Cosmo First

Cosmo First reported consolidated sales of ₹746 crores for Q4 FY25, marking a 16% increase from the March 2024 quarter, driven by higher specialty sales and improved BOPP margins. The company's EBITDA for the quarter stood at ₹85 crores, up from ₹67 crores in the prior year, despite a ₹4.3 crore one-time^📎 cost and a 10% volume reduction in BOPET due to planned maintenance. For the full fiscal year FY25, consolidated EBITDA grew 44% to ₹362 crores, with PAT increasing by 115% to ₹133 crores, primarily attributed to a 10% growth in specialty sales and ₹25 crores in cost rationalization.

The company has invested approximately ₹1180 crores in capex over the last three years across various growth projects, including BOPP, CPP, polyester, metallizer, coating lines, Sunshield, Paint Protection Film, and rigid packaging. The new 22,000 metric ton CPP line commenced operations in March 2025, and the Sunshield film began commercial production in May 2025. A new BOPP line with an 81,000 metric ton capacity is expected to be operational by Q1 FY26, which management states is one of the lowest cost production lines available. An additional ₹200+ crores in capex is planned for FY26, largely funded by internal accruals, focusing on specialty and value-added lines.

Cosmo First's strategy emphasizes specialty film sales, which have grown at a 10% CAGR over the past six years, with a similar growth rate in FY25. The company's specialty film portfolio currently represents 71% of its total film sales, split broadly 50:50 between semi-specialty and specialty. Management noted that specialty film margins are largely protected from commodity price fluctuations, with semi-specialty margins showing a lower delta to commodity changes. While BOPET margins are expected to improve due to limited new capacity, BOPP margins might experience a temporary blip^📎 in the short term due to several new lines coming up in India.

The company is expanding its new business verticals. The Specialty Chemical subsidiary achieved a top line of ₹180 crores in FY25 with high-teens EBITDA. The new Cosmo Consumer vertical, encompassing Sunshield and Paint Protection Film, is projected to generate ₹25-30 crores in FY26 and exceed ₹50 crores by FY27, with a break-even sales target of ₹35 crores. The pet care vertical, Zigly, currently operates 32 stores and has a monthly GMV of ₹5 crores, with sales split 60% products and 40% services. Zigly is focusing on private labels and services to improve profitability, as product margins remain a challenge.

As of March 31, 2025, Cosmo First's net debt stood at ₹967 crores, resulting in a net debt to EBITDA ratio of 2.7x and a debt to equity ratio of 0.7 times. The Board of Directors has recommended a dividend of ₹4 per equity share for FY24-25, subject to shareholder approval. Management acknowledged that the current ROCE is subdued and below the cost of capital, primarily because the debt associated with recent large-scale capex is already on the books, while the full returns from these maturing assets are yet to be realized.

Cosmo First anticipates FY26 sales to be in the range of ₹3500-4000 crores, with potential to reach ₹5000 crores with full utilization of all assets. The company expects specialty sales growth to be even better in FY26 than the 10% achieved in FY25. The new BOPP line is projected to generate a monthly gross margin of ₹7.5 crores at 90% utilization. The company plans to demerge its pet care business within the next three to four years, once it achieves decent scale and significantly reduces losses. The focus remains on leveraging new investments, expanding international geographies, and further cost rationalization.