Detailed Narrative
FY25 Financial Performance and Volume Growth
Cosmic CRF reported a consolidated revenue of INR 401 crores for FY25, marking a significant 58.9% year-on-year growth from INR 253 crores in FY24. Consolidated Profit After Tax (PAT) surged by 141.6% to INR 30.8 crores from INR 12.75 crores. This robust performance was primarily driven by a substantial 131.3% increase in sales volume, reaching 55,941 metric tons in FY25 compared to 24,000 metric tons in the previous year.
Revenue Guidance Miss and ASP Impact
Despite strong volume expansion, the company's FY25 consolidated revenue of INR 401 crores fell short of its earlier guidance of INR 500 crores. This miss was largely attributed to a significant 20-22% drop in the average selling price (ASP), from INR 102,880 per metric ton in FY24 to INR 78,850 per metric ton in FY25. The decline was exacerbated by a strategic shift in raw material mix, with mild steel now accounting for approximately 70% of the blend, up from 20% previously.
Strategic Acquisitions and Capacity Expansion Initiatives
The company successfully integrated NS Engineering, which contributed INR 101 crores to the top line and INR 11.5 crores to PAT in its first year of operation, achieving 15,500 metric tons of volume. The Singur plant's production capacity increased from 32,000 to 45,000 metric tons. Additionally, Cosmic Springs & Engineers, a new subsidiary, commenced operations with a capacity of 14,400 sets of springs, and a new forging unit with a 7,200 metric tons per annum capacity is under development, projected to generate INR 150 crores turnover with 15-20% PAT by FY26/FY27.
Amzen Transportation Acquisition Update
Cosmic CRF is in the final stages of acquiring Amzen Transportation Industries Private Limited, a target estimated to be twice the size of the current company. The final resolution plan is being filed, and management expressed high confidence in securing the asset. The total cost for the Amzen bid, including refurbishment and Dedicated Freight Corridor (DFCC) costs, is estimated at INR 330 crores. Integration is expected to take 6-8 months, with no financial contribution from Amzen anticipated in the current fiscal year.
Working Capital and Cash Flow Dynamics
The company experienced negative operating cash flow (OCF) in FY25, primarily due to significant raw material purchases for the newly acquired NS Engineering and Cosmic Springs, which are currently funded by Cosmic CRF. Debtor days were stretched to INR 69-70 crores, exceeding the target of INR 50 crores, as some wagon builders delayed payments for 4-5 months. Management views these as temporary challenges associated with aggressive growth and strategic investments.
Industry Headwinds: Wagon Wheelset Shortage
The wagon building industry is currently facing a severe shortage of wheelsets from RFW, which has drastically reduced wagon turnaround from a normal 3,400-3,600 wagons per month to just 950-970 wagons per month. This issue, which began in November-December, has impacted execution and working capital across the sector. Management expects this temporary problem to be resolved within the next 1-1.5 months.
Future Outlook and Promoter Commitment
Cosmic CRF maintains an ambitious long-term vision, targeting a total turnover of INR 2,800-3,000 crores with the full integration of Amzen. The company plans to execute INR 250 crores from its current INR 550 crore order book in the next two quarters, with new railway orders expected between September and December. The promoter reaffirmed a strong commitment by pledging no further equity dilutions until March 2028, aiming to fund future expansion through internal accruals and manageable debt.