Cosmo First withstands margin pressure, outperforms industry

Profit in Q4, however, falls over Q3

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Cosmo
Pankaj Poddar, Group chief executive officer, Cosmo First Courtesy- Cosmo First

Cosmo First Limited, a global name in specialty films and an emerging player in specialty chemicals, on 29 May declared its financial results for the quarter that ended March 2023.

During the quarter, commodity film margins in both BOPP and BOPET suffered a decline, severely impairing the profitability of the industry. Cosmo, with over two-thirds of its revenue coming from specialty films, however, could withstand the margin pressure and outperformed the industry once again, the company said in a release.

The net revenue for Q4 of FY 2023 stood at Rs 715 crore as against Rs 730 crore in Q3. Profit after tax was Rs 32 crore in Q4 compared to Rs 46 crore in Q3. Net revenue in FY 2023 was Rs 3,065 crore and profit after tax was Rs 244 crore.

The company expects the position to improve in the coming months, bringing an end to the QoQ (quarter on quarter) declining phase, happening for the last three quarters. The company says it will continue to build its specialty products portfolio and maintain its lead over the other industry players.

The company’s pet care vertical continues to grow rapidly and clocked a monthly run rate revenue (GMV) of Rs 2 crore from its 15 experience centers and increasing online presence through its website and mobile app. An acquisition opportunity in the online pet care space is in the final stages and is expected to be closed soon. This would further accelerate the growth of the pet care vertical.

The specialty chemical subsidiary is set to launch newer adhesives, which together with healthy growth in the masterbatch vertical would enable the subsidiary to have further growth in FY 23-24.

The company’s balance sheet remains strong with substantial cash reserve and net debt to EBITDA of about one time.

The Board of directors had recommended a dividend of Rs 5 per equity share for the financial year FY 22-23 subject to the approval of shareholders in the annual general meeting. This coupled with the 1:2 bonus in June 2022 and share buyback with tax-free handsome gain over the market price in February 2023 affirms the company’s commitment to provide regular returns and share prosperity with the shareholders.

Commenting on the company’s performance Pankaj Poddar, Group CEO, Cosmo First, said, “The company has launched many new specialty films including shrink for packaging and non-packaging applications. Several other specialty films for non-packaging applications are in the pipeline and should hit the market in coming quarters. All these would further strengthen the company’s position in the specialty films business.”

Founded in 1981 by Ashok Jaipuria, Cosmo First has a presence across 100+ countries around the globe. Cosmo First is a global leader in specialty films and an emerging player in specialty chemicals – masterbatches, adhesive and coating chemicals — along with a digital-first omnichannel pet care business under the brand name ‘Zigly’.

 

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