Uflex banking on innovation to boost its margins
Uflex Limited- India's largest global flexible packaging solution company is all set to grow at a steady rate and improve its footprints in global markets by adopting a strategy, which will allow the company to be closer to its customers and hence service them better.
According to Mr. R.K. Jain, group president for Uflex Limited, the company is attempting to ramp up the order sizes from North America, also the largest market in the world for flexible packaging, and trying to eventually set up a manufacturing unit for its packaging products which are in high demand in several markets internationally.
Uflex head-quartered in Noida (National Capital Region, New Delhi) has state-of the-art manufacturing facilities in India, UAE, Mexico, Poland, Egypt and USA. Uflex serves as a one-stop shop flexible packaging solution provider cutting across varied sectors spanning USA, Canada, South America, UK, Europe, Russia, CIS countries, South Africa and other African countries, Middle East and the South Asian Countries.
The global packaging industry is growing at a steady pace of 5 to 6 percent per annum. The US market is growing at 3 to 3.5 percent annually, while Europe at 4 percent and China market is growing at 12 percent annually. Indian market for flexible packaging is growing at 17 percent annually and is catching up with the developed markets as the penetration of the flexible packaging is at mere 25 percent of the consumer goods when compared to the 99 percent for US and Europe markets which are huge and matured.
Uflex Limited is trading at a multiple of 6.82 against an industry average of 18. The market cap for Uflex is Rs. 1,361.91 crores. With a face value of Rs. 10 per share the stock offers a dividend yield of 1.43 percent at current market price. The 52 w high for the stock is 201.70 and 52 w low is 112.05. At Rs. 188 per share the stock is trading above its 200 days simple moving average indicating bullishness in the scrip. The stock has delivered 48 percent returns over a 1 year period and on YTD basis the stock is marginally up by 2.5 percent.
Investors may look at Uflex Limited as a useful diversification in their diversified portfolio keeping in view the upside potential the company may have based on its strategy to expand globally while continuously innovating to improve on its margins.