UFLEX Limited (NSE: UFLEX) Q4 2025 Earnings Call dated May. 20, 2025
Corporate Participants:
Surajit Pal — Investor Relations
Rajesh Bhatia — Group President (Finance & Accounts) and Chief Financial Officer
Unidentified Speaker
Analysts:
Sachin Bobade — Analyst
Unidentified Participant
Chirag Singhal — Analyst
Aman Sonthalia — Analyst
Mehul Savla — Analyst
Siddharth Chhabra — Analyst
Kaushik Poddar — Analyst
Saket Kapoor — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 FY ’25 Earnings Conference Call of Uflex Limited hosted by Dolat Capital Markets Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded.I now hand the conference over to Mr. Sachin Bobade from Dolat Capital Markets Private Limited. Thank you, and over to you, sir.
Sachin Bobade — Analyst
Thank you,. On behalf of Dolat Capital, I welcome you all to a Q4 and FY ’25 earnings conference call of Uflex Limited. Hope you all are staying safe and healthy. But from the management team, we have with us Mr Rajesh, Group President and Chief Financial Officer; and Mr Sujit Par, Vice-President, Head of Investor Relations.
Now I hand the floor to the management for their opening remarks and then we would have question-and-answer session. Over to you, sir.
Surajit Pal — Investor Relations
Thank you. Thanks, Rachin. Good afternoon, ladies and gentlemen. Thank you for joining us today for the Q4 and FY ’25 earnings conference call of Limited. Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements, which are predictions, projections and other estimates about future events. These estimates reflect management’s current expectation about the future performance of the company. Please note that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied.I would now request Mr. Rajesh Bhatia, Group President and CFO for this — for his opening remarks, following which we will open the forum for an interactive question-and-answer sessions. Over to you, sir.
Rajesh Bhatia — Group President (Finance & Accounts) and Chief Financial Officer
Thank you. Thank you all the participants for the our Q4 and FY ’25 earnings call, overall, I would say to begin with that a very satisfying year-after we had shown that the revenue and the EBITDA had dipped in FY ’24 as compared to ’23. And yes, we had the reasons to explain for that, but end-of-the day, you always feel much better if the numbers are in positive despite all the you know all the reasoning that we have to give for this.
Happy to say that this year and this quarter throughout the year, we’ve been doing reasonably well. We’ve seen the volumes gone up, we’ve seen the revenue going up and we’ve seen the operational EBITDA has gone up substantially on a consolidated basis by about 18-odd percent this year as compared to FY ’24, which is which is very heartening. Also, we have a much lesser exceptional loss this year of about INR177 crores only in Egypt and Nigeria. So actually, we had a much higher number in the first two quarters, but the next two quarters, there has been some recruitment. So for the year as a whole, the numbers now stands at INR177odd crores versus INR871 crores what we had in FY ’24. And consequently, we have a PAT positive at about INR142 odd crores versus the loss of about INR690 odd crores which we had in FY ’24. Notable is that the Packaging films volume is up this year as a whole by about little over 10%, 10.4%. Sales of the packaging films are up 10.3%. The Packaging films margins also improved in this year. And overall, the reason for a better performance in this both on the revenue side as well as on the profitability side is more contribution coming from Packaging films business, especially India, especially Hungary, then we had a huge turnaround in Nigeria. So all these factors have contributed to, you know, a higher profitability in FY ’25. Always have to cover the packaging because that’s been a shining star for a few years now and will remain so in the future. So even in this year, we have done about 7.87 billion packs, P&C capacity of 7 billion packs, which — which is about more than 110% capacity utilization levels. And we as we commission our 12 billion tax capacity, which is — which is now in the final stages, I think we’ll look for a much better performance from this as it’s this business you know sort of will not have capacity bottlenecks to expand its horizon.
Also, I think for FY ’26, we will have a much better expectation of all these businesses. As you know, we’ve seen that better traction in volume for all the businesses put together and obviously some of the schemes which have come to our commissioning in the last — in the last couple of one month or so for FY ’25, we will definitely see a full-year performance of that plus some of the projects which are going to get commissioned in FY ’26, especially our Mexico project where we’re going to make the WPP bat for the pet food industry. Our aseptic packaging business in Egypt, which is which we had announced to the markets. And our recycling facilities at Noida given that recycling has been commitments have to be — have to be fulfilled by all the brand owners from 1st of April. But you know, we’re going to commission that project later this year and the benefits will start sort of rolling in.
