwise that Asepto business, we are looking at margin in high teens. So that's the -- we tell you that, but beyond at this moment, we are not looking at having Asepto because it's not that the numbers are becoming higher. So that's why you should be -- you should report Asepto a separate business.
Asepto also uses a part of the same raw materials, what the flexibles use. So it's all part of one -- the packaging activity as such. But on the call, we do share with you that the margin profile in the Asepto is much higher as compared to the flexible packaging. And I think we'll maintain that. As of now, there is no plan to have a separate segment reporting for the Asepto business.
So in the past, you have given a margin guidance of close to 20%. So...
[indiscernible].
Okay, Okay. So coming to the next part, on the spreads. So for the current quarter, how are you seeing the trend of the spreads? Is it better than the last quarter? And if you can answer separately for BOPET and BOPP and also how many lines are you expecting in each BOPET and BOPP for the current year as well as next year?
So this year, there are no -- we will have a couple of more lines for the PET coming up by the end of this fiscal or I don't know, looking at the market today, if the competition wants to delay that, but there are about 2 plants, which are likely to hit. And thereafter, there is a -- for the next 3 years, we don't see anything coming up in the PET business because there's nothing in the pipeline.
On the BOPP side, there's nothing in this year, there's nothing in the next year, but a year later, then maybe a couple of plants, which will come to operation.
So this is only for India. And globally, are you expecting any new lines for this year and next year?
Globally, it's not been a mad game like the way it has been India. The capacity buildup has been rational only. But fortunately, because demand got impacted, that's why we see much lower volumes there, especially in Europe. And I told you that even from our America plant, we still achieved 100% capacity utilization in this quarter also and a higher level of capacity utilization even from the Mexican facility, but Europe is what is struggling to push the volumes.
So basically, the next 2 years in India are expecting only 2 lines in BOPET, nothing in BOPP until FY '25. So based on the channel section and all, what I found is that there are some new players for the first time who entered the packaging film business, and they are suffering because of the spreads that are prevailing right now. So have you seen any shutdowns or delays in the capacities that were supposed to come up, let's say, last year or maybe current year? Have there been any delays or, let's say, a permanent shutdown of those lines?
So there's been no permanent shutdown. Obviously, people may not be operating their plants at the full efficiencies, looking at the demand and supply situation. But the delay of any new commissioning is clearly evident, and that is inevitable as well. So we may see 6 months kind of a delay from the people who are today in the process of commissioning their facilities. So -- that's what -- but clearly, if one particular for facility can produce about, let's say, the new plant can produce about 45,000, 48,000 tonnes a year. So clearly, we will see that those plants not being done fully.
Got it. Okay. And on the Dharwad facility, you mentioned that you're running at 77% utilization. So any time line, how much it will take to ramp it up to 100% for Dharwad as well as the both the CPP line that we have set up, one in Dharwad and one in Dubai?
So 77% capacity utilization in the first quarter is quite an achievement. I would say, given the current market situation and given that it's a new market for us. We've been -- predominantly, we've been a North market -- North India market player. And here, we are new to that southern market, a 77,000 capacity utilization level seems quite decent. I think once the 6 months' time, once the demand supply situation improves a bit because as I said that India is able to absorb 1.5 to 2 plants each year given increased consumption each year. And so we've already seen a struggle of sluggishness of about 6 to 7 months in this or maybe close to about a year now in this. So another 6 months, I think the levels should definitely improve or even if the volumes do not improve initially, the margins will improve, for sure.
Okay. Okay. So this trend for the spreads in the current quarter, how is it looking like vis-a-vis the last quarter?
This quarter should be better and -- but we've only seen about -- we have only as of now, the management accounts for the month of July only, -- so -- but I think they'll be better than what we had in the last quarter, both India as well as globally.
Okay. Also, in your press release, I think you mentioned about revisiting the listing of the overseas business in U.S. So any timelines on the same?
I think that's all market dependent. If the markets would have supported thus, we had a huge momentum on that, and our investment bankers were almost ready to file the prospectus and all that, but then the market tumble. So now it all depends on the market as to the IPO markets and in the U.S., how do they come back? So we're keeping a close watch. We keep on interacting with our investment bankers. And obviously, that's on our agenda because that will hugely change the way the company is valued today because when we were talking to -- based on the guidance, what we had from our investment banks, I think it was nowhere close to the current valuations of the UFlex that you see in India. It was much, much, much higher. I can't share the number, but definitely, those markets about pricing us in a much different way.
