Buy UFLEX; target of Rs 528: KR Choksey

Global flexible packaging industry is growing at 5 - 5.5% annually and is expected to grow at least at the same rate in future. The Indian Flexible Packaging Industry is growing at 15-17% annually as shift in focus to Asian suppliers due to competitive advantage of Asian countries V/s Western countries on account of better quality, large product portfolio, prompt service and quicker deliveries. With expanding middle class and rising income levels, consumption patterns are set to changing substantially. Greater consumption of branded products is giving unique identity to packaging both in terms of product quality and presentation. We believe that Uflex’s business is on a firm ground and is set to go up given the compelling fundamentals the stock warrants a re-rating. We believe that the re-rating will pan out as the market takes cognizance of the growth triggers. Uflex’s stock quoting at a CMP of INR 233. Strong growth prospects of the packaging industry. Foray into aseptic packaging which is the next level of growth, strong revenue visibility given its marquee clients concrete steps being taken to improve the overall profitability. We have valued the company using the PE multiple basis. We have assigned a multiple of 8x at a FY 19 EPS of INR. 66 to arrive at a target price of INR 528. (March 2018).For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.