Cosmo First (COSMOFIRST) Q2 FY27 Profit More Than Doubles as Sales Jump 51%
Cosmo First's Q2 FY27 profit surged 111% year-on-year to ₹99 crore, driven by a 51% revenue jump and a sharp margin expansion.
Cosmo First delivered a powerful quarter with revenue up 51% and profit more than doubling. Growth was led by specialty film volumes and newer businesses, though a customs refund and tax benefit flattered the bottom line.
For Cosmo First, a major capex cycle is now shifting from build to harvest. The September quarter shows what that looks like: a surge in sales from newly commissioned lines and a profit jump that outpaces it, though the path there had some help.
Revenue rose 51% year-on-year to ₹1,388 crore, while net profit more than doubled to ₹99 crore. The net profit margin expanded to 7.1%, up 250 basis points from the June quarter. This marks the third consecutive quarter of sequential growth in both sales and profit.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 1,387.9YoY +51% | 1,165.5 | 919.0 |
| Profit (₹ Cr) | 98.6YoY +111% | 53.8 | 46.7 |
| Net Profit Margin | 7.1%YoY +39% | 4.6% | 5.1% |
The Volume Engine Behind the Growth
The acceleration was driven by its core packaging films business and fast-growing new segments. According to the company's investor presentation, specialty and semi-specialty film volumes grew 15% year-on-year. The specialty chemicals unit saw revenue jump 84% to ₹90 crore, while the rigid packaging business grew 90% to ₹39 crore.
Management is focused on shifting the mix toward higher-value products. Specialty films now make up about 60% of film volumes, with a target to reach 70%. This shift, alongside capacity utilization nearing 90%, is key to improving returns on the ₹1,250 crore invested since FY24.
The One-Offs That Flattered the Print
Headline profit growth of 111% was boosted by non-operational items. A customs duty refund of ₹24.8 crore at its US subsidiary, as noted by Multibagg.ai, added to earnings. The company also adopted a concessional tax regime, leading to a tax credit that turned the quarterly tax expense negative.
Stripping these out, the underlying operational profit growth is more modest. A ₹7 crore stock loss from falling raw material prices also affected the margin. The core story is a business scaling up, but the exceptional items provided a significant tailwind this quarter.
A Focus on Debt and the Road Ahead
With major capital spending complete, the focus turns to leveraging the new assets and reducing debt. Net debt fell to ₹1,057 crore in September from ₹1,234 crore a year ago, according to the investor presentation. The net debt-to-EBITDA ratio improved to 1.9x from 3.0x.
Management, cited by StockFin.ai, targets 20% revenue growth for FY27 and aims to keep net debt below 2x EBITDA. The plan is to fund growth from internal accruals, with a large new coating line for specialty films set to commission in the second half of the year.
Key Points
- Revenue growth of 51% YoY was powered by a 15% rise in specialty film volumes and explosive growth in newer segments like chemicals and rigid packaging.
- Net profit more than doubled, but the 111% jump was significantly aided by a one-time customs refund and a tax credit.
- The company is deleveraging, with net debt down and the debt-to-EBITDA ratio improving to 1.9x, as it shifts from a heavy investment phase to harvesting capacity.
- The strategic pivot toward a 70% specialty film mix aims to deliver more stable, higher margins, though commodity film pricing and raw material costs remain key watchpoints.
Hexa Perspective
Cosmo First's quarter demonstrates successful capacity ramp-up, translating into strong top-line momentum. The profit surge, however, carries a one-off asterisk that investors should note when projecting future earnings.
The coming quarters will test the sustainability of this margin expansion. Success hinges on executing the specialty mix shift and maintaining high utilization, all while navigating polymer price volatility. The reduced debt burden provides flexibility, but the valuation discount to the industry suggests the market is still weighing execution against the recent exceptional gains.
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