Cosmo First Ltd (NSE: COSMOFIRST) Q3 2026 Earnings Call dated Feb. 12, 2026
Corporate Participants:
Neeraj Jain — Chief Financial Officer
Pankaj Poddar — Chief Executive Officer
Analysts:
Unidentified Participant
Nirav Jimudia — Analyst
Vipul Kumar Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the investor call of Cosmos First Limited to discuss the Q3 and 9 month FY26 results. Today we have from the Management Group CEO Mr. Pankaj Podar and Group CFO Mr. Neeraj Jain. Starting off with the statutory declaration, certain statements in the conference call may be forward looking. These statements are based on the management’s current expectations and are subject to uncertainties and changes in the circumstances. These statements are not guarantees of future results. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded now. May I request Mr. Neeraj Chain to take us through his opening remarks subsequent to which we can open the floor for the Q and A. Thank you and over to you Mr. Neeraji.
Neeraj Jain — Chief Financial Officer
Well, thank you. Very good afternoon ladies and gentlemen and thank you for joining Cosmos December 2025 results conference call. Our financial results for the December 25 quarter and investors presentation both are available on company’s website. Hope you could go through the same. Well, we’ll begin this call with a brief opening remarks from the management side which may be followed by the questions. Let me begin the call providing a holistic level perspective and then we will discuss the financial results for the quarter. The CapEx cycle of the company is largely complete now. The focus will be on setting the strategic Capex turn in recent years almost close to 1,100 crore rupees.
Focus will be on utilization of full capacity and continue to grow the specialty business. There is a very clear roadmap to reduce the net debt over the next two to three years has no major capex is planned during this period. Our new businesses are scaling. This will lead to incremental return on capital employed such as specialty chemicals and Cosmo consumer. And of course the clean focus is going to be on intrinsic value growth for each of the business in the coming quarters and the years now Moving to financial results for the quarter. The consolidated sale for the December 25th quarter is 899 crores which is higher by 28% from December 24th quarter primarily due to higher volume by 29%.
EBITDA for the quarter has increased by 19% to 103 crore compared to 86 crores in December 24th quarter. The EBITDA was favorably impacted by three factors. Higher sales volume by 29% mainly due to new capacities, higher specialty margins due to better product mix and number three, improved performance of specialty chemical subsidiary. In fact the EBITDA could have been much better had it not impacted due to five adverse factors. Let me explain all those five factors. The margin decline in the BOPP core from post increase in the imports in India during the mid quarter two. The carry on impact continued on the margins although imports have been reducing very significantly.
And now the imports level in India is very insignificant level. Generally there is a seasonal impact as well in Q3 post Diwali period and due to Christmas holiday period we see better demand scenario in the quarter four of current financial year. Second factor was higher USA tariffs. If you recall there is an increase in the USA tariff started impacting the margins from the mid quarter two of the current financial year. So obviously there is an additional impact in the quarter three as the full quarter impact is there in the Q3 which was not there in the Q2.
Third factor was volume loss of about 6% due to shutdown on one of our major Bopp lines which of course got rectified towards the end of the quarter. But the impact due to this factor was close to 4 crore rupees. There is a known repetitive Inventory loss of rupees 8.4 crore due to drop in the raw material prices during this quarter. And of course the fifth factor is the one time increase in the past period employee benefit gratuity liability by about 4 crore rupees in line with the new labor codes announced by the government of India.
Beside these factors, other income includes a known repetitive foreign exchange gain of rupees six crore related to capital reduction in a wholly owned subsidiary of the company. So in totality the adverse factor or the non repetitive factors net impact is close to 20 crore rupee on the quarter three results. The PAT impact compared to quarter three of last financial year is muted due to increased depreciation in interest related to new capacities. BOPP film gross margin has been running during the quarter at 13 rupee per kg on a comparative basis it was 22 rupee per kg in September 25 quarter and 21 rupee per kg in December 24 quarter boped film gross margin.
operator
Sorry to interrupt sir, your voice is not audible. Hello. Ladies and gentlemen, please stay connected while we connect the management. Sam. Ladies and gentlemen, the line for the management has been connected over to you sir.
