The FY19 net revenue increased by 22% on YOY basis due to increase in sales volume (9%) and pass through of increase in raw material prices (13%).

The domestic film margins continued to decline until November. Besides, there was an adverse impact from one-time inventory revaluation loss of Rs 9-crore due to sudden sharp fall in raw material prices towards December-end. The results were also impacted by hedging cost/ forex losses of Rs 4.5-crore (against Rs 3.4-crore gain in corresponding quarter).

Despite the adverse factors, the company maintained its EBITDA from increase in export margins, tax incentives on new investment and one-time gain of Rs 8-crore from sale of land and building in US subsidiary following the de-commissioning of plant.

Tax expense for the quarter ended 31 December 2018 is net of deferred tax credit of Rs 3.7-crore with respect to temporary differences pursuant to filing of income tax return for AY 2018-19.

Pankaj Poddar, CEO, Cosmo Films, said, “The demand and supply situation has started to get better with demand growth outpacing supply and the price recovery may start happening in the foreseeable future. The company has also stabilised its sales from additional capacity and therefore can better focus on improving prices and sales mix.”

Poddar also added that the US thermal film plant has been relocated to India. “Shifting to India shall help the company optimise cost and help improve capacity utilisation. The thermal film for sales in USA shall henceforth be entirely supplied from India.”