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Cosmo First — Q4 FY26 earnings call

Call held 21 May 2026

Management summary

Cosmo First delivered strong Q4 FY26 results, with significant revenue and EBITDA growth driven by new capacities and higher volumes. The company successfully reduced net debt and saw robust performance in its specialty chemicals and rigid packaging segments. While new consumer businesses are scaling, they are yet to achieve PBT profitability due to initial investments. Management remains focused on sweating existing CAPEX, improving ROCE, and expanding specialty film sales amidst volatile industry margins.

Highlights

Consolidated sales for Q4 FY26 increased by 37% YoY to ₹1,021 crores, primarily due to 41% higher volume.
EBITDA for Q4 FY26 surged by 53% YoY to ₹130 crores, driven by new capacities, higher specialty sales volume, and enhanced EBITDA from specialty chemicals.
Full year FY26 revenue increased by 26% and EBITDA by 32% to ₹479 crores, supported by 27% volume growth.
Net debt reduced by ₹75 crores in the last 6 months to ₹1,159 crores, with a target to bring it below 2x EBITDA within 12-18 months.
The Company expects double-digit topline growth in the film business next year due to enhanced capacity utilization and anticipates improved profitability from USA operations due to tariff reduction.

Concerns

PAT improvement was moderate due to increased depreciation and interest from new capacities, and a one-time impact of ₹5.3 crores reversal of deferred tax assets.
A one-time exceptional item of ₹7.2 crores was recorded related to a provision made by the Company's subsidiary in Netherlands.
Speciality gross margin slightly decreased from ₹65 per kg to ₹63 per kg in Q4, attributed to sales mix and a 1-3 month lag in price increases for speciality films.
New businesses (Cosmo Consumer, Plastech) are not yet PBT positive, with Cosmo Consumer expected to take a couple of years to be profitable due to aggressive brand building and marketing costs.

Key financials

01 Consolidated Sales ₹1,021 Cr +37%YoY
02 EBITDA ₹130 Cr +53%YoY
03 Full Year Revenue — +26%YoY
04 Full Year EBITDA ₹479 Cr +32%YoY
05 Exceptional Item ₹7.2 Cr
06 Deferred Tax Reversal Impact ₹5.3 Cr

What they filed

Q1 FY27: revenue up 41.0%, net profit up 0.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	723	679	687	751	873 +21%	820 +21%	911 +33%	1,059 +41%
Expenses	656	624	628	679	793	770	817	957
EBITDA	67	55	59	72	81 +21%	50 −9%	94 +59%	101 +40%
Margin	9%	8%	9%	10%	9%	6%	10%	10%
Other income	21	20	14	25	24	35	15	10
Interest	25	24	26	30	36	36	35	38
Depreciation	24	24	25	29	33	34	35	36
Profit before tax	39	27	23	38	36 −8%	15 −44%	40 +74%	38 +0%
Tax rate	17%	17%	27%	21%	18%	-12%	24%	22%
Net profit	33	22	17	30	29 −12%	17 −23%	30 +76%	30 +0%
EPS	12.40	8.55	6.44	11.36	11.22	6.55	11.42	11.29

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

Specialty Chemical
₹54 Cr Q4 Sales25% Q4 EBITDA Margin₹204 Cr FY26 Topline25% FY26 EBITDA Margin
Rigid Packaging (Cosmo Plastech)
70% Q4 Topline Growth YoYbreakeven status Q4 EBITDA Status
Consumer Business (Zigly)
54% Q4 Topline Growth YoY
Consumer Business (Cosmo Consumer)
₹38 Cr FY26 Exit Annualized Revenue₹23 Cr FY26 Full Year Revenue
BOPP Margin
₹20/kg Q4 FY26
BOPET Margin
₹18/kg Q4 FY26
Speciality Gross Margin
₹63/kg Q4 FY26₹65/kg Previous Quarter