Neeraj Jain — Chief Financial Officer
Hello again to all of you. We are so sorry the call got disconnected so please pardon me if I repeat some of the points. So we already explained the net impact of close to 20 crore rupee in the quarter three which are one off items in the quarter three. The PAT impact in the quarter three compared to last year similar period is muted largely because of increased depreciation and increased interest related to new capacities. Bopp film gross margin has been running during December 25 quarter at 13 rupee per kg compared to 22 rupee per kg in September 25 quarter and 21 rupee per kg in December 24 quarter.
The ballpark film gross margin has been running at 12 rupees per kg during December 25 quarter. On a comparative basis it was 6 rupee per kg in September 25 Quarter and 21 rupees per kg in December 24 Quarter. Now moving to the outlook for the coming quarter, the company expects near to double digit growth in the coming quarters in the top line largely because of the enhanced utilization of the resulting elite capacity. Recently announced reduction in the USA tariffs will lead to improved profitability from the USA operation starting from the quarter one of the next financial year once the existing inventory in the US which is already duty paid is exhausted.
Of course we do not expect non repetitive items of the quarter three to repeat in the quarter four. Now Coming to Business Vertical Wise Performance first on the Specialty Chemicals the specialty chemical subsidiary has continued to achieve the tractions and posted sales of 52 crore rupees with 25% EBITDA in December 25 quarter. The specialty chemical subsidiary has developed three new products recently which should be commercialized over the coming quarters. Post approval at the customer cents. We expect this growth trend to continue for the specialty chemical business with new innovative products in pipeline. Moving to Rigid Packaging Vertical the Cosmo Plastek which is the rigid packaging vertical of the company has reached ebitda breakeven in December 25 month.
The business has reached close to 70% of the capacity utilization in quarter three. Now the focus for the vertical shall be on achieving higher profitability through higher capacity utilization and improving efficiencies. Moving to Consumer Businesses Cosmo has two consumer businesses, Zigli which is the pet care wrenches and Cosmo Consumer which include the window films, paint protection, film and ceramic coatings. Both the consumer businesses continue to scale up. Zigli in fact has posted over 50% top line growth in December 25 quarter on a year on year basis. The business model is moving more towards services and house brands which is a high margin business.
Moving to Debt Position the company Net debt at December 25 is 1215 crore which is lower by 20 crore rupees compared to previous quarter. The net debt to EBITDA stand at 2.8 times and net debt to equity stand at 0.8 times. As said earlier, the company is running at peak level of the debt as most of the debt related to the new capacity is already built in the balance sheet. But full year effective returns are yet to kick in for the new capex. There is a significant net debt reduction plan for the next two to three years.
On that note, we conclude our opening remarks and would be glad to discuss any questions, comments or suggestions that you may have. I would like to ask the moderator to open the line for the questions please. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on your touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Nirav J. Modia from Anvil Wealth. Please go ahead.
Nirav Jimudia
Yes sir, thanks for the opportunity and good afternoon to everyone. Sir, I have a few questions. So sir, first you touched upon in your opening remarks about the USA tariff for third quarter. I think it started in mid of second quarter. So first if you can just quantify what was the impact of US tariff in third quarter of FY26.
Neeraj Jain
It’S near to full impact. So as we said depending on the MERC between 4 to 5 crore rupees the net impact because of the USA tariff out of this 6 crore rupee impact was already baked in in the quarter two results. So there is additional impact of close to 8 crore which is very difficult to appreciate to exactly quantify but we expect it’s close to 8 crores.
Nirav Jimudia
Yeah, see on a full year basis it was expected to give a 50 crore rupee impact to our PNL. More than that all of a new growth had curtailed because of this anti dumping duty. Now customers are coming back and want to discuss business again. So this will have two positive impacts. One is the profit immediate profitability improvement and the second is the growth in the business which would also be a profitable business for us.
Nirav Jimudia
Correct. So that’s what I was coming through sir. One you mentioned about the USA but I think now EU FTA also is in place. So do you see any opportunities? Not today, but let’s say starting next year when the EU FTAs would be in place. So do you see a business case opening up for us in Europe? And last time you also touched upon Japan as a market where we have been trying to develop and try to improve our sales. So just wanted to have your thoughts on both these geographies, how this could help us in improving our specialty volumes.
Neeraj Jain
Yes, if you really see Americas and Europe are the biggest export region for us and now India entering into FTA with both of them, this should be quite positive in the quarters to come. Coming back to the third question, we have also entered into a joint venture with Filmax in Korea. So that is another region that we intend to grow over next couple of years. And similarly for Japan, Japan will be actually the slowest amongst all these because Japan is easy to enter. Sorry, difficult to enter and difficult to exit. So you know, customers take their quite a bit of time.
