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**Financial Performance:** Cosmo First Limited reported consolidated sales of ₹759 crores for the September quarter, reflecting a 14% increase year-over-year, primarily driven by a 12% rise in specialty sales, improved volumes, and better margins. EBITDA surged to ₹107 crores compared to ₹72 crores in the same quarter last year. Although EBITDA would have been higher, it faced setbacks due to a non-repetitive inventory loss resulting from decreased raw material prices. Notably, the company’s BOPP films margin improved to ₹25 per kg, an increase from ₹19 per kg in the previous quarter, supported by robust demand.
**Future Outlook and Growth Drivers:** Management anticipates continued growth in specialty sales, with margin stability in BOPP films for FY ’25. The rationalization of renewable power costs at their Maharashtra plant is projected to yield an annual impact of ₹22 to ₹25 crores starting from FY ’25. The specialty chemicals subsidiary aims for high-teens EBITDA and over 30% return on capital employed for FY ’25.
**Order Book and Operational Updates:** The order book is reportedly at an all-time high, enhancing confidence in future performance. Capex plans for FY ’25 are set at ₹300 to ₹350 crores, focused primarily on the BOPP line and specialty sales enhancements. The new CPP line is expected to start production by Q3 or Q4 FY ’25, aiming to significantly increase production capacity.
**Analyst Q&A Insights (Detailed):** Analysts raised queries about specialty volumes and market positioning, with management confirming that over 80% of exports are specialty products, positioning Cosmo as a market leader in specific categories such as thermal lamination. Concerns regarding supply chain challenges and commodity pricing volatility were addressed with management expressing confidence in mitigating risks through strong operational strategies.
**Market or Regulatory Updates:** There were discussions on expected growth in the BOPP market, with local demand projected at approximately 50,000 tonnes per month, and potential new lines from various players set to increase capacity over the next two years.
**Strategic Focus Areas:** Cosmo is focusing on innovation, particularly in the specialty chemicals and rigid packaging sectors. The company’s strategy indicates a shift toward recyclable materials, aligning with global trends, and enhanced marketing efforts for customer education regarding new products.
**Investor Insight:** The financial health and growth potential, along with the strategic direction outlined by management, indicate a favorable outlook. Considering the robust growth in specialty segments and upcoming projects, Cosmo First appears poised for a positive trajectory, suggesting a favorable view for investment.