Cosmo First publishes September quarter results

Cosmo First (formerly Cosmo Films) has declared its financial results for the quarter ended September 2023.

Improved Q2, FY24 EBITDA is underpinned by enhanced BOPP film margins primarily due to festive season demand pick, partial revival of export demand and range bound movement in raw material prices. The company continues to outperform the industry at large on the back of speciality films.

The near to medium term BOPP and BOPET margins are expected to remain subdued, more so for BOPET films due to an industry-wide supply overhang (58 percent capacity increase over December 21 capacity in BOPET vs. 23 percent in BOPP and an incremental 17 percent more by March 26 in BOPET vs. 40 percent more in BOPP). The company is working towards BOPET margin improvement over the next few quarters on the strength of shrink films and many other specialty films already launched.

With an objective to rationalize cost, Cosmo First is in process of shifting extrusion coating plant from South Korea to India and has carried out operational restructuring in South Korea in Q2, FY24. Consequently, the consolidated results are affected by one-time restructuring costs of INR 3 crores.

Under new initiatives, the company has launched its rigid packaging business under the brand name ‘Cosmo Plastech’, which will manufacture thin wall containers and sheets for a wide array of FMCG products particularly for food industry. The company has also started metallization of capacitor film which shall serve the rapidly growing electronics industry in India.

Cosmo First’s petcare vertical (Zigly) continued to grow rapidly and clocked a monthly revenue (GMV) run rate of about INR 4 crores (USD 4.8 million) on the back of expanding retail footprints with 19 stores as of September end and increased online presence. The company will now look for consolidation in H2, FY24 before initiating next round of growth in FY 25.

The speciality chemical subsidiary has got good initial response with its packaging and lamination adhesives and will scale up the same in a phased manner from H2, FY24. Many of these new business initiatives post higher capacity utilization in the next 3-4 quarters will drive growth.

Commenting on Cosmo First’s performance, Pankaj Poddar, group CEO of the company, said: ‘In short term, the company will remain focussed on increasing specialty sales. In the medium term, multiple drivers including speciality BOPET films, sun shield film, rigid packaging and specialty chemicals will result in profitability enhancement / margin stabilisation. Zigly will take 2-3 years to turn profitable and will be a wealth creator for the stakeholders. Pet adoption is expected to grow multi fold over the coming years with smaller families and rise of disposable incomes.’