But then if you can make the quality for Japan, you can be successful anywhere and everywhere. So we are taking that phased manner approach for Japan. Japan will not bring immediate results but we should get very good results from both us, Europe and Korea as well.
Nirav Jimudia
Is it possible to quantify the amount of business which we are currently doing from Europe?
Neeraj Jain
I won’t have it immediately, but it’s quite sizable out of our total exports.
Nirav Jimudia
Perfect. Second question is on the newer line of 81,000 tonnes which we have commissioned. So how much this new line has operated in third quarter? And also like with one of the lines now being corrected in terms of whatever shutdowns it had, how do you see Q4 versus Q3 in terms of the volume growth?
Neeraj Jain
See, as far as the new line is concerned, in quarter three on an average we could run it at 70% of potential capacity, not as much because of orders, but there is a phase wise improvement or speed increase that the supply does post February we should be able to run this line at full output in January. Already there has been some, I mean some more output increase from this line. We have reached now close to 80% of the potential and we expect that from March onwards we should be able to get 100% out of this line.
Nirav Jimudia
Correct. And sir, with reference to the contribution margins in the Bopp, I think because of all those factors which you mentioned, seasonality and the holidays, there was some dampening effect on the demand in Q2. See, possibly because of which the margins are also lesser. But let’s say in Q4 or let’s say going into the season into Q1, how do you see this margins? So have they started improving again? BOPET was Visible. But I was just looking from a Bopp angle that whether the margins have improved on the Bopp side as well.
Neeraj Jain
Yeah, Bopp margins have also improved. They started improving from December and right now January margins are even better than December margins. So yes, they are also on an improvement side.
Nirav Jimudia
Correct. Sir, next question is on the window of like you mentioned that the line is already working at close to around 30 crores of annualized sales. So just wanted to understand from you that at what level of sales this window films would start breaking even. We have talked about 50% CAGR growth in that window film business. But let’s say from a loss point of view at what level of sales we can see start seeing breaking even.
Neeraj Jain
See, there are two factors playing in this business. One is that month after month our contribution margin is going up because we are able to. One is produce more volumes and second is we are able to cut down different types of cost in this business. The second critical factor is the amount of marketing that we are going to do in this business. What we have projected right now is close to 15 crore of marketing cost next year. And we expect that this business based on the current margins should be roughly 80, 85 crores at which it should start to break even.
operator
Thank you. We have the next question from the line of Gaurav from Capital Farming Consultants. Please go ahead.
Unidentified Participant
Yeah. Hi. Thanks for opportunity. So my first question is on the strategy that we have said that in coming years, at least three, four years now down the line we will be focusing not so much on the CAPEX side and we would like to maximize our already commissioned facilities. Right. So I would like to understand from the management side that to what extent that we can expect maybe by FY27 and FY28. Right. That what percentage of capacity utilization we can expect from the commission facilities and how much additional EBITDA margin. Right. Improvement in margin we can expect from it.
Neeraj Jain
There are two parts to it. First is from a revenue perspective from what we did in quarter three, we can easily get around 25 to 30% more output from our assets. So if you are able to fully sweat out the assets, there’s a potential of 25 to 30%. The biggest potential is available in the Bopp line and the CPP line. Bopp line. We feel that it will be fairly easy for us to reach to the full capacity utilization. CPP is growing at a good speed but it may take some more time to reach to full utilization.
Because CPP is relatively a newer business to us than the Bopp as Such coming to your second thing, our focus now remains on because we’ve added very significant capacities in the recent years. So for next three years for sure we are not going to invest on any significant capex or any significant GOPP asset. Our focus will be entirely to shift to specialty business. Because of our new line, our specialty as a percentage to our total sales has come down from 70% to 50%. Our target will be to take this number to 75%. And the other beauty now about Cosmo is that earlier we were dependent only on one business.
Now first is within the film business. We have diversified into specialty polyester and CPP business and then we have added newer businesses which have a very high margin potential. So you will see that increasingly our new business as a percentage to total business will continue to go up and they have a better potential or better ROCE and much more stable ROCE in the years to come.
