Thread by @ValueEducator

Annual Report Highlights No : 8

#Cosmofilms FY 22 Annual Report Highlights

Like & Retweet for better reach !

1. Company Overview

1. Cosmo Films is the pioneer of BOPP films in India
2. It is world’s largest producer of thermal lamination films and
Second largest in speciality label films

3. Recently they are diversifying their business into Speciality
Chemicals and Petcare (Zigly)
4. Company has two state of art R&D centres in Aurangabad,
India and USA

2. Business Segments
Major Business segments are

i) Film Business
a) Speciality Films
b) BOPP Films (Commodity)

ii) Speciality Chemicals - Started commercial production
in FY22

iii) D2C Petcare (Zigly) - Launched in Q2, FY22

Speciality Films sales have grown 18% YoY in the last 3
years

Speciality Film Sales stand at 70% of Total revenues during
FY22. Target to reach 80% by the end of FY23

Exports during the year increased to INR 1292 Crores from
874 Crores in FY22

3. Performance Highlights
Russia - Ukraine war which started in Feb 2022 disrupted
global supply chain causing oil and commodity prices to
move up sharply. However India remained in better shape
compared to its other counterparts

According to the Indian Institute of Packaging (IIP), the
packaging consumption in India has increased by 200% in
the past decade. With growing awareness, the requirement
for eco friendly and sustainable packaging is steadily on the
rise

BOPP margins have been on a increasing trend, In Q1 FY23
BOPP margins are at 35 rupees per Kg

In Speciality Films, company is going to launch Heat control
film for offices and homes during FY23

Company launched Pet care in Q2, FY22 with simultaneous
launch of website, first

mobile van and its flagship stores under the brand name “Zigly”

Zigly Provides end to end Solutions for Pets, Company plan
is to launch 15 - 20 experience centers during FY23

Speciality Chemicals and Petcare business will get
demerged in the medium term.

Value unlocking may happen after demerger

It is trading at very low PE (Median 7 and Peak 10.9).
Because it is perceived as a commodity business. But if you
look at the image below they are de-commoditizing their
business. Now they have 64% volume share of

speciality films (Non Commodity) and 36% volume of Commodity films

4. Manufacturing Facilities
Cosmo First has total 4 Manufacturing facilities, 3 plants are
located in India, 1 plant is located in Korea

Total Installed capacity of Cosmo is as follows
○ BOPP - 196K MT pa
○ Thermal - 40K MT pa
○ Coating - 20K MT pa
○ Metalizing - 22K MT pa
○ CPP - 10K MT pa
○ CSP - 7.2K MT pa

5. Capex
1. In FY22 capex expenditure is of INR 283 Crores as
compared to INR 75 Crores for FY21

2. Capex in FY22 is primarily spent on Specialised BOPET line

6. Financials
1. Net Sales - INR 3038 Crores
2. EBITDA - INR 620 Crores (FY21 - INR 430 Crores)
3. The enhanced EBITDA is due to higher speciality sales and
better operating margins
4. Net debt has come down to INR 303 crores from INR 438
Crores last year

5. Net debt to EBITDA is less than 0.5
6. ROCE stands at 29% and ROE at 39%

7. Outlook
1. Plans to change the packaging landscape by creating
sustainable and intelligent packaging solutions

2. Company’s focus is on improving the speciality films, which
would further de-commoditize the present business

Some of the key products that will drive growth in speciality
films are
○ CSP (Cosmo Synthetic Paper)
○ Direct Thermal Printable (DTP)
○ Sustainable PVC free solutions for Graphic
Applications
○ Shrink Label Films
○ Heat Control Films