Capital allocation

high confidence

Capex ₹100 Cr
- Sweating strategic CAPEX done in last 3 years ₹1,200 Cr
- Further investment in new businesses (specialty chemicals, Plastech and Cosmo Consumer) ₹50 Cr
CAPEX cycle of the Company is largely complete. Focus will be on sweating strategic CAPEX done in last 3 years (1,200 Cr.).
Debt Net ₹1,159 Cr · 2.4× EBITDA
- Repayment Reduced net debt by Rs 75 crores during last 6 months ₹75 Cr
The Company has reduced net debt by Rs 75 crores during last 6 months to Rs 1,159 cr. (2.4 times to EBITDA and 0.7 times to equity)
Dividend ₹4/share (final)

The Board of Directors had recommended dividend of Rs. 4 per equity share for FY25-26 subject to approval of shareholders.

Guidance & targets

Volume

Speciality Sales Volume Growth Volume · ongoing · High confidence 10% CAGR

Higher speciality sales volume (which is growing at about 10% CAGR)

— Management

Profitability

Plastech EBITDA Profitability · FY27 · High confidence high single-digit

You see, in FY27, Plastech business should start making high single-digit EBITDA

— Management
Plastech EBITDA Profitability · FY28 · High confidence high or mid-teens

while in FY28, we expect it to be high or mid-teens EBITDA numbers.

— Management

Revenue

Cosmo Consumer Revenue Revenue · earliest · Medium confidence INR 100 crores

First thing is to reach INR 100 crores benchmark at the earliest.

— Management
Cosmo Consumer CAGR Revenue · minimum · High confidence 50%

So, we are confident of the 50% CAGR itself in Cosmo Consumer as a minimum.

— Management
US Business Growth Revenue · minimum · High confidence 15-20%

We should see anywhere between 15 to 20% growth as a minimum in US business.

— Management

Debt

Net Debt to EBITDA Ratio Debt · within next 12 to 18 months · High confidence below 2x

Previously 2.4x → below 2x

And we will bring it below within next 12 to 18 months.

— Management

ROCE

ROCE ROCE · next year · High confidence 14-15%

Previously 11% → 14-15%

For FY26, it is 11%, and next year we expect it to be around 14% to 15% in the coming years

— Management

Employee Costs

Employee Costs Growth Employee Costs · FY27 onwards · Medium confidence not grow too much from Q4 run rate

So, we should not grow these costs too much from Quarter 4 run rate.

— Management

Margin

Cosmo Consumer Gross Margins Margin · normalized · High confidence 35-40%

Cosmo Consumer business will have gross margins of anywhere between 35%-40%.

— Management

Market context

Film Business Topline Growth Revenue · next year · High confidence double-digit

The Company expects double-digit topline growth next year mainly due to enhanced utilization of BOPP and CPP capacity added in FY25-26.

— Management

What to watch in Q1 FY27

Net Debt to EBITDA Ratio

within next 12 to 18 months

Current 2.4x

Target below 2x

Why it matters

Tracking debt reduction is crucial for financial resilience and improving balance sheet health.

Our new businesses (specialty chemicals, Plastech and Cosmo Consumer) are scaling and will lead to incremental ROCE. ... There is clear roadmap to reduce net debt over next 2 years. In this direction, the Company has reduced net debt by Rs 75 crores during last 6 months to Rs 1,159 cr. (2.4 times to EBITDA and 0.7 times to equity)

Risks & concerns

Volatile BOPET and BOPP margins
medium

Industry margins for BOPET and BOPP may remain volatile due to new capacity coming in, though demand-supply is balanced macro-level.

Management acknowledged
New businesses not PBT positive
medium

Cosmo Consumer and Plastech are not yet PBT positive due to marketing costs and early stage of operations.

Management acknowledged
Overall market uncertainty and volatility
medium

The world has become so uncertain and volatile that it is very difficult to predict even for tomorrow.

Management acknowledged
Uncertainty from West Asia war
low

Company has done well to manage the uncertainty caused by West Asia war.