Unidentified Participant
Yeah so before I ask my second question a follow up within this if you allow. See from a potential point of view, yeah we all are optimistic considering more than thousand crore plus you have invested in the Capex for the last three, four years, right? But considering the realistic situation that we now face in the flexible packaging specifically Bob, where some of the lines by our peers have been commissioned in recent times and some of them are already in pipeline over a period of next one to three years, right? So, so what could be the realistic volume per se? I’m not talking about in terms of the revenue per se, amount per se because amount can be up and down depending on the raw material prices and all those things but quantity per se what is the realistic assumption that we can build in our models for let’s say next two to three years year on year basis?
Neeraj Jain
See on a very realistic basis we see no reason why we should not be able to fully utilize our BOPP and BOPED capacity. We should reach to our full potential. The only area where it is going to take us 12 more months to. Reach to full potential will be CPP.
Unidentified Participant
That’s great, that’s great. So second question is on now considering consolidated CapEx, right? So not so much of CapEx and free cash flow generation from the business, right? Since our EBITDA might improve, right? Our efficiencies might improve, asset utilization might improve. So, so what level of debt currently we are as on 31st of December 2025 and what that we expect that year on a year basis we would be able to reduce because of free cash flow generation from the business because of all these positive factors that we are talking about.
Neeraj Jain
We are at close to 1200 crore of the net debt at the end of the December 21st. And as we said at the beginning of the call, there is no major CAPEX plan. So a large part of the free cash flow will be utilized to reduce the net debt position of the company. Depending on the EBITDA level, how much EBITDA gets generated over the years. But we expect between 200250 crore each year reduction which translates to 15 to 18% of the reduction in the net debt position each year.
Unidentified Participant
Great, great. If you allow, what is our weighted average cost of debt ongoing as of now and have we seen any reduction because of the repo rate reduction by the Reserve bank of India in our weighted average cost of good versus what was 31st of March 2025?
Neeraj Jain
Our weighted average moves between 6.5% to 6.8% depending on the mix between the foreign currency loans and the India denominated loans. But yes, we witnessed the reduction in the interest rates and full impact is Yet to kick in .
Unidentified Participant
very competitive rates. Congratulations to your finance team. Thanks a lot. I will come up in the queue. Thank you.
operator
Thank you. We have the next question from the line of Jatin Damania from Swan Investments. Please go ahead.
Unidentified Participant
Thank you sir for the opportunity and thank you for a very detailed presentation as well. Am I audible first of all?
Neeraj Jain
Yes.
Unidentified Participant
Yeah. So I have. I had a few questions. I had few questions. So first of all as there was some news last month about ADD being implemented again on the imports from China. So how far are we on that? Like if you have any incremental news. On Bopp, there is no ADD neither on polypropylene nor on the Bopp. And India is quite competitive versus China when it comes to Bopp films. I was talking about pet films on the pet.
Neeraj Jain
The association has filed an application for anti dumping duty because China has a lot of surplus capacity and from time to time they do dump goods into the country. Therefore the association has put this anti dumping duty application and it may take some time because what we have seen that it normally takes 12 to 18 months for the courts to decide on these matters.
Unidentified Participant
Okay, so for at least another year we are not getting any incremental news on that.
Neeraj Jain
Yes, you are right. But the vocate margins are reasonably fair right now. They can certainly be better. But then the challenges we had 12 months back. I think China also has to some extent curtailed the exports into India.
Unidentified Participant
Sir, how, how down have we gone to with the imports like In Q, in Q2 you were saying the imports have declined a bit and in this quarter it is at a very insignificant level if we can quantify that.
Neeraj Jain
Yeah. So Bopp, there are 3 to 4,000 tons of imports happening. That is also largely to do with B grade C grade material and some of the material which India does not make, but most of it is B grade, C grade. And Popet also does not have any significant imports into the country.
Unidentified Participant
Okay sir, next, nextly if you can help us with the bupit fins gross margin. I guess you said in your opening remarks, but there was some dist.
Neeraj Jain
Sorry, what is your exact question?
Unidentified Participant
What are the bupet films gross margin. As you said that there has been an improvement in the booked films margins. So if, if you can tell us with the numbers.
Neeraj Jain
Quarter three gross margin was running at 12 rupee per kg as compared to 6 rupee per kg in the previous quarter.
Unidentified Participant
So it has nearly doubled from the last quarter. And this is majorly because of the low imports.
