Concall AI

Cosmic CRF — Q2 FY26 earnings call

Call held 6 Nov 2025

Management summary

Cosmic CRF delivered strong H1 FY26 results, with consolidated revenue and EBITDA growing by 80% and 73% respectively, driven by increased sales volumes and improved operating cash flow. The company successfully navigated challenges like raw material price softening and supply chain issues, while also making significant progress on the Amzen acquisition, which is now expected to proceed. Capacity expansion across subsidiaries and a focus on diversified product offerings position the company for continued growth.

Highlights

Consolidated Revenue grew 80% YoY to INR 304.5 crores in H1 FY26, up from INR 169.4 crores in H1 FY25.
Consolidated EBITDA increased 73% YoY to INR 37.8 crores in H1 FY26, up from INR 21.9 crores in H1 FY25.
Adjusted PAT jumped nearly 100% YoY to INR 24.5 crores in H1 FY26, from INR 11.7 crores (INR 17.6 crores less INR 5.9 crores exceptional addition) in H1 FY25.
Standalone sales volume more than doubled to 47,200 metric tons in H1 FY26, compared to 22,500 metric tons in H1 FY25.
Operating cash flow improved significantly from INR 89 crores negative last year to INR 2 crores negative in six months, covering a journey of INR 87 crores.
EBITDA margin expanded from 9.48% to 15.5% and PAT margin from approximately 5% to 9% in H1 FY26.
The Amzen acquisition battle appears to be won, with Myotic withdrawing its interest, paving the way for the acquisition.

Concerns

Challenges in Q1 FY26 due to lack of wheel sets availability and extended monsoons, impacting EPC contractors and product distribution.
RDSO license changes and additional machine requirements caused initial delays in product development.
Softening raw material prices, with average selling prices dropping from INR 104,000-110,000 per tonne to INR 64,000-65,000 per metric tonne.

Key financials

01 Consolidated Revenue ₹304.5 Cr +80%YoY
02 Consolidated EBITDA ₹37.8 Cr +73%YoY
03 Consolidated PAT (Adjusted) ₹24.5 Cr +109%YoY
04 EBITDA Margin 15.5%
05 PAT Margin 9%
06 Operating Cash Flow ₹-2 Cr

What they filed

₹ Cr · quarterly

Line item	Q2 FY25	Q4 FY25	Q2 FY26	Q4 FY26
Revenue	169	232	304	412
Expenses	147	210	267	372
EBITDA	22	22	38	41
Margin	13%	10%	12%	10%
Other income	6	0	3	3
Interest	3	4	5	7
Depreciation	3	4	4	6
Profit before tax	22	15	31	31
Tax rate	21%	23%	21%	15%
Net profit	18	11	24	26
EPS	21.44	12.46	26.67	28.31

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Sales Volume

48,800 metric tons Total

CRF (Singur + Ancillaries) 23,800 metric tons 48.8%
N.S. Engineering 20,500 metric tons 42.0%
Cosmic Springs and Engineers 4,500 metric tons 9.2%

Order book

high confidence

Total value

₹615 Cr

as of 2025-09-30 quantified

18% YoY

Composition

Railway Tenders (Refurbishers & Direct) (other) ₹120 Cr

The consolidated order book has grown significantly year-on-year, including contributions from N.S. Engineering.

Source: Prepared remarks

Capital allocation

high confidence

Capex Capex disclosed
- Forging unit construction ₹40 Cr
A project size of INR40 crores is not small for a company like ours.
Debt Debt disclosed

I don't need working capital because I have almost made INR10 crores linked with the bankers. And the bankers keep crying that you don't take the limit. Why should I take the limit? I have done FD.
M&A Amzen Acquisition · Pending regulatory

Expected to be the biggest piece for the company, changing its perception and adding significant capacity.
Amzen is expected to add 82,000 metric tons of wagon manufacturing capacity and 25,000 metric tons from bridge girders.

Away from this, obviously, the favourite question that everybody has with Cosmic CRF, including me is Amzen. There is something that we've been talking about, it's an nemesis, it's been spoken about ever since -- I at times feel that because of this story, which was always obviously one of our favourite stories to be told and to be lived, and to be lived, this story has actually overtaken the entire performance of the Group at large.
M&A N.S. Engineering Projects Private Limited Acquisition · Integrated

To increase business at large, get into ancillarization and products around, leveraging family legacy in railway supplies.
Capacity increased from 17,000-18,000 MT to 25,000 MT, now up to 80,000 MT.