So overall, as I said that on a consolidated revenue increased 0.4% to over INR15,000 odd crores with the packaging films are you leading the pack with the sales and volume growth of about 10.4%. And this is the first time we have achieved over 500,000 tonnes production and sales volume in our packaging films business. So as we ramp-up the capacity utilization in some of the plants where we have still headroom typically we can do better in Nigeria. We can do better in Poland which has been seen exports, the imports from — especially from India and that is where the — there is some pressure on the local production given that the European costs are much higher as compared to — as compared to the cheaper imports from Southeast Asia or from India.
So, yes, there are couple of things which we can do better in the current financial year. You know, we had 72% capacity utilization in our pet chips facility, which was the first year for our plant. But obviously, we have a headroom there to go up as well. So all these, I think optimization and improvement in efficiencies, we will surely take it up in FY ’26. And as FY ’26 also will see a commissioning of some of the new initiatives which we had announced earlier. So FY ’27 onwards, we will look at you know, and top-line as well as the profitability growth. Coming to the debt side, this year we had a debt of gross debt of about 8,800 odd crores and a net-debt of about 6,800 odd crores and this includes long-term as well as the working capital debt. And we have next year a repayment of about INR1,175-odd crores for the long-term portion of the debt working capitals are more rotational in nature. So as the business ramps-up, obviously the working — you need more working capital. But we will be looking to repay INR1,175 crores in FY ’26 of our long-term debt. But yes, we add-on some further debt also because of the ongoing projects, the three projects of the WPP bat, the recycling at Noida and acceptic expansion at Egypt. So I think the overall sense is that FY ’26 looks to be more promising.
Overall in all the business schemes we will have the benefit of our own availability for even for our international operations from our Egypt facility, a higher capacity, it’s available in the Aceptic Packaging India business and obviously, you know, there is headroom to do better utilization of your capacities in certain countries, which I just explained. And yes, overhang remains that in India, the BOPP capacity expansions industry-wide is coming into play starting from June onwards. So we’ll have to closely watch as to how that you know-how that will impact the industry players behavior in terms of you know the pricing and the margin.
So that’s a overall a nutshell from me. I’ll also say that for the year as a whole, for this quarter, we spent about INR668 crores on the capex and the large one was our packaging and WPP projects. And for the year as a whole, we spent about — we did about INR1,700 odd crores of — I’ll give you that number. I think this INR1,70026 crores is what we spent. INR1,726 crores is what we spent for the whole year-on our various capex plans. And next year also, we are looking to spend close to about INR1,200 crores on our — on our ongoing growth expansion projects. So even if that is mapped largely from the new debt in the old debt which has to be retired next year is going to be, again, as I said, INR1,175 crores. So we are looking to — we will definitely add some more debt as the working capital requirement for the expanded business will still have to be met out. But on a capex debt versus the repayments, they will more or less even out for the FY ’26 period. The only working capital additional requirement for the existing businesses as well as for the — for the new businesses that get implemented and that gets scaled-up will have to be taken from the — taken from the bank.
Having said that, we also as the strategy, we are sitting on a cash also, substantial cash also. As on 31st of March, against a gross debt of about INR8,100 odd crores, we’re having a cash of about INR70 — INR1,273 crores of which is — which gives us a sort of leverage in terms of you know, planning your cash flows in a much better way and access more as a safety for the business that should there be any because of the market conditions. So you know that you know you have substantial cash to you know sort of take care of your any, any that servicing commitment and all that. So that’s from me the business highlights for FY ’25 and the outlook for FY ’26. Happy to you know answer any questions that you may have on FY ’25 numbers or the FY ’26 outlook.
Questions and Answers:
Operator
Thank you, sir. Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star in two queue. Participants are requested to use handsets when asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Shashank Agarwal from. Please go-ahead.
Unidentified Participant
Sir, I have two questions. So first is your recent investments in recycling have been towards the chemical recycling part. Sir, how feasible is the tech because there was some report that the entire process is more expensive? Sir, second one is, sir, how will the recent crude oil prices affect the business good segment?
Rajesh Bhatia
So the first part, you were not very audible, so I’ll repeat the question. So the first part what you saying is we are going-in for mechanical recycling vis-a-vis the chemical recycling. Why is that so? Is that your question?
Unidentified Participant
No, sir, my question was the chemical recycling that you are going into, sir, is it feasible or is it more expensive than the virgin chip plant?
Rajesh Bhatia
No, we are not doing the chemical recycling. We are only doing the mechanical recycling, okay. So mechanical recycling, the recycled material ultimately is going to be bit more expensive for the buyers you know if the government has said that in the in the rigid packaging, you have to use 30% recycled content. So this will settle over a period of time. And in the short-run, there will be a sort of demand-supply challenges. But nevertheless, on an overall basis, to begin with, you know the prices on the recycled products may be higher and as the capacity settles, I think they will settle. But on the whole, even after everything that does settles and you know the normalcy comes, still it will be expensive as compared to year. What was your second question?