Neeraj Jain
Yes you can. You are right that imports have come down because China in between was dumping into the country that has now I think China has significantly reduced its imports and that gave an opportunity for the local players to somewhat improve the pricing. They are still not where we would love it to be but they are certainly better.
Unidentified Participant
As you said. Okay, as you said that from 13 rupees per kilogram based bopp fins gross margin it has started improving. It has started improving post that. So where have we reached right now?
Neeraj Jain
So maybe 2, 3 rupee higher compared to average of the previous quarter. Because generally, I mean you notice that. There’S a seasonal impact also as we said earlier, quarter three generally has been a lower quarter in terms of the demand because of the holiday period and Pol Diwali period. And quarter four generally is a strong quarter.
Unidentified Participant
Okay, so sir, the next question is. That. We mentioned that our specialty business has come down to 60% which was usually at 70% earlier. And we aim it. Aim to take it to 75% like if we can, if we can give a timeline to this and how we can do that.
Neeraj Jain
Specialty. I mean the fair point will be to see at the CAGR which in any case especially we are growing by type at 10% CAGR growth over the last six years or so. And there’s a very strong pipeline of the new products for these specialties. So we definitely see there is scope for further improvement in the growth rate for the specialty at an overall basis. When you come up with a new capacity, largely you start first with the base film more or code for more then over a period of time we move slowly to the specialty and semi specialty products.
So that’s what this is what is happening over a period of time we definitely see this improving. And I mean to conclude we see no reason why it will be lower than the 10% or double digit growth on the specialty side.
operator
Thank you. We have the next question from the line of Madhurati from Countercyclical investments. Please go ahead sir.
Unidentified Participant
Thank you for the opportunity sir. So considering both our segments and the capacity utilization improvement that we are expecting. So on the 4,700, 4,800 crore revenue that we expect in next year, what kind of margins can we expect? Considering the mix of specialty and the commodity where we see heading.
Neeraj Jain
See in our industry it is quite difficult to project that because on the core margins, I mean on the core films it’s very difficult to know what will be the margins as such. Our we have. We are trying to do two things. One is to continuously increase the specialty numbers. And second thing is to increase our export numbers. Both our specialty and export are close to 50%. And we will target to take them to a higher percentage by the end of next year. The second improvement will certainly come from the improved utilization not just in film but also in other businesses.
So all those will certainly add to the margins. But then it’s very difficult to project the core film margins.
Unidentified Participant
Right. So. So when do we expect.
operator
In between. Mother, your voice was breaking.
Unidentified Participant
Sorry. Is it better right now?
operator
Yes, please proceed.
Unidentified Participant
When do we expect to reach the 75% level of speciality?
Neeraj Jain
See historic. If we go historically it should take around four years.
Unidentified Participant
Okay, so. So when we say that sir. So from our investor presentation, understanding that the production, the demand and supply is kind of in equilibrium in the bob industry in India as well as there are no imports that are coming from China. So can we expect at least to reach a 25 rupees gross margin with better utilization for next year? Is that a conservative estimate that we can consider.
Neeraj Jain
The full utilization? Certainly yes. 25 rupees. As I said, I wish I can forecast that. But in general the margins are expected. I can basically tell you about next two quarters which are expected to remain reasonably strong.
operator
Thank you. We have the next question from the line of Sashwa Jalan from Augmenta. Please go ahead.
Unidentified Participant
Hi sir. Thank you for the opportunity. My first question is regarding the USA margin impact. As we are seeing a reduction in the tariff. Do we see any incremental margin increase from our base? And if you can quantify that for next year.
Neeraj Jain
Yeah. So for the full year, next year we should have two impacts. One is the margin improvement by close to 50 crores. And second is growth in our revenue and incremental margins coming out of that. You know, the entire growth had virtually stopped in last few months. So we should be able to get back that growth rates, you know and we have significantly aggressive plans for US market.
Unidentified Participant
But this would, this would be pretty much in the low double digit or maybe near team from a volume growth perspective.
Neeraj Jain
The growth perspective we have much higher targets for the next year.
Unidentified Participant
Okay. And so just to clarify, I think from a previous participant’s question regarding capacity utilization, I think you mentioned currently we are at 70% and we are driving it up to 90% for next fiscal. Is that understanding correct for the new capacity? Yeah, this is 90 of the name. Plate capacity or. How are we looking at it?
