Cosmo Films registers PAT of Rs 47 crore in Q1

Rs 15 crore investment in Pet Care business over 18 months

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Cosmo
Cosmo Films 100% subsidiary is poised to start specialty masterbatches production in Q2’21 and chemicals in Q4’21. Photo - Cosmo

Cosmo Films, a global leader in films for packaging, labeling, lamination, and synthetic paper, declared its financial results for the quarter ended June 2020. The company posted an EBITDA of Rs 93 crore (approximately US $ 12.5 million) during Q1 FY21 on the back of higher specialty sales (up by 20%) and improved operating margins. According to Cosmo, pent-up demand from the previous quarter and supplies opening up in a phased manner led to a favorable demand-supply scenario and improved margins. Covid-19 pandemic had a marginal impact during the quarter. The company expects that Covid-19 impact may remain only marginal in the following quarters too barring unforeseen conditions.

Established in 1981, Cosmo Films is a global leader in specialty films for packaging, lamination, labeling, and synthetic paper. With the engineering of innovative products and sustainability solutions, Cosmo Films has been partnering with the worlds’ leading F&B, personal care, and tobacco brands and packaging and printing converters to enhance their consumer experience. Cosmo’s film offerings include BOPP and CPP films. Today, the company is one of the largest exporters of BOPP films from India. Its customer base is spread in more than 100 countries with manufacturing units in India, Korea & Japan.

Commenting on the performance of the company Pankaj Poddar, chief executive officer, Cosmo Films, said, “The company shall continue to invest in R&D and grow its specialty film portfolio thereby improving margins. The company is also investing in several new initiatives including Artificial Intelligence (AI), data mining, cloud computing among others which should help to achieve automated paperless processes, lower the operating costs and offer superior service to the customers and other stakeholders. The company’s 100% subsidiary is poised to start specialty masterbatches production in Q2’21 and chemicals in Q4’21.”

According to the press release, as a part of its sustainability drive, Cosmo has taken a target to be water-positive at all its plant locations, increase in-house consumption of process waste (continuously being reduced), and improve air quality planting thousands of fruit-bearing trees. It takes several other measures on the sustainability front to help customers & society at large and reduce costs.

Cosmo’s net debt now stands below two times of the EBIDTA, and investment in new capacities is being evaluated further to strengthen the company’s share of specialty films, Poddar said.

Entering Pet Care business

Speaking of Cosmo’s entry into Pet Care business, Poddar said, “Cosmo is going ahead with the pilot launch in NCR investing about Rs 15 crores over next 18 months to ascertain the viability of the Pet Care business to launch it at a larger scale.”

“The overall investment is expected to remain marginal vis-à-vis size of the existing business. Pet care business has been growing in India at 22% CAGR. With smaller families, rising income levels and limited social lives (especially post Covid), pet adoption has increased and expected to grow many folds. The business scenario is highly fragmented and there are no organized players in India offering end to end comprehensive solution to the customers. Cosmo expects to fill up this void. Pet care is a low capex business while brand building will require some investments in the initial years,” Poddar added. The company believes that the business will deliver high returns, high valuation, and add significant value to shareholders.

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