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    Cosmo First

    COSMOFIRST
    Capital Goods·12 Feb 2026
    Management Summary

    Cosmo First reported strong top-line and EBITDA growth in Q3 FY26, driven by new capacities and improved specialty mix. However, profitability was tempered by BOPP margin pressure, one-time costs, and higher depreciation. The company is focused on sweating its recent capex, reducing net debt, and scaling new high-margin businesses, with an expectation of improved profitability from USA operations starting Q1 FY27.

    Highlights

    5

    • Consolidated sales of ₹899 crores, up 28% YoY, driven by 29% higher volume due to new capacities.

    • EBITDA increased 19% YoY to ₹103 crores, supported by higher sales volume, better specialty mix, and improved specialty chemical subsidiary performance.

    • Net debt reduced by ₹20 crores during the quarter to ₹1,215 crores, with a clear roadmap for further reduction of ₹200-250 crores annually.

    • Rigid Packaging business (Cosmo Plastech) reached EBITDA breakeven in December 2025 and achieved close to 70% capacity utilization.

    • BOPET film gross margins improved significantly to ₹12 per kg in Q3 FY26 from ₹6 per kg in Q2 FY26, primarily due to reduced imports.

    Concerns

    4

    • BOPP core film margins declined to ₹13 per kg in Q3 FY26 from ₹22 per kg in Q2 FY26 due to increased imports and USA tariffs.

    • EBITDA was adversely impacted by ₹19 crores from non-repetitive items, including a ₹8.4 crores inventory loss and a ₹4 crores one-time gratuity liability.

    • Volume loss of approximately 6% (₹4 crores impact) occurred due to a BOPP line shutdown, though it was rectified towards quarter-end.

    • PAT growth was muted due to increased depreciation and interest expenses related to recently commissioned new capacities.

    Key financials

    Single quarter

    05 metrics
    1. 01Consolidated Sales₹899 Cr+28.0%YoY
    2. 02EBITDA₹103 Cr+19%YoY
    3. 03BOPP Film Gross Margin13 Rs/kg
    4. 04BOPET Film Gross Margin12 Rs/kg
    5. 05Net Debt₹1,215 Cr

    Segment breakdown

    Specialty Chemical
    ₹52 Cr Sales25% EBITDA Margin
    Rigid Packaging (Cosmo Plastech)
    70% Capacity UtilizationBreakeven status EBITDA Status
    Consumer (Zigly)
    50% Topline Growth
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Net ₹1,215 crores · 2.8x EBITDA

    Cost 6.5%

    M&A

    Filmax (Korea)

    joint venture · signed

    Guidance & targets

    9
    CategoryTargetPriority
    Debt
    Net Debt Reduction
    ₹200-250 crores each year
    		High
    Capacity Utilization
    New BOPP Line Utilization
    100%
    		High
    Capacity Utilization
    CPP Line Full Potential
    Full potential
    		Medium
    Product Mix
    Specialty as % of Total Sales Volume
    70%
    		Medium
    Profitability
    USA Operations Profitability
    Improved profitability
    		High
    Profitability
    USA Margin Improvement (Full Year)
    ₹50 crores
    		High
    New Business
    Window Films Business Break-even Sales
    ₹80-85 crores
    		Medium
    Corporate Action
    Zigly Demerger
    Demerged
    		High
    Sustainability
    Renewables Gains
    More gains
    		Medium

    New BOPP Line Utilization

    from March onwards
    Current70% in Q3, 80% in January
    Target100% output

    Why it matters

    Achieving full utilization of the new BOPP line is crucial for revenue growth and sweating recent capex.

    We have reached now close to 80% of the potential and we expect that from March onwards, we should be able to get 100% out of this line.