Neeraj Jain
Is the possible utilization? You know, so let’s say capacity as an example. If it’s 50000 tons and we feel we can reach to maximum 40, 45000 ton based on microns. So we are saying what is the probable utilization when we can reach and what is the utilization we can do from that probable capacity. So right now as I said earlier that Bopp and polyester we should be able to use the full capacity only. The CPP line may take some more.
Pankaj Poddar
Quarters just to add to it. I mean all this discussion is for the new capacities means the Bopp line, CPP line and the Puppet line on the old capacity we are running already full capacity utilization.
Unidentified Participant
Understood, sir. And so if you can just share the update regarding the power cost reduction, the project for the sun solar plant that we had, can we expect that for FY27 or will that run into FY28?
Neeraj Jain
We are already getting some gains from renewables and some more gains are largely expected to come in FY28.
Unidentified Participant
All right. And so just this last question. If I can squeeze in like right now the margin scenario, particularly if I talk about Bopp like you mentioned, 13 rupees for the last quarter and right now it’s slightly higher, maybe two to three rupees. And given next year we are expecting some new capacity to come in. So is it fair to assume that. This is sort of going to be. The reasonable stature for the next few quarters? Especially now, now that we have a higher share of commodity prints in our basket.
Neeraj Jain
What is your question? We did not get that.
Unidentified Participant
Are we, are we expecting the margin profile on the Bopp to expect to remain in the similar Band for the next few quarters. Given this new capacity also that is coming online from some of the peers.
Neeraj Jain
We can talk about quarter four and quarter one where it is expected to remain in a range bound manner. Beyond that it is difficult to comment about it.
operator
Thank you. We have the next question from the line of Vipul Kumar Shah from Sumangal Investments. Please go ahead.
Vipul Kumar Shah
Hi sir. So what percentage of our revenue comes from us now? Sir.
Neeraj Jain
Us is close to 400 crores for us.
Vipul Kumar Shah
400 crores. So I heard you correct. So we will get 50 crore benefit only out of reduction in tariff in US or have I misunderstood your amount?
Neeraj Jain
Yeah, you are right. Because there was a 50% tariff which was levied and we had to absorb quite a significant part of it. So you are right.
Vipul Kumar Shah
And so the journey of reaching 75% of specialty and semi specialty from 55% right now. So each year we will add how many percentages. So if you can give some roadmap it will be useful.
Neeraj Jain
We had been growing at 10% CAGR and we have no reason to believe that you know at least why we don’t grow in double digits.
Obviously our attempt is to grow even more because we have more capacity to spread our wings.
Vipul Kumar Shah
So 26, 20, 20, 27, 28 we can have a 65% specialty and semi specialty mix.
Neeraj Jain
Yeah. That is what we intend to target. Right now we are sitting at close to 51, 52% and our target will be to definitely cross 60% over the next two years.
Vipul Kumar Shah
Last question. This 81,000 bopp field and recent moped line. So what is their specialty and commodity mix? If you can give any idea,
Neeraj Jain
we have been able to right now convert close to 20% into specialty. But many because it was a new business for us. So it took us more time than it would have taken for the Bopp film. But now we have developed a good range of films and we should be able to scale up faster in the times to come.
Vipul Kumar Shah
And regarding this 81,000 pop line, what percentage of that line is specialty and what percentage is commodity? Right now
Neeraj Jain
see we do not break it line wise as much we normally discuss about the overall numbers.
Vipul Kumar Shah
Okay sir, thank you very much.
operator
Thank you. We have the next question from the line of Amar Kumar from AIK Securities. Please go ahead.
Unidentified Participant
Yeah. Good evening. Sir. I have a few questions with significant new capacities coming up in BOPB segment. How do you see the demand supply balance evolving over the next two, three years?
Neeraj Jain
Your voice is not clear.
Unidentified Participant
Yeah. Are you hearing my name is? I am clear.
Neeraj Jain
Yeah. Go Ahead.
Unidentified Participant
Yeah. With significant new capacities coming up in the Bopp segment, how do you see the demand supply balance evolving over the next two, three years?
Neeraj Jain
As far as world is concerned, we feel Bopp will be fairly balanced when it comes to India. FY27 should be largely balanced. But FY28 supply could be more than demand.
Unidentified Participant
So by that time our value at this event will be much higher and export will be much higher. So we will not say.
operator
Sorry to interrupt it between. Aman, your voice is speaking.
