1. Buy or Sell at your own risk
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss Amount/(Buy Price-Initial Stop Loss Price)
4. Sell on initial stop loss hit or daily RSI closing below 40
5. Some other ways to sell stocks can be
a. 25% or 50% up in three weeks or less
b. Weekly tailing tops with high volume
c. Exhaustion gaps
d. Heavy daily volume without further upside
e. Largest one day price drop
After a consolidation since October 2021,
UFLEX
has given a breakout today. Buy with a stop just below Rs.620.
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss Amount/(Buy Price-Initial Stop Loss Price)
4. Sell on initial stop loss hit or daily RSI closing below 40
5. Some other ways to sell stocks can be
a. 25% or 50% up in three weeks or less
b. Weekly tailing tops with high volume
c. Exhaustion gaps
d. Heavy daily volume without further upside
e. Largest one day price drop
After a consolidation since October 2021,
UFLEX
has given a breakout today. Buy with a stop just below Rs.620.
Comment:
credit rating update from CRISIL says, "The Russia-Ukraine conflict is not expected to impact operations at the Uflex group’s Russian subsidiary , 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."
1. Uflex Ltd is a leading Indian multinational company which is engaged in the manufacturing and sale of flexible packaging products & offers a complete flexible packaging solution to its customers across the globe.
2. In addition to the plants in India, the company has manufacturing units at eight other locations, including the US, Egypt, Mexico, the UAE, Hungary, Nigeria, Poland and Russia. The company sells its products to more than 140 countries in the world, and this widespread geographic reach helps the company lower its dependence on some particular geography.
3. The company has several patents in its name, including the one granted in the US for the BOPET film being used for blister packs for 20 years. This helps the company remain above its peers in terms of growth and margins.
4. in 9MFY22, the standalone operating income improved by 18.20% to ~Rs 4009.37 Crs in 9MFY22 from Rs 3391.81 Crs in 9MFY21 due to improved volume and price growth. At a consolidated level, the company’s scale of operations also improved, as indicated by an improvement in the total operating income to Rs 8890.76 Crs in FY21 as compared to Rs 7404.84 Crs in FY 20 at a growth rate of ~20.06% due to an improvement in volume sold by 22%, offset by a contraction in prices by 2%. The improvement in the scale of operations at the consolidated level is due to the completion of capex in foreign/overseas subsidiaries in FY21 and FY22. The PAT at the consolidated level improved to Rs 843.68 Crs in FY21, compared with Rs 370.87 Crs in FY20. Furthermore, in 9MFY22, the consolidated operating income improved by 46.37% to Rs 9260.731 Crs in 9MFY 22 from Rs 6326.84 Crs in 9MFY21 due to improved volume growth resulting from increased capacity in global operations. The PAT improved by 29.51% in 9MFY22 to Rs 748.84 Crs from Rs 578.19 Crs in 9MFY21.
5. On a consolidated basis, the company had a tangible net worth (TNW) of Rs. 5515.05 Crs as on 31 March 2021, which has led to the leverage levels being maintained within a comfortable range. The company’s total debt (TD)/TNW and total outside liabilities (TOL)/TNW stood at 0.73 times and 1.14 times, respectively, as on 31 March 2021 as against 0.77 x and 1.14 x as on 31 March 2020. The TOL/TNW stood at comfortable levels as it stood at 1.12 x in 9MFY22 as against 1.14 x in 9MFY21. The net debt /EBITDA stood at 1.68 x in 6MFY22 as against 1.70 x in 6MFY21.
6. To pace growth, Uflex in FY20, proposed to add four more locations, namely Nigeria, Hungary, Russia and Poland, for the production of packaging films globally. Of the planned capex of ~Rs 1800 Crs, 100% cost has been incurred till September 2021; thus, there is no time and cost overrun as per the initial timelines, and the completion of capex was done in a timely manner. The manufacturing plants in Russia and Poland commenced commercial production by Q2FY21. In Hungary, operations commenced by Q4FY21. In Nigeria, the commencement was by Q2FY22. This has and will help increase the company’s scale of operations over the medium term. The company does not have fresh capex plans in all these countries until FY23. Capacity utilisation stood at 95% until December 2021 in all overseas operations in Hungary, Russia and Poland and Egypt, and in Nigeria, it stood at around 60%. The improvement in the capacity utilisation in Nigeria is expected to lead to an increase in the scale of operations further in FY23.
7. Stock is trading at 0.78 times its book value.
8. Company has delivered good profit growth of 21.94% CAGR over last 5 years.
9. Quarterly sales growth was it 65% and quarterly profit growth was at 96% in December quarter.
10. Debt to equity at 0.68 (less than 1 is good), Interest Coverage at 5.44 (greater than 3 is good), Current ratio at 1.56 (greater than 1.5 is good).