Detailed Narrative
Strong H1 FY26 Performance
Cosmic CRF reported robust H1 FY26 results, with consolidated revenue surging by approximately 80% YoY to INR 304.5 crores, up from INR 169.4 crores in H1 FY25. Consolidated EBITDA also saw a significant increase of 73% YoY, reaching INR 37.8 crores compared to INR 21.9 crores in the prior year. Adjusted PAT nearly doubled to INR 24.5 crores from INR 11.7 crores, reflecting strong operational efficiency and an EBITDA margin expansion from 9.48% to 15.5%.
Operational Challenges and Resilience
The company faced challenges in Q1 FY26, including a lack of wheel sets availability and extended monsoons, which impacted EPC contractors and product distribution. Despite these headwinds and changes in RDSO license requirements, Cosmic CRF demonstrated resilience, overperforming in Q2 and achieving a standalone sales volume of 47,200 metric tons in H1 FY26, more than double the 22,500 metric tons in H1 FY25. The company also significantly improved its operating cash flow, reducing the negative balance by INR 87 crores to INR 2 crores negative.
Capacity Expansion and Diversification
Cosmic CRF has significantly expanded its standalone production capacity from 36,000 metric tons to 55,000 metric tons this year. Including its subsidiaries, N.S. Engineering Projects Private Limited (now at 80,000 MT capacity) and Cosmic Springs and Engineers (10,400 MT, aiming for 20,000 MT), the total installed capacity stands at 145,000 metric tons. The company is diversifying its product portfolio to 4,500 SKUs, including heavy fabrication, sheet piles, and various poles, beyond its initial CRF offerings, with a forging unit expected to commence commercial operations by April/May.
Amzen Acquisition Progress
The management expressed high confidence in acquiring Amzen, with a crucial NCLAT hearing scheduled for November 18, 2025. Myotic, a previous contender, has withdrawn its interest, leaving Cosmic CRF as the likely successful bidder. The company has secured land for a contingency plan if the acquisition faces unforeseen issues, but believes Amzen will be a transformative asset, adding an estimated 82,000 metric tons of wagon manufacturing capacity and 25,000 metric tons from bridge girders.
Financial Strategy and Cost Efficiency
Despite softening raw material prices (from INR 104,000-110,000 to INR 64,000-65,000 per MT), Cosmic CRF has improved its EBITDA margin from 9.48% to 15.5% and PAT margin from 5% to 9%. This was achieved through economies of scale and significant cost reduction, with CRF operational cost dropping from INR 6,000 to INR 1,600 per metric ton (targeting INR 1,266). The company maintains a strong liquidity position, carrying INR 175-200 crores in cash and aims for 13-14% EBITDA and 9-10% PAT margins, with no equity dilution planned until March 2028.
Subsidiary Strategy and Future Outlook
The company maintains separate subsidiaries (N.S. Engineering, Cosmic Springs) due to distinct licensing, credit cycles, and branding requirements, avoiding complexities of merging NCLT-acquired assets. Management aims to achieve 100,000-110,000 tons in sales volume by the end of FY26 and projects total engineering good capacity to reach 3-3.5 lakh tons in the next 2-3 years, driven by the vast and fungible opportunities in the Indian railway and infrastructure sectors, with an expected annual manufacturing of 35,000-40,000 wagons in the industry.