Neeraj Jain
Yeah, yeah, you are right. You’re right. Hello. You are right, what you said. Yeah.
Unidentified Participant
So by two, three, next two, three years, I think our specialty business will be much higher. And since we export most of this facility. So because of this over capacity.
Neeraj Jain
You are right.
Unidentified Participant
My understanding is right. Yeah. Okay. Yes. So how do we see the company’s consumer business setting up over the next two, three years? And specifically what is the growth potential in Europe for sensual film?
Neeraj Jain
So this is a, you know, fast growing business for us. We are pretty happy with the progress that we have made. Whether it is on the product side getting the right people with us start to build a brand in the market. So we are going directionally very well. And we have some very aggressive targets for this business. This is a very high gross margin business for us and it’s more of a consumer product. Once we are able to scale it up, this should result in good profitability for the group.
Unidentified Participant
Okay, so what is the business scope and long term potential of the tire with this Korean partner?
Neeraj Jain
Which one?
Unidentified Participant
Korean partner?
Neeraj Jain
We have a joint venture Korean in Japanese. I mean Japanese take a lot of time to develop something new. Korea takes somewhat lesser. So immediate results may not happen. But you will start to see a lot of results coming from 12 months from now.
Unidentified Participant
Okay, sir.
Neeraj Jain
And each month there will be incremental results.
Unidentified Participant
Yeah. So one thing, one thing you have done right that jiggly since it’s a very high potential business but it does not match with our core business. So you are demerging this business from Cosmo. So what is the timeline sir, when We can expect this? .
Neeraj Jain
We have always stated FY27 and we maintain that.
Unidentified Participant
Okay, and what is the current situation of this business?
Neeraj Jain
If you see other players in pet care industry, they’re all getting very high valuations, close to 5 to 6 multiple of the revenue. And you know Zigli has already created a very good brand name especially in the North India market. And we are trying to spread our wings in the west. We have grown 50% on year to Date basis which is quite a decent growth. The good thing about our business is that we are the only players in the market who have a complete ecosystem where we are providing veterinary care, service, grooming services and host of products including many house labels.
So directionally we are going well and we are happy on the progress till.
Unidentified Participant
Now since this business, this trade agreement with us. So right now we are doing around 400 crore of business in US so what type of growth we see over the next two, three years since it’s a great market for Cosmo.
Neeraj Jain
Yes. So I would say in last few months the growth was largely curtailed because of the anti dumping. Customers are really welcoming and so is us welcoming this change from the American government and we would look for some aggressive growth and we will share the progress in every quarter.
Unidentified Participant
Sir, one last question is that I. Have gone through the con call transcript of this SRF so in that concord they have mentioned that in China the government has asked the Bobbit players to reduce or curtail their production by 20%. So how correct is that news and how it will impact the Bopid business in India?
Neeraj Jain
Across certain sectors where companies are carrying older assets and across sectors where China is not making money Government has been pursuing the private entities to curtail the sales. Now obviously government has given certain directions and we have seen that China stick to the broad guideline that it set for itself. So we have to see the progress. But you are largely right in terms of what you have heard from srf we do not have complete tracking of that but you are right that in general Chinese government is pursuing to shut down the older capacities and we could certainly see that in last few months there is much lesser import from China.
Unidentified Participant
And so lastly I consolidate the management for three announcements. First no major CapEx number two, all the CapEx in the value added business and I think the merger of this siglib business. So all the best to the management for the coming quarters and the year ahead. Thank you.
Neeraj Jain
Thank you.
operator
Thank you very much ladies and gentlemen that was the last question for today’s conference. I now hand the conference back to the management for closing comments. Thank you and over to you sir.
Neeraj Jain
Sure. So to summarize companies focus will be on setting the best use of the strategic capex which we did over the last three years or so which means we reach the close to full capacity utilization and enhance the specialty business. Each of our business verticals will focus on high margin and stable Rosie the key focus shall be on intrinsic value growth for each business and unlock value at appropriate time. Future capital allocation in the business based on incremental rosie and valued in the intrinsic value. Further strengthen the financial resilience by reducing corporate net debt substantially over the next two to three years.
Many thanks for joining. Thank you.
operator
Thank you members of the management on behalf of Cosmopost Limited that concludes this conference. Thank you for all for joining us and you may not disconnect your line. Thank you.