UFlex Ltd - a packed opportunity?


(anand) #1

Disclosures

  1. Do not own any shares, just added to my watchlist
  2. I’m a retail investor with no professional qualification in analysing stocks.

Company
Established about 30 years ago by first generation enterpreuners.
UFlex Ltd. is engaged in manufacturing, supplying and exporting plastics and plastic films.
The company manufactures polyester chips, plastic films, coated film, laminates, pouches, holographic films gravure cylinders, inks and adhesives to all types of packaging and printing machines.
UFlex operates its business through the following divisions: Film, Engineering, Holography, Converting, Cylinder and Chemical

Key Statistics

Why am I interested?
I found this company on screener.in when I was screening for undervalued companies based on PE and a few other metrics.
Screener Link: http://www.screener.in/company/UFLEX

Low PE is the ONLY reason I’m interested in this stock. Its PE is below 7 and also well below its comparable peers, and so I see it as an opportunity for some good medium term gains. Invite views from others. Thanks


(mehrotras) #2

Hi Anand,
The reason for Uflex’s low proce is due to past conviction of its CMD…Ashok Chaturvedi…see extract beow

Chaturvedi and Neera Yadav, the former chief secretary of Uttar Pradesh were on Tuesday sentenced to four year in prison by a CBI court in a 1994-95 Noida land scam case. Following the judgment, the company’s shares crashed 20% on the Bombay Stock Exchange. In a communication to BSE, Uflex stressed that the judgment had no financial implication for the company. Chaturvedi, it said, had been found guilty in his ‘‘individual capacity’’ in a case relating to allotment of land for the company’s employees. Uflex added that the land was not used by the company and that Chaturvedi was taking ‘‘appropriate legal steps’’ in the matter.

Known to be a charmer in Delhi’s power circles, Chaturvedi is no stranger to controversy. In 2001, he was arrested by the CBI under the Prevention of Corruption Act for allegedly bribing a top excise department official. Former cabinet secretary Prabhat Kumar was forced to resign as Jharkhand Governor after reports that Chaturvedi had paid for his private parties appeared in the media.


Aseptic Packaging (like TetraPak)
(anand) #3

Thankyou for the information. I was suspecting that their debt could have been the reason, but this info clears things up.
To other readers who may be curious with regards to the date of conviction, it is actually December 2010.


#4

On Feb 18, 2014, IT raids were conducted and bogus sale documents worth 100 crores were found:

http://articles.economictimes.indiatimes.com/2014-02-19/news/47490212_1_rs-100-crore-37-premises-cash-worth


(Girish) #5

Do not invest in this company. The promoter is convicted criminal. I invested years ago and within 3 months news came that he is going to jail. I lost 35% money in days. I sold at loss and came out. The CMD is Chor. Do not partner with him.


(anand) #6

Thanks guys. Staying clear of this company for now. Anyone in the management with political nexus is a no for me.


(Chandra) #7

UFLEX LIMITED 361.70 +6.19 %, stock hitting life time high last few days.
Stock in in up-move last few moths.
Stock looks cheap with low CMP /BV and P/E ratio. Cash flow also looks good.
Disclosure :Holding UFLEX : 6 % of my Portfolio.


(Tarak) #8

I have put in some money in this stock recently; Now that I know that the promoter is mired in some black deals, I would not hike my holdings but would slowly and gradually reduce my holdings…


(manan1379) #9

What black deals are you referring to ? can you pls post some links


(Tarak) #10

l got to know this in this forum only.I meant past conviction of it’s MD


(KODURI APPA RAO) #11

https://www.slideshare.net/secret/reaAVbzg5LIPl6?curator=alphaideas&utm_source=alphaideas
A review worth noting.


(spvk1) #12


Uflex new packaging material video. Impressive.


(Jiten Parmar) #13

I presented Uflex Ltd at a recent TIA meet. It’s not a stock recommendation.

Presentation on my blog.

https://jitenp69.blogspot.in/


(Jiten Parmar) #14

I think we should change the subject name. Uflex is a long term opportunity.


(pla7yer) #15

I have been holding this share for close to 18 months now.Have been a steady grower
One of the most under valued stocks
Their R & D wing is excellent.Comes up with lot of innovative ideas in flexible packaging solutions
Their topline is 6360 crores against market cap of 3570 crores
Their sadand plant will be operational soon
One of my long term bets
They have moved on so much from Chaturvedi case
Fair value must be much higher than current price trades at PE of 21!!


#16

Results for December quarter have not been that good.
For the same topline, profits have declined significantly.

OPM down and increasing interest costs.

Is this is a one-time thing ?


(khushi) #17

Ram Material cost has gone up by around 10% and at the same time the sales have gone up by around 9% so there is slight increase in raw material costs, not that significant.

The finance cost has gone up from Rs. 30 Cr in previous quarter to Rs. 43.3 Crores approx - a straight increase of Rs. 13 Crores.

Depreciation has increased from Rs. 52 Crores to Rs. 58 Crores.

May be company is carrying out some expansion plan.

Not that bad a result…if we keep finance cost and depreciation expenses aside.

I would have been scared if there would have been significant fall in reveres or drastic increase in raw material prices.

Disc : Not yet invested, but looking to enter soon.


(khushi) #18

This correction is good entry for people who have missed out earlier.

Stock had corrected similarly in august 2017, just to bounce back and hit fresh 52 week high.

Disc : Not yet invested, but looking to enter soon.


(spvk1) #19

Plastic ban in maharashtra . Is it favourable for uflex.


(Jiten Parmar) #20

It doesn’t seem to be in flexible laminates.More on PP bags, plastic tableware, straws, etc.