Cosmo Films hits new high on strong earnings, rallies 69% in three months

During FY21, Cosmo Film's PAT more than doubled (up 110 per cent up from FY20) on the back of higher speciality sales, better operating margins, and an uptick in performance by subsidiaries

Shares of Cosmo Films rallied 7 per cent to hit a new high of Rs 1,047 on the BSE in intra-day trade on Thursday, in an otherwise range-bound market, taking its gains to 18 per cent in the past two days.

In the last three months, the stock of the company, engaged in the containers and packaging business has outperformed the market by zooming 69 per cent as compared to a 5 per cent rise in the S&P BSE Sensex. In the past one year, the scrip has soared 235 per cent compared to a 48 per cent rally in the benchmark index.

During the financial year 2020-21 (FY21), Cosmo Film’s profit after tax (PAT) more than doubled (up 110 per cent from FY20) on the back of higher speciality sales, better operating margins and an uptick in performance by subsidiaries. The specialty films sales have grown year-on-year (YoY) in the last three years and the growth rate in FY21 surpassed 20 per cent despite the base becoming larger with each passing year.

The company has successfully completed the development of several textile chemical products, each with specific USPs. These are currently under trials with textile manufacturers and processors. The commercial launch would follow in H1FY22. Pet care pilot launch will start in Q2 FY22 under the brand name “Zigly” and will provide a unique value proposition to Pet Parents across different channels.

Last month, Cosmo Specialty Chemicals, a subsidiary of Cosmo Films forayed into the Fast Moving Consumer Goods (FMCG) industry with the launch of Fabritizer, an after-wash laundry sanitiser for germ-free clothing.

“The company has been able to maintain steady operating performance during the pandemic-driven national lockdown due to healthy demand for packaging and value-added films, resulting in the sustenance of revenues at Rs 2,285 crore in fiscal 2021. The proportion of specialty films in overall revenue has increased to 62 per cent in fiscal 2021 from 47 per cent in fiscal 2019 and should improve further over the next two fiscals. Expected capacity expansion, diversification into specialty chemicals and other segments along with healthy demand for BOPP films should result in revenue growth of 8-10 per cent per fiscal in the medium term,” the credit rating agency CRISIL said in a report while assigning 'CRISIL AA-/Stable and CRISIL A1+’ ratings to the bank facilities of the company.