Cosmo Films Limited, a global leader in films for packaging, labelling, lamination and synthetic paper declared its financial results for the quarter ended June 2020.
The company posted an EBITDA of Rs 93 crore during Q1 (first quarter) FY21 (financial year) on the back of higher speciality sales (up by 20 per cent) and improved operating margins. Pent-up demand from previous quarter and supplies opening up in phased manner led to a favourable demand supply scenario and improved margins.
Covid-19 pandemic had marginal impact during the quarter. The company expects that Covid-19 impact may remain only marginal in the following quarters too barring unforeseen conditions.
Commenting on performance of the company, Pankaj Poddar, CEO, Cosmo Films Limited, said, “The company shall continue to invest in research and development 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 etc.,which should help to achieve automated paperless processes, lower the operating costs and provide superior service to the customers and other stakeholders. The company’s 100 per cent subsidiary is poised to start speciality master batches production in Q2’21 and chemicals in Q4’21.”
“As a part of its sustainability drive, the company has taken a target to be water positive at all its plant locations, increase in-house consumption of process waste (continuously being reduced) and also improve air quality by planting thousands of fruit bearing trees. The company is taking several other measures on the sustainability front to help customers and society at large and reduce costs. The company’s net debt now stands below two times of the EBIDTA and investment in new capacities is being evaluated to further strengthen the company’s share of specialty films,” added Poddar.
Commenting on the company’s foray into pet care business, Poddar said that the company is going ahead with the pilot launch in NCR investing about Rs 15 crore 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 with regards to size of the existing business. The pet care business has been growing in India at 22 per cent 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 organised players in India offering end-to-end comprehensive solution to the customers. Cosmo expects to fill up this void. It is a low capex business while brand building will require some investments in the initial years. The company believes the business will deliver high returns, high valuation and add significant value to shareholders.