Unidentified Participant
Sir, my second question was regarding the recent slump in the crude oil prices.
Rajesh Bhatia
So how — what is your question? That recent slump in the…
Unidentified Participant
Will there any be, say, inventory losses or revenue losses?
Rajesh Bhatia
So I don’t really think so that there will be large adjustments on account of that because all your businesses are able to sort of move on with that your packaging films business is adjust that on a real-time or on a one-month lag basis and your packaging business gains when the — when the raw-material prices go down. So the crude prices go down will not — will be an interadjustment between the packaging films and the packaging. But overall company basis, there’ll be no, no big deviation in terms of the financial number.
Unidentified Participant
Sir, one more small question. Sir, going-forward, what is your view on reducing the company debt?
Rajesh Bhatia
So I think we’ve said that the only way to reduce the company debt is the amortizations that we have to pay. And as I said, next year, we have about INR1,175 crore to pay. So if there are no further, you know expansion happening. So every year for the next couple of years, we’re going to pay this much of a repay this much of a debt. Once this investment cycle stops, obviously there’ll be a reduction of debt. But other than the normal amortizations what we have with our lenders, there is no other way that we are looking at, you know, from raising any equity or by doing anything else, we are not looking at you know, reducing the debt at present.
Unidentified Participant
Okay, thank you.
Rajesh Bhatia
Thank you.
Operator
Thank you. The next question comes from the line of Chirag Singhal from First Water Fund. Please go-ahead.
Chirag Singhal
Am I audible?
Rajesh Bhatia
Yeah, yeah.
Chirag Singhal
So my question is on. So the new the debottlenecking you mentioned that it’s expected to commission in Q1. So is it already commissioned?
Rajesh Bhatia
Not yet but I think soon we it will get commissioned.
Chirag Singhal
So it will be more towards let’s say in the month of June?
Rajesh Bhatia
I literally can’t you know give you a precise answer on this but when I spoke to my business team on this they said that we are very close to achieving that.
Chirag Singhal
Okay and could you help me with the overall guidance for Aceptic volumes for this financial year?
Rajesh Bhatia
So Aceptic, I said that we produce 7.89, 7.87 or 7.89 billion in this year in FY ’24.
Chirag Singhal
Yeah. Yeah, no, I was asking for the guidance for the FY ’26.
Rajesh Bhatia
Guidance would be any for FY ’26 would be in the range of 10 to 10.5 billion.
Chirag Singhal
Okay. Just one more question on. So recently there are many other players who have set-up a capacity. So SIG recently commissioned the plant, then I think sometime GLS set-up a plant. So do you see any challenges due to this increased supply? And if you can also provide with the industry level data, I just want to understand what is the total aseptic capacity in India, how much of it is exports? And since SIG and all were importing earlier, what was the total imports in India?
Rajesh Bhatia
So I can give you the overall industry number, which is about 36 billion annually of which we will have 12, 16 is your Tetra pack and rest eight is other players four and four I’m as a SIG. So I think industry as the consumption as we said is growing at high-teens. So overall, we don’t see any challenges. SIG in any case, I’m told, is a different technology than and it will take time for that acceptance and all that, not that I’m sort of underestimating their capability because they are a global player as well. But you know, as of now, I can only share this industry landscape and our expectations for performance of this business in FY ’24.
Chirag Singhal
So you are saying that total capacity 36 billion pack. And what about the production exports and imports at the industry level?
Rajesh Bhatia
Both have numbers right now for them of those.
Chirag Singhal
Okay. No problem. That would be it from my end. Thank you.
Rajesh Bhatia
Thank you.
Operator
Thank you. The next question comes from the line of Aman Santalia from AK Securities. Please go-ahead.
Aman Sonthalia
Good evening, sir. Sir, we are setting up a very large plant in Egypt. So are you sure of that we will be able to send the entire quantity the next two years.
Rajesh Bhatia
So, yes, so this question, you would have asked us also when we were going to set-up the first plant in India way back-in 2019, though. So as you do see yes. You will — you have at that time was a — was a clear leader in this market. You know, we’ve seen historically that there are certain products in which you know a second-line or second supplier could never develop like for Amul Butter if you see. But you know I think the probably the questions that we had to ourselves when we were looking at setting up as competitor to Tetrapad was more pertinent in the year ’19 when we set-up the first plant. I think now we are for sure that we are going to — it’s going to be a success story. It might take a bit of a time to ramp-up the capacity utilization level, the way it happened in India also. But once it drew, Aflope, you yourself are seeing that for the last three years now, we are struggling for having a capacity available. Because when we didn’t have enough capacity utilization, given that it was the acceptance was taking time and then the COVID came in, we also developed a export market for our product and today we do export about 35% of the output of this plant out of India. So with the result that I’ve been saying that we not — we are not able to give a — you add-on more customers in India because of our capacity constraints. But once that happens, the overseas part of the business can be taken over by the Egypt plant and this plant can do more of domestic supplies and all that for which there is — as I said that high-teen market the growth is — growth is there.