    How to verify

    key_financials.segment_breakdown[name='BOPP'].metrics[label='Capacity Utilization']

    Risks & concerns

    4
    RiskSeverity

    BOPP core film margin pressure

    Margins declined due to increased imports in India and high USA tariffs, with a full-year impact of ₹50 crores expected. — Management acknowledged

    high

    One-time financial impacts

    Q3 EBITDA was adversely impacted by ₹19 crores from non-repetitive inventory loss (₹8.4 crores) and one-time employee benefit gratuity liability (₹4 crores). — Management acknowledged

    medium

    Muted PAT growth

    PAT was impacted by increased depreciation and interest expenses related to new capacities, offsetting operational improvements. — Management acknowledged

    medium

    Industry overcapacity in BOPP/BOPET

    Concerns raised by analysts about industry overcapacity, though management expressed confidence in full utilization for BOPP/BOPET. — Analyst acknowledged

    medium

    Q&A highlights

    7

    “It is near to full impact. So, as we said, depending on the math between Rs.4 crores to Rs.5 crores is the net impact because of the USA tariff. Out of this, Rs. 6 crores impact was already made in the Quarter 2 results. So, there is additional impact of close to Rs.8 crores. It is very difficult to, to exactly quantify, but we expect it to be close to Rs. 8 crores. Yes, see, on a full year basis, it was expected to give an Rs.50 crores impact on our P&L.”

    Quantified the specific financial impact of USA tariffs on current quarter and full year, which was a key adverse factor for EBITDA.

    asked by Neerav Jimudia

    2 min read5 chapters

    Detailed Narrative

    01

    Q3 FY26 Financial Performance Overview

    Cosmo First reported consolidated sales of ₹899 crores for Q3 FY26, marking a 28% year-on-year increase, primarily driven by a 29% higher sales volume from new capacities. EBITDA grew 19% to ₹103 crores, benefiting from increased sales volume, a richer specialty product mix, and improved performance of the specialty chemical subsidiary. However, the quarter's profitability was impacted by approximately ₹19 crores from non-repetitive items, including a ₹8.4 crores inventory loss and a ₹4 crores one-time📎 gratuity liability, alongside a 6% volume loss due to a BOPP line shutdown.

    02

    Margin Dynamics in Film Business

    Gross margins in the BOPP film segment declined to ₹13 per kg in Q3 FY26, a significant drop from ₹22 per kg in Q2 FY26 and ₹21 per kg in Q3 FY25. This pressure was attributed to increased imports in India and high USA tariffs, which management expects to have a full-year impact of ₹50 crores on the P&L. Conversely, BOPET film gross margins saw a substantial improvement, rising to ₹12 per kg in Q3 FY26 from ₹6 per kg in Q2 FY26, largely due to a reduction in imports, particularly from China.

    03

    Strategic Focus on Capacity Utilization and Debt Reduction

    With the capex cycle largely complete, Cosmo First's immediate focus is on maximizing the utilization of its recently added strategic capex, amounting to over ₹1,100 crores. The new BOPP line, which operated at 70% capacity in Q3, is expected to reach 100% utilization from March onwards. The company also outlined a clear roadmap to reduce its net debt of ₹1,215 crores by ₹200-250 crores annually over the next 2-3 years, aiming to strengthen its financial resilience.

    04

    Performance of New and Specialty Businesses

    The Specialty Chemical subsidiary continued its strong traction, posting sales of ₹52 crores with a 25% EBITDA margin in Q3 FY26, and has three new products awaiting commercialization. The Rigid Packaging vertical (Cosmo Plastech) achieved EBITDA breakeven in December 2025, operating at nearly 70% capacity. In the consumer segment, Zigly (Petcare) reported over 50% topline growth year-on-year in Q3 FY26, focusing on high-margin services and house brands. The Window Films business is projected to break even at ₹80-85 crores in sales, with an estimated ₹15 crores in marketing costs next year.

    05

    Outlook and Geographic Expansion

    The company anticipates double-digit revenue growth in coming quarters, driven by enhanced capacity utilization. Profitability from USA operations is expected to improve starting Q1 FY27 following tariff reductions. Cosmo First is also actively pursuing growth in new geographies, including a joint venture with Filmax in Korea, and sees positive prospects from India's FTAs with America and Europe. The demerger of Zigly is still planned for FY27, aiming to unlock further value.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.