Management managed
Lag in Speciality film price increases
low

Speciality gross margin drop due to sales mix and 1-3 month lag in price increases.

Management acknowledged

Q&A highlights

7 direct

Industry Outlook for BOPET/BOPP Margins Partial

Industry margins for BOPET and BOPP may remain volatile in the current year as new capacity comes. Although we see a macro-level demand supply balance. What we control is mix and cost. Speciality Films are 60% of our films and are growing, which insulates blended margins.

Analyst sought clarity on margin trends and industry outlook, which management addressed by highlighting volatility, demand-supply dynamics, and the insulating effect of specialty films.

Asked by Harshit Khadka

Zigly Value Unlock Plans Direct

First step is to have this in a separate subsidiary within this financial year. We are exploring whether it is the right time for getting some external capital to fund future growth for this business.

Reveals management's strategic intent for Zigly, including potential spin-off and external funding, indicating future growth and value creation plans.

Asked by Harshit Khadka

Increase in Employee Costs Direct

So, we should not grow these costs too much from Quarter 4 run rate. These costs went up because we were scaling up all our businesses. Even Film business had a close to 40-50% volume growth potential because of the new capacities we put up.

Analyst questioned a significant increase in employee expenses, and management explained it as a necessary investment for scaling new businesses and capacities, with an expectation for costs to stabilize.

Asked by Jatin Damania

Cosmo Consumer Business Growth and Margins Direct

See, right now, in the first year, we closed at INR 23 crores. Right now, we should have very significant growth because we are getting these products approved in various countries. And we have to take different certifications as we move along different countries.

Management provided insights into the early stage of Cosmo Consumer, its current revenue, and the strategy for future growth through international expansion and product approvals.

Asked by Jatin Damania

BOPP Demand-Supply Situation and SRF CAPEX Direct

I think in the next three years, there are seven to eight lines coming in India, which is, I would say, more or less, balanced with the demand growth that is expected. There could be some oversupply of core films for a short period, depending on the commissioning timeline for new lines, and I think seeing that SRF may have decided to delay their CAPEX or defer their CAPEX at this stage.

Analyst inquired about the competitive landscape and capacity additions in BOPP, and management offered a balanced view of demand-supply and potential impact of competitor CAPEX decisions.

Asked by Aman Sonthalia

Speciality Gross Margin Decline in Q4 Direct

That was a very marginal drop. Actually per kg margin, you will notice, it is a function of sales mix as well. As you said so, some of the customers, particularly Speciality customers, generally we are able to take the price reset at the end of either month or the quarter. So, that is why there will be some lag in taking some price increases.

Analyst sought clarification on a slight dip in specialty gross margins, and management attributed it to sales mix and the inherent lag in implementing price increases for specialty products.

Asked by Saransh Gupta

Capital Invested in New Businesses and Future ROCE Direct

So, just to try and answer, in the three businesses that you asked, our capital invested is close to INR 275 crores to INR 300 crores. We, I mean, the investment, the further investment in these three businesses are not expected to be huge. All put together should be in the range of INR 50 crores to INR 75 crores in the next year and a year thereafter.

Analyst probed into the capital deployed in new ventures and future investment plans, providing investors with a clear picture of capital allocation for growth segments.

Asked by Gaurav

US Tariff Refund Process and Quantum Direct

Yes, the courts have opened the process for the refund. We are right now studying that process and going to file the refund soon. It is expected that this refund process may take anywhere between 6 months to 12 months. ... See, the refund will be more than INR 60 crores.

Analyst inquired about a potential significant financial inflow from a US tariff refund, and management confirmed the process is underway, providing an estimated timeline and amount, which could impact future financials.

Asked by Rajkumar Vidyanathan

3 min read 5 chapters

Detailed narrative

Q4 and Full Year FY26 Financial Performance

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.

Film Business Outlook and Margins

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.

Performance of New Business Verticals

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.

Capital Allocation and Debt Management

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.

Strategic Focus and Future Growth Drivers

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.

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

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