So I think as I said, this question was more pertinent when we were setting up our first plant. And we are — today we are 100% sure that our plant will be able to sort of ramp it up faster. We have told you that Egypt itself consumes about 5 billion packs a year and Egypt imports today 100% of its with packaging. So that itself gives you a reasonable base to start with.
And then you have Africa, you have Europe, Egypt to Europe, you have advantage in terms of mill duty as well. So you know in couple of years’ time we’ll be — we come to you that we are looking to expand the capacity.
Aman Sonthalia
That’s good. Since this apprail, I think EPR has got implemented. So are we seeing something on-the-ground also or it’s just that the government has announced and it’s got implemented on the paper, but I don’t think there is something happening on-the-ground.
Rajesh Bhatia
So people are trying to you know get hold of as to how do we, how do they comply with these norms and all that but I think this will — it just started from 1st of April. As I said, even our capacity in Sector 155 where we are going to spend INR317 crores is going to come up only and the best-case possible by the end of this year. So not that I know of that many others are also not ready. So everybody is getting ready with the sense that government is serious and they are going to implement in spirit and that is why the capacity is being landed.
Aman Sonthalia
There is a huge volatility in the price of and POPP in the domestic market. So is it the same in overseas market also or it is just confined to India? And how is the price there and how is the energy price-cost of production is there in the overseas market.
Rajesh Bhatia
I think obviously the markets we are in you know, especially the Hungary and the Poland market where the energy costs are higher, Egypt energy costs are moderate. India is you know, in-between moderate and high so but that is not the point. The point is you know, in any which way whatever you will produce in India will cost less than the cost of production you will have at the European plant, given the manpower, given the compliances, given the energy prices in summer — in the Europe — in the whole of the Europe and all that. So today, it makes extreme sense for everybody to — for the European consumers to import from India at a — at a cheaper price or from Southeast Asia at a cheaper price. And that’s what is happening and that is where you see our Poland food plant capacity utilization, it has increased in this quarter versus the Q3 from 60% to 70%. But the pollen plant, we never operated at 70%.
When we set-up a new capacity, the old capacity for years together operated always at above 100% capacity utilization levels. So — but now for the total capacity, we’re doing about 70% over there. We are only trying to see that how do we take it back to their 100% or beyond 100% level. US plants are going up, they came to Salo, say Hamlo, you know we are operating at above 100% capacity utilization level. But somehow there are not much imports — import threat in America, but import threat in Europe after the India capacity overhang has — has been affecting us at our Poland facility.
But Hungary BOPP because in India, there is no mismatch. So BOPP at Hungary and Egypt, we have BOPP outside of India only at these two facilities is operating at 100% level.
Aman Sonthalia
So since few of the new capacities are coming in India for BOPP. So do you think that it will also affect Hungary and Egypt in future in near-future also?
Rajesh Bhatia
It might. So you know, but you know, the capacity addition on the BOPT side is still more manageable than the capacity addition, what happened in 2023 on the — on the pet side. So hopefully — and then there are large players in this Crossmo, Max, Jindal. So hopefully, you know, I — we should not see the kind of madness what happened at the time of the. But again, only time will tell as to how the competition stacks up in this category. Now that in the next three to three months also, we’re going to see at least 20,000 tonnes of capacity being added in a market in an Indian market which consumes about 84,000 to 90,000 tons a month. So that we are not very sure about the future of this film business, but apart from film, other businesses are being very good film business, we are not saying that we ensure of future. We are sure of future of this business.
But in any commodity business, you see there are cycles when the capacity gets bunched together and that’s the time you see the capacity utilization across the industry are moving down and then again it stabilizes. And once it starts reaching 80% industry-wide, then people again start to plan new investments and that’s where you again you get into that cycle which is about a seven to 10 year kind of a cycle you know that happens across the industry.
