During the quarter, BOPP and BOPET industries faced excess supply caused due to bunching of new production lines on the one hand, and demand disruptions in overseas markets on the other. The contribution margin dropped below sustainable levels and impacted everyone in the industry. The company mitigated the impact on the back of its strong presence in the speciality films segment. The performance could have been better but for one-time inventory loss in raw materials and finished goods (both in India and subsidiaries); planned maintenance of some of the production lines; the restricted flow of orders for speciality films due to the festive and holiday season in Europe and the USA and larger funding of operating deficit in the rapidly growing petcare vertical.

The BOPET line which was commissioned towards the end of last quarter continued to focus on perfecting recipes, processes, and quality parameters for various speciality and value-added films in line with the company’s entry strategy in polyester films.

The company’s petcare vertical is rapidly expanding and clocked a monthly run rate of Rs 1-crore in sales revenue from its 11 experience centres in various locations and increasing online presence through its website and mobile app.

The company’s financials remain strong with annualised ROCE and ROE at 20% and 25% respectively and net debt to EBITDA of less than one time.

In December 2022, the company announced the buyback of its shares from all the shareholders via the tender route with an outlay of Rs 108-crore. The offer period ended on 9 February 2023 and the shareholders should receive payment by 20 February 2023 as scheduled.

Pankaj Poddar, Group CEO, Cosmo First, said, “The near-term outlook for BOPP and polyester films is expected to be challenging though the company’s strong speciality films portfolio should deliver superior returns. Zigly is rapidly becoming well-known among pet parents, benefiting all pet lovers and the company’s shareholders. Speciality chemicals division should double its net revenues while actively focusing on new product launches.”