Stock of this soft ferrites company has zoomed over 3500% in FY22

Cosmo Ferrites hit a new high of Rs 635, up 4% on the BSE on Thursday's. The stock has zoomed 3,529% in FY22 from a level of Rs 17.50 on March 31, 2021.

Shares of Cosmo Ferrites hit a new high of Rs 635, on gaining 4 per cent on the BSE in Thursday’s intra-day trade. The stock has zoomed over 3,500 per cent during financial year 2021-22 (FY22) on the back of robust earnings and strong outlook.

The company is a leading manufacturer and exporter of soft ferrites and an emerging player in wire wound magnetic components. In FY22, the market price of Cosmo Ferrites zoomed 3,529 per cent from a level of Rs 17.50 on March 31, 2021. In comparison, the S&P BSE Sensex rose 19 per cent during the fiscal.

During the October-December quarter (Q3FY22), the company reported net revenue growth of 82 per cent year-on-year (YoY) on the back of higher volumes, higher sales realisation and sale of more value added products resulting from customized solutions.

Strong domestic and export demand, better sales realisation and continuously improving internal efficiencies contributed to improvement in EBITDA (earnings before interest, taxes, depreciation, and amortization), which was up 260 per cent YoY. Ebitda margins expanded to 26.4 per cent from 13.34 per cent in a year ago quarter.

"There is strong domestic and export demand and we continue to develop new customers and new applications for the company’s products. We are fairly bullish on the overall demand in view of Government’s efforts to push Electronics manufacturing within the country and the huge potential in the export market," the management had said. 

It added that the company’s expansion plans to increase Soft Ferrites manufacturing capacity from 2400 MT per annum to 3600 MT per annum is on track and is expected to be operational in Q2 of FY 23 and would further drive revenue growth next year.

Meanwhile, CRISIL Ratings on Monday, March 28, 2022, upgraded its ratings on the bank facilities of Cosmo Ferrites to ‘CRISIL BB/Positive/CRISIL A4+’ from ‘CRISIL B-/Stable/CRISIL A4’.

The upgrade reflects the turnaround in the operating performance of the company as seen in the increased scale of operations and margins. The same is expected to improve the business risk profile and consequently the financial risk profile. The ‘Positive’ outlook factors CRISIL Ratings’ expectation that the sharp recovery in revenue and operating margin should sustain and further improve the business risk profile, CRISIL said in a rating rationale. CLICK HERE FOR FULL REPORT