Cosmo First at Drupa, even as Capex of Rs 350-cr planned

Cosmo First declared its financial results for the quarter and financial year ended 31 March 2024. The highlights include consolidated sales which increased by 3%.; and EBITDA which has improved to Rs 67-crore. 

What is interesting is the expansion plans. The Q1 FY25 BOPP margins are steady. This is based on improved specialty BOPP sales. The highlight is a capex of Rs 300-350 crores is being planned. The improvement in EBIDTA has been made possible with higher specialty sales as well as an improvement in domestic BOPP film margins (effective March 2024). The industry margins for BOPET film (about 8% of the company’s FY24 sales) remained in the negative zone. For BOPET film, Cosmo First is focussed on profitable specialty films / shrink films to achieve EBIDTA breakeven. 

The Q1, FY25 outlook for BOPP margins remains steady at March 2024 month level. Further, the Company is expecting improved sales of specialty BOPP films as well as a reduction in costs.

During an investor call, four things stood out. "Specialty chemicals EBITDA improvement; packaging growth projects progressing; rigid packaging sales at Rs 15 crores and BOPP spreads improving."

Pankaj Poddar, the group CEO of Cosmo First, said "The company’s focus remains on its specialty business. It shall be further strengthened with the launch of a high-value-added sun control film, Cosmo Sunshield, in FY25."

Speciality film shares are expected to notch up 68-70%., while the BOPP situation is improving; polyester challenges continue. As an industry expert said, "The overcapacity in the packaging films business will continue for some more time. There will be consolidation globally. In this scenario, India's situation is uncertain." Established in 1981, Cosmo First Limited is a four-decade-old global business conglomerate with entities– Cosmo Films, Cosmo Speciality Chemicals, Zigly and Cosmo Foundation. Cosmo Films claims to be one of the most preferred global brands offering value-added BOPP films for packaging, labels, lamination, and industrial applications.