CRISIL has upgraded the long-term rating of Uflex to ‘CRISIL AA- I Stable' from 'CRISIL A+ I Stable'. It has also upgraded the short- term rating to ‘CRISIL A 1+' from 'CRISIL A 1 '.

Offering the rating rationale, CRISIL stated that the rating upgrade is on account of higher-than-anticipated improvement in the business risk profile and the financial risk profiles of Uflex.

The improvement in the business risk profile is reflected in increase in revenue to Rs 9,247 crore as on December 31, 2021, and likely to exceed Rs 12,000 crore for the full fiscal, reflecting year-on-year growth of more than 35%.

The financial risk profile of the Uflex group is strong, as reflected in total outside liabilities to tangible networth (TOLTNW) ratio of 1.13 times as on 31 March 2021, compared with 1.14 times as on 31 March 2020.

The financial risk profile remained comfortable despite significant increase in debt availed for funding the capex undertaken by the group in fiscals 2020 and 2021. Debt protection metrics were comfortable. The financial risk profile is expected to remain stable over the medium term.

The Russia-Ukraine conflict is not expected to impact operations at the Uflex group's Russian subsidiary [Flex Films RUS LLC, Russia], as the entity contributes 3% to the consolidated revenue of the group, and all raw material purchases and sales are from and in Russia only. Hence, no impact is expected because of deprecation of the ruble over other currencies.

The ratings continue to reflect the company's established presence in the flexible packaging industry, diversified customer and product profiles and a comfortable financial risk profile.

The Uflex Group offers end-to-end flexible packaging solutions, including films (BOPET, BOPP, CPP [cast polypropylene] and metallised), flexible laminates, holographic films, aseptic liquid packaging, packaging and printing machines and inks and adhesives, catering mainly to the FMCG industry. It has manufacturing facilities in India, Dubai, Mexico, Russia, Egypt, Poland, Hungary, Nigeria and the US.

The company's consolidated net profit rose 95.85% to Rs 313.21 crore on 63.46% rise in net sales to Rs 3387.76 crore in Q3 December 2021 over Q3 December 2020.