Cosmo First completes Rs 1,250 crore capex, debt falls

In September 2026, Cosmo First Limited reported net debt of Rs 1,057 crore after completing more than Rs 1,250 crore of strategic capital expenditure since FY24. Net debt declined Rs 102 crore from March 2026 despite a Rs 148 crore increase in net working capital, and management said only limited specialty-focused capex remains.

Has Cosmo First completed its capex cycle?

Yes, Cosmo First says its strategic capex cycle is complete after investing more than Rs 1,250 crore from FY24 to FY26, with major capacities commissioned. The presentation describes the next phase as value creation through scale, utilisation and profitability, rather than broad-based capacity expansion. It identifies limited capex ahead but does not disclose a rupee value for that remaining investment.

The completed programme expanded film-making capacity and added adjacent businesses. Biaxially oriented polypropylene, or BOPP, capacity rose to 277,000 metric tonnes per annum by September 2026 from 196,000 metric tonnes per annum in March 2022. Cast polypropylene, or CPP, capacity increased to 30,000 metric tonnes per annum from 10,000 metric tonnes per annum, while coating capacity stood at about 45,000 metric tonnes per annum before a planned H2 FY27 addition.

Cosmo First reported more than 90% capacity utilisation in Q2 FY27 and said it was targeting near-full utilisation. Management lists additional volumes, a higher specialty mix, US business growth, renewable-power savings and rigid-packaging profitability as short-term growth drivers. The company also said all its business-to-business businesses were profitable, while its consumer businesses remained in scale-up mode.

How much has Cosmo First reduced net debt?

Cosmo First reduced net debt to Rs 1,057 crore in September 2026 from Rs 1,159 crore in March 2026 and Rs 1,234 crore in September 2025. The September balance was Rs 102 crore below the March level despite a Rs 148 crore increase in net working capital, which management attributed to higher raw-material prices following the West Asia war. Net debt had risen to Rs 1,166 crore in June 2026 before declining during the September quarter.

Leverage also declined across the period. Net debt to earnings before interest, tax, depreciation and amortisation, or EBITDA, was 1.9 times in September 2026, compared with 3.0 times in September 2025 and 2.4 times in March 2026. Net debt to equity fell to 0.6 times from 0.8 times a year earlier, while net worth increased to Rs 1,759 crore in September 2026 from Rs 1,617 crore in FY26.

Management said most debt associated with two growth projects was already included in the September 2026 balance sheet. It has stated an objective to reduce net debt substantially over the next two years. The presentation does not disclose a specific debt balance, leverage ratio or annual repayment target for that plan.

What supported Cosmo First earnings during deleveraging?

Cosmo First reported H1 FY27 revenue of Rs 2,561 crore, up 49% from Rs 1,719 crore in H1 FY26, while EBITDA rose 32% to Rs 324 crore. Profit after tax increased 70% to Rs 152 crore from Rs 90 crore. Revenue grew faster than EBITDA, resulting in an H1 EBITDA margin of 12.7%, compared with 14.2% in the prior-year half.

In Q2 FY27, revenue increased 51% year on year to Rs 1,388 crore and EBITDA rose 38% to Rs 177 crore. Management attributed the EBITDA increase to 15% higher sales volume, 20% higher specialty sales, improved performance at the US films business, and better results from specialty chemicals and rigid packaging. Q2 EBITDA included a Rs 24.8 crore write-back of additional US customs duties, partly offset by a Rs 7 crore inventory loss caused by lower raw-material prices.

Films remained the largest earnings contributor. Flexible packaging EBITDA rose to Rs 171 crore in Q2 FY27 from Rs 129 crore in Q2 FY26, while Cosmo Specialty Chemicals EBITDA rose to Rs 21 crore from Rs 13 crore. Cosmo Plastech recorded Rs 3 crore of EBITDA after a Rs 1 crore loss, while Cosmo Consumer and Zigly Pet Care recorded EBITDA losses of Rs 4 crore and Rs 14 crore, respectively.

What specialty investment remains for Cosmo First?

Cosmo First has specialty-focused projects scheduled for H2 FY27 despite calling its wider capex cycle complete. The principal project is a high-end chemical-coated film line with 16,000 metric tonnes of annual capacity, expected to be commissioned in H2 FY27. Management said the line is intended to reinforce the specialty films business.

Cosmo Plastech is also planning a nine-layer barrier-sheet line with annual capacity of 10,000 metric tonnes in H2 FY27. Management said the line would enable higher-value specialty products with minimal capex. The rigid-packaging business had 18,000 metric tonnes of current capacity, generated H1 FY27 revenue of Rs 75 crore, up 73% year on year, and reported a 7% EBITDA margin.

The films strategy is reflected in the BOPP product mix. Specialty and semi-specialty products represented 59% of BOPP volume in Q2 FY27, compared with 61% in Q1 FY27, as the new BOPP line ran higher base-film volumes during ramp-up. Cosmo First said it was tracking a path back to about 70% specialty and semi-specialty mix and targets 10% compound annual growth in specialty films, including output from new capacity.

Conclusion

Cosmo First is positioning the completion of more than Rs 1,250 crore of FY24-to-FY26 strategic capex as a shift toward asset utilisation and cash generation. Net debt fell to Rs 1,057 crore in September 2026 despite a Rs 148 crore working-capital increase, while H1 FY27 revenue reached Rs 2,561 crore and EBITDA reached Rs 324 crore. However, the H1 EBITDA margin declined by 1.5 percentage points year on year to 12.7%.

The next disclosed markers are the H2 FY27 commissioning of the 16,000-metric-tonne coating line and Cosmo Plastech's 10,000-metric-tonne barrier-sheet line. Investors can also watch progress toward near-full B2B capacity utilisation, management's two-year debt-reduction objective, and the specialty and semi-specialty BOPP mix as it seeks to move from 59% in Q2 FY27 toward about 70%.