But based on the, let's say, the previous M&A activity and the similar peers who are listed in U.S. What is the target EBITDA multiple that you would be seeing once this business gets lifted?
See when we were looking at the market at that point in time. So there were players who were -- so the range was between 8 to 12, now depending on the market, how the bind is market, you would have found a middle ground for that? So obviously, which means that given what are the levels here versus the valuations that you see over there, I think it's a different number. But having said that, that was the time when the earnings were also sort of very, very quite high.
The earnings have also taken the dip, especially in the international market. So when the pricing power comes back and the earnings come back with the higher capacities that we've set up internationally in the last 3, 4 years, I think that will be the right time to again look at going to the market again.
[Operator Instructions] The next question is from the line of Kaushik Poddar from KB Capital Markets Private Limited.
As to the margin, you just said that for the Indian operation, it is around 13.5% because of the problems outside, it has come down to 9% overall, right? In normal times, we used to have something like 17% to 19% margin. So when do you see us -- see the company getting to that kind of margin level?
I think we are asking to get back to those levels as you are. I think going back to -- I think the first target should be first to go back to on a combined basis to anywhere between 12% to 13% range first. So that's because as of now, the India and overseas business put together this quarter has been about 9.3%. I think if we first target 12% to 13% and then look at consolidating from there, that will be the right approach.
So in about a year's time, I think or in the Q4 of this year on a run rate basis, if we can achieve that, I think that will be good because for the overall year for it to become 12% to 13%, you will need a much higher number in the later quarters to come to an annual level of about 12% to 13%. So in Q4, if we can do about 12% to 13% range, I think that will set the tone for the FY '25 then.
Okay. And this overcapacity that this industry is witnessing will -- how -- when will that get over?
So India is the overcapacity situation. And as I said that India can take care of about 2 new plants each year without disturbing the market. So I think India should correct itself in about 6 months' time. But it won't go back to those dizzy highs, what we've seen in 2021. I think there'll be more rational pricing this time. And the capacity expansion would also be more rational because we, in 2021, '22, we were at a level where the payback period for the setting of the new facilities had come down quite considerably, and that led to increased capacity by the existing players as well as the new players got in there. But I think -- and that's what happens that when the business is high, the momentum is high, people look to replicate the success of a particular industry that's very normal because normally, the capital is the last constraint that you have for following a successful investment. So -- but I think we can easily look at in about 6 months' time, India should look at a much higher margins as compared to what they are in Q1.
Okay. and that's to the world, I mean your outside India market?
World, I think the first, the volumes have to come up. Europe still continues to be a drag. And U.S. is doing far better and the pricing power should also, as I said, that by Q4, if we can look at about 12% to 13% EBITDA margin range, that's what we are also -- we also hope for.
And my last question, you just pointed out about the listing of the U.S. in U.S. Is it the U.S. subsidiary or something else for listing in U.S.?
So we were looking to list our Dubai holding company, which actually holds the whole business.
Okay. All other than India business, right?
Yes, other than India business.
Okay. So that you wanted to list I think my questions have been answered. The next person can take over.
The next question is from the line of [ Esha Prasad ] from VSJ Fincap.
My question is that as compared to the previous quarter, we can see that at least at the top line has reduced. Is there a pricing pressure in terms of -- due to some competition? Or is it the impact from outside India business? Or is it the India business, which has brought the top line reduced it as compared to the previous quarter.
So there are 2 things here. One, we've seen our overall sales volume going down by about 7.5% on a year-on-year basis. So as compared to June '22 and June '23, we've seen about a 7.5% dip in the sales volume. But the revenue debt is about 19%. And the difference is best explained as that the raw material prices have also corrected. So it's a combination of 7.5% volume dip plus some margin dip and very -- to a very large extent, the raw material price dip, which has led to the revenue being down by 19% on a year-on-year basis.
Okay. Sir, another question is that how much impact -- how much time will it take for the new capital expenditure, which you're doing and your plans to increase the capacity? -- will it be seen in the next 2 to 3 quarters? Or how long will you see it happening?
Which CapEx, there is no further CapEx.
The Panipat plant, which -- or is it is producing currently?
So the Panipat plant, to the extent we are going to consume that raw material within our own plants is not going to be a top line accretive. It will be margin accretive considering that your cost versus the market outsourcing that margin you will retain. But to the extent you are not selling in the market, it will not be revenue accretive from -- for us because we're going to consume that material in-house in our plants. But we expect this plant to get started by end of this fiscal.