Cut to 2024-'25, we had N.S. Engineering Projects Private Limited that came into the picture, with that, full sheet piles came in.
Liquidity Cash ₹175 Cr The company has INR 175 crores from the Pref Issue and INR 200 crores in cash for CapEx, indicating strong internal liquidity.

Today, when we sit here, we still have that INR175 crores odd, because the money that we've spent separately on the various expansions is all supposed to be refunded into the Pref because of the loans that we will be getting in those assets as term loans, because we will be getting term loans. It's cheaper as a fund, and we will be getting our INR170 crore, INR180 crores back. Plus, the company is already carrying a good amount of cash reserves in terms of its working capital.

Guidance & targets

Volume

Total Sales Volume Volume · FY26 · High confidence 100,000-110,000 tons

So we are looking towards achieving 100,000, 110,000 tons by the end of this financial year.

— Aditya Vikram Birla

Cost

CRF Operational Cost per Metric Ton Cost · this year · High confidence INR 1,266

Previously INR 1,600 → INR 1,266

My cost today, which when I started making CRF used to be around INR6,000 per metric ton in its operational capacity, and INR6,000 per metric ton was my average cost. Cut to today, it's INR1,600. And I think this year, we should touch INR1,266 in totality per metric ton, which is a massive range.

— Aditya Vikram Birla

Margin

EBITDA Margin Margin · over a contract · Medium confidence 13-14%

But that works around at a quantum where I can get back home 13%, 14% of EBITDA and 9% to 10% of PAT.

— Aditya Vikram Birla
PAT Margin Margin · over a contract · Medium confidence 9-10%

— Aditya Vikram Birla

Capacity

Cosmic Springs & Engineers Capacity Capacity · in times to come · Medium confidence 20,000 metric tons

From 10,400 metric tons today

But I personally believe once we start working with it and the world shifts, we'll be able to cross 20,000 metric tons in times to come.

— Aditya Vikram Birla
Total Engineering Good Capacity Capacity · next 2-3 years · Medium confidence 3-3.5 lakh tons

if I have to answer this very categorically, we should look at 3, 3.5 lakh tons in the next two, three years, subject to all the companies coming in and all the executions.

— Aditya Vikram Birla

Wagon Industry

Annual Wagons Manufactured Wagon Industry · every year · Medium confidence 35,000-40,000 wagons

But I think this is going to be a standard out position where we'll have 35,000, 40,000 wagons being manufactured every year from this industry.

— Aditya Vikram Birla

Equity

Equity Dilution Equity · March 2028 · High confidence No dilution

Like I said in my last concall also, I will not be diluting irrespective of its requirement, because there will be no requirement. We are walking into these wars, knowing our outside that we will not be diluting till 2028 March.

— Aditya Vikram Birla

Operations

Forging Unit Commercial Run Operations · April or May · Medium confidence Commercial run starts

Along with that, the forging unit is in process of construction. I think we should be in a position to start our commercial run by April or May, subject to rainfalls, obviously.

— Aditya Vikram Birla
Spring Unit RDSO Licenses Operations · within 40-45 days · Medium confidence Licenses received

your spring unit is also completely ready, just awaiting its RDSO licenses to come in, which should happen any time within the next 40, 45 more days.

— Aditya Vikram Birla

What to watch in Q3 FY26

Amzen Acquisition Status

Next quarter (post-November 18, 2025)

Current Myotic has withdrawn, NCLAT hearing pending on Nov 18, 2025.

Target Favorable order, acquisition proceeds.

Why it matters

Amzen is expected to be a transformative asset, significantly expanding capacity and market presence for Cosmic CRF.

There's a hearing that's coming out on the 18th of this month. And we are very hopeful, fingers crossed, we've put in our best efforts and we should get through.

Risks & concerns

Amzen Acquisition Delays
medium

NCLT processes can take 4-5 years, potentially delaying the acquisition, though management is confident of a positive outcome soon.

