Cosmo First Ltd. (NSE: COSMOFIRST) Research Report: Reasonable Revenue Growth, Outperforms the Indian Packaging Industry on EBIT margin and PAT margin in Q2 FY23

Cosmo First Ltd. (NSE: COSMOFIRST), established in 1981 as Cosmo Films Limited, is engaged in the manufacturing of specialty films for packaging, lamination, and labeling applications. Speciality films are used for flexible packaging applications and include print and pouching films, barrier films, overwrap films, lidding films, etc. Food, personal care, and pharmaceuticals are just a few of the industries in which the company’s products are utilized. Cosmo First exports its goods to Asia, Europe, and North America in addition to its strong presence on the domestic market.

Cosmo First Limited, for the second quarter of FY23, which ended on September 30, 2022, reported mixed financial results. On a consolidated basis, the total revenue of the company rose by 2.8% from Rs. 767 crore in Sept. 2021 to Rs. 789 crore in Sept. 2022, and the total expenses of the company rose by 8.1% from Rs. 639 crore in Sept. 2021 to Rs. 691 crore in Sept. 2022. Cosmo First’s Profit Before Tax (PBT) went down by 23.6% from Rs. 127 crores in Sept. 2021 to Rs. 97 crores in Sept. 2022, and earnings per share came in at Rs. 27 in Sept. 2022 as compared to Rs. 36 in Sept. 2021.

Cosmo First outperformed other packaging companies (like Polyplex Corporation Ltd., Ester Industries Ltd., etc.) on the basis of EBIT margin and PAT margin in the second quarter of FY23. Cosmo First generated standalone revenue of Rs. 739 crore and secured an EBITDA margin of 15.9% in Q2 FY23; it achieved an EBIT margin of 13.8% in Q2 FY23. The company secured a PAT margin of 9.4%, which is one of the best margins in the Indian packaging industry.

Cosmo First intends to invest heavily in capital expenditures over the next few years and hopes to achieve over 80% of its volume from its specialty and semi-specialty segments by 2024. Cosmo First’s speciality chemicals business is also looking to expand its current capacity. The management has set a target of 25% ROCE and 7-8% of the company’s consolidated revenue within the next 3-5 years for the masterbatch, adhesives, and textile chemical segments. Cosmo First intends to continue expanding its specialty film business. The company is concentrating on the creation of specialty and value-added products after recently commissioning a new BOPET line.

If you want to know more about Cosmo First and its true growth potential, then download the detailed equity research report prepared by our analysts. The research report contains a lot of useful information that can help you understand Cosmo First better. It includes background information on the company, in depth research, and analysis. It is a valuable resource for anyone interested in making a learned investment decision on Cosmo First stock.