Okay. Sir, what challenges do you perceive in this packaging sector for the next 2 to 3 quarters, which can impact the business?
We've seen last couple of ones that this dollar issue, the consistent increase in the interest rates in U.S., Europe and all that is actually starving a lot of economies with the dollars. And that is actually sort of has set in sort of huge depreciation of their currencies. We saw Egypt last year, we are now seeing Nigeria this year. Mexican currency last year also devalued good that it got better this quarter. But this is the main thing that what we are seeing because the dollar availability in some of the developing economies remains to be a concern.
So it's becoming a challenge both from your procurement of the raw material prices because if you don't have the dollar availability, that limits your sourcing of the commodities from the international markets also. And that's been our main strength that given that we are a global player. So we can source our raw materials from any which country from where we think that it has more cost beneficial to us.
So I think Egypt and Nigeria both have been huge hits in terms of the currency depreciation. And that's where last year also, we had -- FY '23 also we've substantial losses, both which affected above EBITDA level and then as an exceptional item because Egypt devalued its currency twice. So Egypt has almost devalued by about 100% in the last one year or so. And now we've seen Naira depreciating by about 62%. I hope that the dollar interest rates going up gets settled soon because that will then mean increased flow of the dollars to these economies, which will sort of calm their currencies, and that's what seems to be a big challenge as of now.
The next question is from the line of Rajiv Arora from RS Leasing Consultant.
First of all, I'm sorry, I joined a bit late. I just wanted to know whether there is any change in update from the last quarter with regards to -- I mean the communication with.
[Technical Difficulty]
Ladies and gentlemen, we seem to have lost the audio from the current participant. We'll move on to the next. That is from the line of Chirag Singhal from First Water Capital.
Sir, what is the CapEx for the current year and next year?
I think we need to now the balance that needs to be spent on the plant in India is about maybe INR 150-odd crores. And in Egypt, it should be about -- close to about $60 million still because that plant was started much later. So that plant is costing us about $1 million. So I think $60 million there, which will be spread over this fiscal as well as part of the next fiscal, but India CapEx would happen within this year. And debottlenecking of Asepto business will also get completed in this fiscal.
Okay. So INR 150 crores and INR 100 crores will be this year, plus some portion of the Egypt expansion. So you're talking about the PET chip facility, right, at Egypt location?
Yes, PET chips facility.
Okay. I also wanted to ask you on the Asepto expansion plans because you mentioned that you are quite confident that the company should ramp up to 12 billion packs once we are done with debottlenecking. So where are we planning to expand next? And what are the time lines for the next phase of growth for the Asepto?
There's nothing on the anvil right now. So I think that call will have to be taken, depending on how fast the extended capacity to 12 billion packs is utilized.
Okay. Understood. And that's it from my end. Just one more thing. I think the subsidiary financials are not uploaded yet on the website. Can you please upload the FY '23 subsidiary annual reports?
Okay. We will look at that.
[Operator Instructions] As there are no further questions, I now hand the conference over to the management for the closing comments.
I think -- thanks, everybody, for being on the call today. And to that extent, we tried our best to give you to answer all your questions, all your queries about the performance in this quarter and the guidance as to on the CapEx and the business outlook for this year and the next year. We hope to remain in touch with you and keep on updating you on what's happening in the industry. And I can only say that because we are diversified. So that gives us a leverage over the competition to still build momentum in the business. And the packaging films business, which is currently seeing sluggishness both in India as well as export markets.
India, the volumes are not impacted, but the demand supply is clearly impacting the margins in the business and overseas, it is impacted by the volumes drop. So the target is in all the salespeople -- the entire team is now working much harder in terms of regain their volumes in those markets. And once the volumes are regained, I think the pricing power will also sort of jump back.
That's what we are hoping for. We are seeing the whole team is working very hard, including Mr. Anantshree Chaturvedi, Mr. Apoorvashree Chaturvedi who are handling the European Middle East and the American direct teams, respectively. So I think we show that given our leadership position in the industry, we shall be in a position to sort of set the things right in the packaging film business within this fiscal. That's what we are hoping for.
And we'll continue to build momentum in our other businesses, which have shown tremendous resilience during the period of packaging films business is of course a bit sluggish. Thank you, gentlemen. Thank you, everybody on the call, and we hope to remain in touch and we'll shortly be. Thank you.
Thank you, members of the management team. Ladies and gentlemen, on behalf of Dolat Capital, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you
Thank you.