💰 Financial Performance

Revenue Growth by Segment

Consolidated sales grew 11.7% YoY to INR 2,895 Cr in FY25 from INR 2,592 Cr in FY24. Specialty film sales grew by 10% YoY, while the Specialty Chemical subsidiary recorded revenue of INR 187 Cr. The Pet Care (Zigly) and Rigid Packaging segments are in early growth phases, with Pet Care contributing less than 10% of total revenue.

Geographic Revenue Split

Exports accounted for 52% of total sales, amounting to INR 1,506 Cr in FY25. The company exports to over 80 countries, providing a hedge against domestic demand fluctuations and allowing for higher realization in specialty segments.

Profitability Margins

Net Profit (PAT) margin improved significantly from 2.39% in FY24 to 4.60% in FY25. Standalone EBITDA rose to INR 301 Cr from INR 213 Cr. The improvement is driven by a 10% growth in high-margin specialty films and cost rationalization efforts.

EBITDA Margin

Consolidated EBITDA margin stood at 10.7% in FY25, up from 9.7% in FY24. EBITDA increased 44% YoY to INR 362 Cr. CRISIL expects margins to expand to 13-14% in FY26 as new capacities ramp up and the product mix shifts further toward value-added films which command 2.5x the margin of commodity films.

Capital Expenditure

The company has invested INR 1,180 Cr over the last three years, including INR 502 Cr in FY25. A balance expansion capex of INR 275 Cr is planned for the BOPP plant across FY25 and FY26, funded through a 60:40 debt-to-equity ratio.

Credit Rating & Borrowing

The company maintains a strong credit profile with a policy of keeping a liquidity cushion of INR 383 Cr, equivalent to 1.5 years of debt obligations. Interest coverage improved to 3.6x in FY25 from 2.49x in FY24, despite increased debt for capex.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include Polypropylene (PP) and Polyester (PET) resins. While specific cost percentages per material are not disclosed, raw material volatility is a key risk as commodity film prices are highly sensitive to these input costs.

Import Sources

Not specifically disclosed in the provided documents, though the company notes susceptibility to global demand-supply dynamics and import pressures from international markets.

Capacity Expansion

Current capacities include BOPP (196,000 MT), Coated Specialty (36,000 MT), Metalised (40,000 MT), and CPP (30,000 MT). A new 81,200 MT BOPP line commenced in Q1 FY26 and is expected to reach full utilization by Q4 FY26. A 22,000 MT CPP line started in March 2025.

Raw Material Costs

Profitability is vulnerable to raw material price fluctuations. In Q2 FY26, BOPP gross margins dropped to INR 22/kg from INR 25/kg in Q1 FY26, and BOPET margins dropped to INR 6/kg from INR 12/kg due to cheaper imports and raw material shifts.

Manufacturing Efficiency

The new BOPP line is expected to achieve 66% (2/3rd) potential in Q2 FY26 and 100% by Q4 FY26. Manufacturing waste recycling has reached 95%, significantly improving material efficiency.

Logistics & Distribution

Distribution is global, covering 80+ countries. Logistics costs are impacted by USA tariffs, which the company could only partially pass on to customers in the September 2025 quarter.

📈 Strategic Growth

Expected Growth Rate

30-35%

Growth Strategy

Growth will be driven by the ramp-up of the 81,200 MT BOPP line and 22,000 MT CPP line. The company aims for 10% of consolidated revenue from Specialty Chemicals within 3-5 years with a 25% ROCE target. Strategy focuses on 'Specialty and Exports' to counter commodity oversupply, leveraging products that offer 2.5x commodity margins.

Products & Services

BOPP films (packaging, lamination, labeling), BOPET films, CPP films, Coated Specialty films, Metalised films, Specialty Chemicals, Pet care supplies, Rigid Packaging, and Window/PPF (Paint Protection Film).

Brand Portfolio

Cosmo First, Zigly (Pet Care), Cosmo Films.

New Products/Services

New launches include Window films and PPF (Paint Protection Film), which generated INR 4.5 Cr in a single quarter. Continued focus on innovative specialty chemical products to reach 10% revenue share.

Market Expansion

Expansion into the USA market via the material subsidiary Cosmo Films Inc. USA and increasing penetration in 80+ export countries. Target is to sell a majority of BOPP as specialty films (10% CAGR growth).

Market Share & Ranking

Not disclosed as a specific percentage, but the company is a leading manufacturer of BOPP films globally since 1981.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward sustainable packaging and ESG compliance. There is a temporary oversupply in commodity BOPP/BOPET due to massive capacity additions in FY22-23, leading to cyclical margin compression.

Competitive Landscape

Highly fragmented industry with players adding large capacities during price upticks, leading to cyclicality. Competitors include domestic and international BOPP/BOPET manufacturers.

Competitive Moat

Moat is built on a high share of specialty films (less cyclical), a strong liquidity policy (1.5 years debt cover), and 95% waste recycling. This sustainability is driven by R&D and a 52% export revenue base which diversifies market risk.

Macro Economic Sensitivity

Sensitive to global economic slowdowns; however, the flexible packaging sector is deemed 'essential,' minimizing impact. Global growth is projected to fall to 2.8% in 2025, which may affect short-term export demand.

Consumer Behavior

Shift toward sustainable and recyclable packaging is driving R&D into greenhouse gas emission reduction and plastic recycling compliance.

Geopolitical Risks

Higher USA tariffs and curtailed imports in India have directly impacted margins. Geopolitical developments causing a global slowdown are identified as strategic risks.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with safety, health, and environmental regulations regarding greenhouse gas emissions and plastic recycling. Adheres to ICAI criteria for internal financial controls.

Environmental Compliance

Achieved 40% reduction in carbon emissions. 45% of water is treated with a goal of zero liquid discharge. 95% of manufacturing waste is recycled.

Taxation Policy Impact

Not disclosed as a specific percentage, but the company complies with standard corporate tax requirements and monitors tax-related legal contingencies.

Legal Contingencies

The company has a whistleblower policy and a vigil mechanism. No specific pending court case values in INR were disclosed, but the company confirms no loans were given to firms where directors are interested.

⚠️ Risk Analysis

Key Uncertainties

Cyclicality of the commodity film business and demand-supply gaps are primary risks. A sustained increase in Debt to EBITDA above 3x would trigger a credit rating downgrade.

Geographic Concentration Risk

52% of revenue is from exports (INR 1,506 Cr), reducing dependency on the Indian domestic market but increasing exposure to global trade barriers and tariffs.

Third Party Dependencies

The company acknowledges susceptibility to IT vulnerabilities and advanced threats that could compromise sensitive data or disrupt the supply chain.

Technology Obsolescence Risk

The company mitigates this by staying ahead in new product development (e.g., PPF, specialty chemicals) and leveraging patent/trademark protections.

Credit & Counterparty Risk

Maintains a strong financial position with INR 383 Cr in liquid assets. Receivables turnover ratio showed no significant negative change (>25%) in FY25.