We saw in 2016, there was a mayhem in terms of the demand/supply. So that stabilized by the time COVID came, you know, the industry was already operating at a very-high capacity utilization level. So COVID gave it because of the demand-supply because of the supply-chain disruptions and everybody made a supernormal profit in ’21 and ’22. So thereafter, a lot of capacity came, especially in India, both on the pet side as well as on the BOPP side. We’ve also seen a lot of new players who set-up the capacity in India is — they were, they were small consumers, they were into you know sort of value-added packaging and all that but you know they also looking at some numbers which were there, the prices of the films which were there at that point in time. So they also got alluded that there are huge margins and obviously when all the capacity came together, the margin — margins fell to what we see in 2024 and 2025, as I said, we’ve seen a ramp-up of the volumes also, we see the price going up also.
But you know when such a large capacity gets added. So and let’s also see from that point-of-view that the Indian manufacturers started exporting in a big way to Europe. So the domestic prices got that became better by virtue of their exports because of his would have remained would have resulted in very low margins. But because of that export happening, a sort of balance happen in the domestic market. The overseas prices are still better as compared to India. And I think as the capacity utilization across the industry goes up you know, in India there is more than 10% volume growth every year. So that it will get adjusted soon.
Aman Sonthalia
One last question, what is the update on Hungary high derivation value-added film?
Rajesh Bhatia
But separately.
Aman Sonthalia
Okay, sir. That’s from my side. Thank you.
Operator
Thank you. The next question comes from the line of Mehul Sawal from RW Equity. Please go-ahead.
Mehul Savla
Hello. Yeah. Just wanted to check on this flexible packaging, there was this whole trend of moving to monopolymer from sustainability point-of-view. But now this government has talked about having a certain portion of recycled component. So will both grow together or is it that you know with this recycling part, monopolymer will not be very like the way to go for companies who are looking for packaging solutions.
Rajesh Bhatia
I think mechanical recycling is proven is a sure short way to you know, tackle this plastic waste and all that. And once it becomes successful, then this is what will get followed in other jurisdictions as well. So let’s wait for a couple of years for it to — for it to succeed and before we have an answer. Monomer also if you use, so what do you do that? You will again have to recycle that as well. So that may be you know a different recycling, more of a chemical recycling and less of you know mechanical recycling the polypropylene you know you will take it back to the refinery you will make oil with that and all that stuff but mechanical is more cleaner and you know that you can make the you can use the old packed bottles to make raw-material for your polyester packaging films you can — you can use that for your packaging bottles as well. So it looks like that mechanical is the answer as of now, but let’s wait for the next couple of years before we have more.
Mehul Savla
And is there any sector thing like for food purposes, we can use one by not like for non-food grade, you know the recycled part is okay or it doesn’t matter. Even for food grade, you can use part of the recycled, the mechanically recycled.
Rajesh Bhatia
So on this recycled material that we are talking about is all, you know can be — you can pack food even using the recycled packaging. So our packaging is already-approved by the US FD a and everybody else will also get those.
Mehul Savla
Okay, sir, thank you, sir.
Operator
Thank you. The next question comes from the line of Chabra from Manivara Asset Advisors. Please go-ahead.
Siddharth Chhabra
Yeah. Hi, thanks for the opportunity. Now when you were discussing the overhang, particularly the BOPP expansion coming in this year. So we know directionally what kind of effect it’s going to be. There’s going to be pricing pressure and margin pressure. But can you give any early idea of that you would have what the quantum of it can be? Will it be a 5%, 10% kind of pricing correction or are you expecting more severe?
Sachin Bobade
So for BOP B, actually we have more presence in pet and less in BOPP. So our overall BOPP is only about 20% of our total packaging films business. So we don’t see that will — yes, it might get impacted. I’m not saying that it may not get impacted. But how much time and duration and expectations, I think we’ll have to sort of we’ll have to go by the actual experience as and then you know sort of this happens like you know if I tell you our total capacity which so we do about 400,000 tonnes of and 150,000 tons of BOP for us okay. Right. And within the specialty segment or the value-added film segment do you think that segment will be protected more or less or will there be a adverse effect there as well. I think you can reasonably expect that the value addition of added products will get a bit of an insulation from this overhang in the capacity for sure.
Siddharth Chhabra
Okay. All right. Yeah, that’s all from my side. Thank you.
Operator
Thank you. The next question comes from the line of Poddar from KB Capital Markets. Please go-ahead.
Kaushik Poddar
Yeah. Can you give us a sense of the debt — debt-to-EBITDA over the next two, three years. I mean, you ended at around 3.6 last year. So how do you foresee that ratio?
Rajesh Bhatia
We are at 3.6. You know, depends on how the EBITDA also behaves. I think max we can look at is about 3.9 odd or so.
Kaushik Poddar
That’s for this year.