Management acknowledged
Raw Material Price Volatility
medium

Steel prices have been softening, impacting selling prices, though the company has a strategy to maintain margins through cost efficiency.

Management acknowledged
External Factors Affecting Project Execution
low

Extended monsoons, cloudbursts, and site-specific conditions can cause delays in product delivery and capacity utilization for EPC contractors.

Management acknowledged
RDSO License Changes
low

Changes in STRs for RDSO licenses required additional machines and caused initial delays, but the company has adapted.

Management acknowledged

Q&A highlights

7 direct

Amzen Acquisition Funding and Certainty Direct

So, we raised, we were about to raise INR230 crores, if I'm not wrong. INR212 crores plus INR50 crores of warrant... Still have that INR175 crores odd... I will arrange that fund without loans in a position where we can set this off. ... I will not be diluting irrespective of its requirement, because there will be no requirement. We are walking into these wars, knowing our outside that we will not be diluting till 2028 March.

Addressed concerns about funding the Amzen acquisition and confirmed no equity dilution, providing financial clarity and confidence in the deal.

Asked by Hanu Rao

Amzen Acquisition Failure Contingency Plan Direct

Hypothetically, that doesn't happen, God forbid, right? And we don't get this. Then what happens is, we are walking into a space which is something which is open to the market. Like we have a land in our mind, where we've already placed some sort of money... So we bought all the strategic areas of that land block... Setting up new plant would take 2 years... Top lines and the bottom lines do not take a hit.

Provided a clear contingency plan for the Amzen acquisition, mitigating investor concerns about potential failure and demonstrating strategic foresight.

Asked by Prathmesh Dive

Capacity Expansion Funding without Equity Dilution Direct

We are carrying cash for CapEx. So we are carrying cash in our books. What will I do with this cash? I don't need the cash. This business is making literally INR40 crores, INR50 crores, INR60 crores an annum, right this year. So this year, by now, we've already made INR25 crores, INR30 crores if you add the depreciation back. So INR30 crores to INR35 crores of cash is made.

Clarified that CapEx for capacity expansion would be funded through internal accruals and existing cash reserves, reinforcing the commitment to no equity dilution.

Asked by Akash Jain

Rationale for Multiple Subsidiaries Direct

those companies are actually having different licenses. Now the first problem that we have to face is with say, for example, CRF and Springs being in the same business. So CRF is getting paid upfront, the credit amount that you give to your vendors... If you don't have a branding of that nature, you'd lose out on a lot of business unnecessarily... Cannot merge it... you have to give up all the licenses, all the pollution control books, everything, including BIS and all the licenses that you have and approvals for the products and the legacy that that company has.

Explained the strategic and regulatory reasons for maintaining separate subsidiaries, highlighting the complexities and disadvantages of consolidation, which is crucial for understanding the company's structure.

Asked by Vijay Sekhawat

Pricing Environment and Sustainable Margins Direct

If prices soften, PAT and EBITDA percentages will grow. Because my deployment of working capital will be lesser. And along with that, my interest costs will be lesser... Target 13-14% EBITDA, 9-10% PAT.

Provided management's strategy for maintaining and improving margins despite raw material price softening, by focusing on cost efficiency and fixed conversion rates.

Asked by Hemal Gohil

Total Addressable Market (TAM) for Spring Business and Margins Direct

Yes, TAM is not very huge. And that is the reason that it cannot be significant part of the top line in the future also... Raw material INR 18,600/ton... Total cost INR 21,000. Selling at INR 29,000. Approx 25% margin.

Clarified the niche nature and high profitability of the spring business, explaining its limited top-line contribution but strong bottom-line impact.

Asked by Akash Jain

Myotic's Withdrawal from Amzen Bid Direct

Myotic fought the battle for the longest time, but something changed in their heart. And I think they've done the right by us, by themselves, by God. They have submitted a affidavit in the court. And that has been mentioned in one of the orders that I think we put up in the BSE exchange also for all of you guys to read. Their affidavit reads, and I'm telling in precise, it reads that they are now not interested in the race anymore.

Confirmed the withdrawal of Myotic from the Amzen acquisition, signaling a clear path for Cosmic CRF to proceed with the acquisition.

Asked by Vansh Jain

3 min read 6 chapters

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.

This is an AI-generated summary of a publicly available earnings call transcript.

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