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Business Standard
23-05-2025
- Business
- Business Standard
Smallcap packaging stock zooms 44% in 2 days on strong Q4 results
Cosmo First share price today Shares of Cosmo First soared 20 per cent to ₹953.50 on the BSE in Friday's intra-day trade, extending its Thursday's rally, backed by heavy volumes. In the past two days, the stock price of this smallcap packaging company has zoomed 44 per cent after the company reported strong earnings for the quarter ended March 2025 (Q4FY25). In the past two weeks, the stock has skyrocketed 71 per cent from its May 9, 2025 intra-day level of ₹558 on the BSE. It had hit a 52-week high of ₹1,084.10 on December 18, 2024. At 02:56 PM; Cosmo First was quoting 17 per cent higher at ₹933.10, as compared to 0.85 per cent rise in the BSE Sensex. The average trading volumes at the counter jumped nearly 10-fold. A combined 2.67 million equity shares representing 10.2 per cent of total equity of Cosmo First changed hands on the NSE and BSE. Strong Q4 results For Q4FY25, the company reported a 80 per cent year-on-year (Y-o-Y) jump in PAT at ₹27 crore. Earnings before interest, taxes, depreciation and amortisation (Ebitda) was up 26.9 per cent at ₹85 crore, backed by higher speciality sales and better BOPP & BOPET film margins. The company said Ebitda would have been better but for a one-time non-recurring cost of ₹4.3 crore for thermal line shifting from Korea to India (bringing in 10 crore annual efficiencies) and a 10 per cent lower volume of BOPET film due to a planned shutdown. The company further said it invested ₹1,180 crore in the last 3 years (including ₹502 crore in the last year) in multiple growth projects including BOPP, Cast Polypropylene Line (CPP) & Polyester lines, Metallizers, Coating lines, Window / PPF films, Zigly and Rigid Packaging) and these will yield a significant ramp up in revenue as well as profitability in the next 2 to 3 years. Management commentary The company's focus will be taking full leverage of the new investments, growing specialty film sales, expanding in international geographies and pushing down costs. The new film lines are the most cost-efficient and should make Cosmo more competitive in the market. Specialty Chemicals is already earning healthy ROCE. In Zigly, we are expecting profitable growth in services (including Vet and Grooming). Our focus shall continue to be on expanding services particularly Vet care services as well as launch Private labels to improve margins on Product Sales. CPP with an annual capacity of 22k Mt started operations from March 2025 while Sunshield films from May 2025. The company has successfully done pilot runs with 50+ distributors, who are going to distribute both Sunshield films and Paint Protection films. The BOPP line having an annual capacity of 81k Mt p.a. is also expected to start operations from Q1FY26. Cosmo First is a global leader in specialty films and an emerging player in specialty chemicals (Masterbatches, Adhesive & Coating chemicals), Rigid Packaging (Cosmo Plastech) along with the first digital Omni channel Pet care business under the brand name 'Zigly'.
Yahoo
22-05-2025
- Business
- Yahoo
Cosmo First Ltd (BOM:508814) Q4 2025 Earnings Call Highlights: Strong Sales Growth and ...
Release Date: May 21, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cosmo First Ltd (BOM:508814) reported a 16% increase in consolidated sales for the March 2025 quarter compared to the same period last year, driven by higher specialty sales and improved BOPP margins. The company's full-year profit after tax (PAT) increased by 115% compared to the previous year, indicating strong financial performance. Cosmo First Ltd has successfully started operations of its new CPP line and Sunshield Film, which are expected to contribute significantly to revenue growth. The company is focusing on expanding its specialty film sales, which have been growing at a 10% CAGR over the last six years. Cosmo First Ltd has invested significantly in CapEx over the past three years, which is expected to yield substantial revenue and profitability growth in the next 2-3 years. The company incurred a one-time cost of 4.3 crore INR for shifting a thermal line from Korea to India, impacting quarterly results. There was a planned maintenance shutdown that resulted in a 10% lower volume on one of the production lines. The company's net debt stands at 967 crore INR, which is 2.7 times EBITDA, indicating a significant debt burden. The promoters sold a 4% stake in the company, which has negatively impacted market sentiment. The pet care vertical, Zigly, is not yet profitable, and the company faces challenges with low product margins due to supplier pricing. Warning! GuruFocus has detected 4 Warning Signs with BOM:508814. Q: How do you see FY26 panning out for specialty BOPP volumes? A: We are optimistic about better growth rates in FY26 for specialty sales, with several products in the pipeline. (Group CFO) Q: Will there be a need for further investment in specialty BOPP given the new commodity line coming online? A: Yes, initially the new capacity may skew towards commodity, but it will gradually shift to specialty, aligning with our strategy to grow specialty film capacity. (Group CFO) Q: How do commodity BOPP margins affect specialty and semi-specialty margins? A: Specialty margins remain stable, while semi-specialty margins change with commodity margins but not linearly. A change in commodity margins doesn't directly translate to the same change in semi-specialty margins. (Group CFO) Q: What is the expected revenue ramp-up for sun control films in FY26 and FY27? A: We expect domestic sales to reach 15-20 crore next year, with exports contributing more significantly in FY27. Overall, we anticipate closing between 25-30 crore next year and exceeding 50 crore the year after. (Group CEO) Q: What is the outlook for BOPP and BOPT margins and supply side scenarios? A: Polyester margins could improve due to limited capacity additions globally. However, BOPP may face temporary pressure due to new lines in India, but our focus on specialty sales should mitigate this impact. (Group CEO) Q: How does the management view the current capital allocation and future CapEx plans? A: Recent CapEx is yet to fully mature, but we expect significant growth in revenue and profitability as new capacities come online. We plan to add specialty capacity this year with a CapEx of around 200 crore, primarily funded through internal accruals. (Group CFO) Q: What is the expected break-even point for the new BOPP line? A: At 90% utilization, the new BOPP line should generate significant gross margins, with fixed costs expected to be manageable, contributing positively to the bottom line once fully operational. (Group CFO) Q: Can you provide more details on the Cosmo Consumer vertical? A: Cosmo Consumer will focus on products like window films and paint protection films. The investment is largely complete, with future focus on brand building and marketing. (Group CEO) For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