Rajesh Bhatia
For FY ’26 and/or FY ’27 middle number includes the working capital that we have to also have for this. Because as I told you that of the announced projects, I think we need to add-on debt of about INR1,200 odd crores and the same amount is what we have to repay in FY ’26. So the debt that will get added will only be the working capital debt that will get added. So if our EBITDA for the next year improves by, say, 10%, we will be looking at about INR2,100 odd crores of EBITDA next year. So ’21 21 into 3.6 will take our debt level to about 7,550 from 6850 which is which is you know sort of which takes care of my new working capital as well. But if EBITDA is INR1,900 only, so then 3.6 would mean the current level. So the working capital will have to be the next one.
Kaushik Poddar
But can you give us a sense of EBITDA for the next — for this current financial year?
Rajesh Bhatia
We expect that FY ’26, we will have a 10% revenue growth and 10% revenue growth over currently INR15 odd will give us about INR16,700 odd crores and a 13% margin on this 12.5% to 13% margin should give you INR2,100 odd crores of EBITDA.
Kaushik Poddar
Okay, okay. And on the film side, you are okay with the BOPET scenario. I mean BOPP you said there is some concern for the BOPET, you don’t see much of a concern, right?
Rajesh Bhatia
Okay. So BOPET, we want better because as I told you that some of our facilities in Poland are at a lower utilization level given that there’s a lot of exports happening from India. So I think we would love to see our plants back-in full action. So hopefully, next one year as the India demand/supply narrows, so we will have a better situation in our European jurisdictions.
Kaushik Poddar
Okay. And see FY ’26, you are thinking of, let’s say, 10% top-line growth. Can we expect a similar growth in FY ’27 also with all your plants in operation? I guess all your expansions will be in operation by FY 10 — by the end of FY ’26, is it right?
Rajesh Bhatia
But I don’t have a number right now to give you for FY ’27. But surely with WPT, with the recycling and with Acepto Egypt getting commissioned, you know there’ll be, there’ll be obviously definitely some revenue accretion to this and all that. But you know what happens is sometimes when you actually start a you know, for — because it takes time to stabilize for some of the initial couple of years, you may not make that much of a profit that what you are actually looking for. It takes time for the things to settle. So I don’t have a sort of a clear-cut visibility for FY ’27. Yes, theoretical visibility will be there that if you add this much of a top-line with this much of an EBITDA margin, you will have that. But I but I think let’s give us couple of more quarters before we can guide you on FY ’27 as to what we’re looking at. By the time, we’ll also be sure as to how the development and the construction of our projects is coming — is happening.
Kaushik Poddar
Are you thinking of any other projects? I mean, this time every time we see a newer project every financial year. So for the moment till that time that your debt-to-equity improves can we can get that there is no more project really coming, or how is it?
Unidentified Speaker
I don’t mean that this season. The board and management you know the family has to take that decision. So if there are opportunities they’ll be keen to expand there but as I said that if we are in let’s say we go to 2,300 of EBITDA in FY ’26 itself, obviously you know you much more you know in a different frame of mind then you will be at an EBITDA of INR2,000 odd crores in terms of looking at as to what next? So growth has quite — you know, has been, you know, our style of the way we performing. Yes, we have added capacity over the last four, five years, but we have — we have performed also. And we do expect that there were temporary blips in the margin profiles because of the overcapacities, et-cetera and all that.
But I think we are a very large player in this business and we have to look at protecting our market-share markets and all that. So if there are opportunities which make sense in the future as well, there will be — there will be expansion. But yes, we will remain very, very aware about our debt levels and all that. So 3.6 current level and all that should be should be overall guidance that this is we can look at this as a future preference point for our debt level.
Kaushik Poddar
Okay thanks and thanks a lot.
Operator
Thank you. The next question comes from the line of from Equitas Investments. Please go-ahead.
Unidentified Participant
Good evening, sir. Sir, I have three questions. The first one being, what are the new capacity expansion that we have planned for BOPP and BOPET?
Rajesh Bhatia
We don’t have any capacity addition plan for and BOTP.
Unidentified Participant
Sir, has there been any new capacity planned in the industry perspective in general?
Rajesh Bhatia
So industry, in India, on the BOPP side, I told you that there is going to be about 20,000 tons of capacity getting added in the next three to four months. On the pet side, I think there is only one-line which is — which was announced, which is which is expected to get commissioned. I don’t have the timing for that. And on a pet line, now recently, General Poly has announced a few days back, they’ve announced a BOPP line, a CPP line and a pet line in India.
Unidentified Participant
Perfect, sir. Sir, and if I could get a tentative idea about the margin profile of the company, vis-a-vis the industry?
Rajesh Bhatia
So I think we work-in various segments of the business, packaging, films, packaging ollographic wanting more towards the BOPP and the part so BOPP and BOPED part would be about 10 odd percent currently say and for the industry it will be in the similar ranges or a bit higher. Depending on the value-added, it could be 1% plus or minus but largely in that range only.
