Cosmo First

Cosmo First reported strong financial results for Q4 FY26, with consolidated sales reaching ₹1,021 crores, a 37% increase year-over-year, primarily driven by a 41% higher volume. EBITDA for the quarter grew by 53% to ₹130 crores, up from ₹85 crores in March 2025Q. For the full fiscal year 2026, the company posted a 26% increase in revenue and a 32% increase in EBITDA, totaling ₹479 crores, supported by a 27% volume increase post-commissioning of new BOPP and CPP lines. PAT improvement was moderate due to increased depreciation and interest from new capacities and a one-time^📎 reversal of deferred tax assets of ₹5.3 crores, alongside an exceptional item^📎 of ₹7.2 crores.

The company anticipates double-digit topline growth in its film business for the next year, driven by enhanced utilization of BOPP and CPP capacities added in FY25-26. BOPP margins were ₹20 per kg in Q4, while BOPET margins stood at ₹18 per kg. Management noted that industry margins for BOPET and BOPP might remain volatile due to new capacity additions, but the company's focus on specialty films (60% of film business, growing at 10% CAGR) helps insulate blended margins. The recently announced reduction in USA tariffs is expected to improve profitability from USA operations starting next year.

The Specialty Chemical subsidiary continued its strong traction, achieving sales of ₹54 crores with over 25% EBITDA in Q4 FY26, and a full-year topline of ₹204 crores with similar EBITDA margins. The Rigid Packaging vertical (Cosmo Plastech) posted over 70% topline growth YoY in Q4 and reached EBITDA-breakeven, with a focus on higher profitability in FY27. Consumer businesses, including Zigly (Petcare) and Cosmo Consumer, are scaling up, with Zigly posting 54% topline growth in Q4 FY26. Cosmo Consumer reached an annualized revenue run rate of ₹38 crores by the end of FY26, but these new businesses are not yet PBT positive due to initial brand-building and marketing costs.

The company's CAPEX cycle is largely complete, with a focus now on sweating the ₹1,200 crores strategic CAPEX deployed over the last three years. CAPEX for the next year is projected to be less than ₹100 crores. Net debt was reduced by ₹75 crores in the last six months, bringing it to ₹1,159 crores, representing 2.4 times EBITDA. Management aims to further reduce net debt below 2 times EBITDA within the next 12 to 18 months. The Board recommended a dividend of ₹4 per equity share for FY25-26, subject to shareholder approval.

Cosmo First's strategy revolves around intrinsic value growth for each business, with a strong emphasis on increasing specialty film sales and expanding new business verticals. The company is actively building distribution networks in domestic and international markets for Cosmo Consumer, with plans to scale up in America and Europe. Management expects ROCE to improve from 11% in FY26 to 14-15% next year, continuing to rise with increased capacity utilization and growth in new businesses. The potential US tariff refund, estimated at over ₹60 crores, is expected to positively impact both the bottom line and cash flow within 6-12 months.