Unidentified Participant
Perfect. Sir, my last question will be regarding the current spreads of BOPP and. If you could give some light on that.
Rajesh Bhatia
Sorry, on?
Unidentified Participant
On the current spreads of and current. I think important EBITDA margin, what I told you the POPP and the PAT, overall 10%, 10.5% 10% to 11% range is what the industry as a whole is getting you know we are not only in India we are also in the overseas territories as well so Nigeria’s profile will be different India would be different, USA would be different, Europe would be different so I think we’ll have to talk a blended average only as of now. And the blended average for this year would be 10 to 11% and for guidance will also be in the same range or we’ll improve something. And the guidance could be given that VOPP may see some competition, the PAT may improve a bit. So it will be, you know, give-and-take for — between BOPP as well as the pet. So overall guidance for this year-on the pet industry margins on the packaging film industry margins, I think let’s look at 10% to 11%. Sure, sure. Thank you so much, sir.
Operator
Thank you. Thank you. The next question comes from the line of Saket Kapoor from Kapoor Company. Please go-ahead.
Saket Kapoor
Yeah. Team, said is got opportunity, Kelly is that firstly, sir, if you could give us some color on our business in terms of you have been alluding to the fact that there will be capacity addition for DOPP going ahead and BOPET has performed better. So if you could just give us some more color how the spreads have been for Q4? And when we look at the Q-on-Q number, December to March, we have seen a lower profitability. So what factors have — how are the margins for the NIM business shaped? Some more color on the same set. I think that much of what we saw in the Q3 versus Q4, you know that much of variability is always there on a quarter-to-quarter basis. So we saw that in the packaging — in the packaging films, you know there was some correction which happened in Q4 over Q3 and that’s the reason you know the margin profile is the profitability in Q4 is lower than Q3. But at the year-end, you will — you also have a lot of things which you need to provide for and all that. So I’m not sort of getting on to that because if there is a loss in the packaging business extern there be a better margin in the packaging business because you know the packaging business will always gain perform better when the packaging film prices go down and vice-versa, because they work with — they have orders in-hand and then they buy their raw-material at a lower-cost and all that. So it gives them then that benefit. But overall, between Q3 and Q4, we didn’t see much of a differential product category-wise. We only saw that packaging films prices in the market became a bit soft in Q4 as compared to Q3 like can you give us provide us with the spread for the? How has the spread shaped up for the quarter? No, we’ll have to. We’ll have to get back to you that offline only.
Unidentified Participant
Okay. And sir, I also like to congratulate the Board for a INR30% dividend payout. So thank you for looking into the aspect of it and now, sir, coming to the key concern on the valuation metric, which you already mentioned that we are not looking for any — any raising of equity. But earlier, I think so we were — the investors were — were provided with the input that there might be some listing of our some foreign subsidiary or some value-creation exercise may be carried out. So if you could just provide us with some color, where are we in midst of that part of our subsidiary listing or value unlocking if any that we are looking? And second question was about the value-added contribution set. How are we seeing this percentage moving up for the current financial year vis-a-vis the percentage which we have done, which we have for the current. So if you could just give the competitive number of what kind of growth we are looking for these two factors, sir.
Rajesh Bhatia
The first, our plans for our listing of our overseas subsidiary, I’m saying — I’m not saying that we will be not prepared for that. Yes, we are prepared for that. But you know, as of now, there is there is not much opportunity in that space. So that is why I said that in near-term, I don’t see that any equity raising to reduce the debt or anything else. So — but having said that, we had initiated that, we had worked upon a lot on that and then the market stand and all that. So that exuberance which was there in-markets at that point in time, we don’t still find in that they are back and you know we can look at-equity raising in the near-term. So when I said that, you know that was only meaning in the near-term. But if there is an opportunity after two years, we’ll surely look at raising equity at, I mean at a Dubai holding level. Secondly, your second question is not very clear to me, but what I get from you. I will repeat I will repeat it. It is — it is the value-added contribution, value-added product contribution to the overall revenue mix. How are the value-added component contribution will be in terms of the percentage when we did production in the segment also and again the expecting also going ahead, how will this shape up, right? So all these questions related earlier also, there were questions relating to this value addition and all that value-added products. I think we will take all of them offline and our teams will get back to team
Unidentified Participant
. Okay. And sir, do we have in our organization or that is not mandated.
Rajesh Bhatia
We don’t have. Okay. And sir, fourthly, sir, as you mentioned that it will be the call for the promoters, whether they will go for further expansion or how are they going to lower the debt that will be exercise then by that. So although sir, you are a professional the company and we are getting the right answers and the right guidance from you, but we would request the promoter or the promoter family member to also join and address the investor query in terms of these factors that are not allowing us to understand how this value-creation exercise or whether value could be created out of our assets because market will — is not valuing us correctly and there are good reasons for the same. So we request your good sir to also provide the input to the promoters and the Managing Director Mr, so that if he is addressing the investors are listening to us and giving us the right — his viewpoint, that would be — that would surprise a lot of queries going ahead because the promoter stake is also, I think, to below 50%. So we could ask the promoter or promoter family member of why they are not opting for keeping acquisitions when there is so much value available. So these questions are left unanswered since there are no presentation and only no participation from the promoter category. AJ would be the only platform for us. So this is a request from my side, sir, if that could be conveyed to the promoter family.
Saket Kapoor
Okay. That’s awesome. Thank you.
Operator
Thank you. The next question comes from the line of Aman from AK Securities. Please go-ahead.
Aman Sonthalia
Sir, any reason for the deep in chemical business?
Rajesh Bhatia
See chemicals to business, chemical is not dipped. Chemical has performed better chemical business profitability don’t — we don’t share those numbers separately for you, but I can tell you that chemical business profitability has been better in FY ’25 over FY ’24.
Aman Sonthalia
So are business, it’s a film business or it’s a value-added business like a non-commodity business. So do we foresee the each non-commodity business this we have assured of our profit and that will do much better compared to this commodity business into year 2025 and ’26, what even commodity business will do better as we are you know we will see the ramp-up in the overall capacity utilization industry-wide.
Rajesh Bhatia
So we’ve seen in the past that even the — even the business on the packaging films has delivered about 14% to 15% are not counting on the COVID years, but without the COVID years also, the Packaging films business has contributed 14% to 15% kind of for EBITDA margins. So I’m sure that we’ll have those days again in next couple of years’ time. So we — and today also, let’s accept the fact that business is a substantial part of our business. Today, our how much we we’ve shown you how much of our business is packaging films which is which so 77% of the business is, you know the packaging films business 77.7%. But I think the profit is I think not 77%. I think it is less than 77% and make us in non-film business, key profitability data. Non-film business, key profitability definitely better here. There is no doubt that better hair polographic key better hair, engineering key better hair, better hair, packaging films made, what I’m trying to say is ’24 was a very bad year for the industry. ’25 has been — has shown a lot of improvement in the packaging films business and ’26 will be better also.
Aman Sonthalia
Okay. And sir, one last question, in Mexico business your plant Lagar how much turnover we can expect from the business at full capacity and what will be the margin in that business?
Rajesh Bhatia
Which business you are talking about?
Aman Sonthalia
Packaging business is a pet food packaging business.
Rajesh Bhatia
Pet food packaging business may, we are looking at about 22% to 24% EBITDA margin
Aman Sonthalia
And turnover sir at full capacity
Rajesh Bhatia
Packaging films is 62.3%
Aman Sonthalia
And Mr since you want to plant like turnover fit capacity Mexico transa full capacity, they be $50 million that will be around INR450. Yes, sir. And sir, here next year may — it’s earlier, second-half major next year, the Jobi Hamari capacity, in recycling business in Mexico, in Egypt and in India may utilization level look now I think FY ’26 may show how many recycling. They recycling main buddy investment over a year, Abhi India, Noida May, of Satran, who a year. Usket, investment, who shortage plants has showcased more of a showcase. But definitely we expect that many TCR this may have old pet bottles like you say film and demand. So I think 26 May definitely we are looking at the all our initiatives on the recycling on the sustainability initiatives will do you know, sort of much better. Including the new investment what we are proposing in Noida. And sir, last question, Indian 1.2 billion, 12 billion. So just a biter my requirements are again the other sectors are again. Do you think that we will need further capacity in future in the business in India also.
Rajesh Bhatia
I don’t see India may or capacity could solve because Egypt plant Bhara Billy and to export from Bahan perspective India key capacity for us, we are for domestic market. We can play between the two. Okay. So. First year is the only complete right. So adjustment was half maybe export some product or domestic capacity will be domestic volumes will be shift yar headroom over that.
Aman Sonthalia
Okay, sir. Thanks so much.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
Rajesh Bhatia
Thank you, ladies and gentlemen. We appreciate your time, questions and continued support. The transcript of this call will be made available shortly on our website at who value this platform as a key opportunity to connect with our investors, stakeholders, and we look-forward to sharing further updates with you in the next quarter. Until then, stay safe and have a wonderful day. Thank you.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Dolat Capital Markets Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.