/** blogpostTitle: Cosmo First FY26: From Capex to Utilisation, With Debt Reduction in Focus blogpostSlug: cosmo-fy26 blogpostCoverImageUrl: null blogpostCoverImageDescription: Ultra-realistic corporate finance visual showing a clean boardroom desk with an open laptop displaying a financial dashboard: a revenue bar chart rising from 2895 to 3639, an EBITDA bar chart rising from 362 to 479, and a line chart showing net debt moving from 1234 down to 1159. Beside it, a simple donut chart representing five business segments sized roughly: films dominating, smaller slices for speciality chemicals, rigid packaging, consumer films, and petcare. Neutral lighting, no logos, no text labels. blogpostShortTitle: Cosmo First FY26: Utilisation and debt focus */

Cosmo First FY26: From Capex to Utilisation, With Debt Reduction in Focus

Cosmo First ended FY26 with a clear message to investors: the heavy investment phase is largely behind it, and the next chapter should be about sweating newly created capacity and lifting returns. For Q4 FY26, consolidated net revenue rose to INR 1,021 crore from INR 746 crore a year ago, while EBITDA increased to INR 130 crore from INR 85 crore. PAT for the quarter stood at INR 37 crore, with EPS of INR 14.2.

The full-year picture was similarly strong on the operating line. FY26 revenue grew 26 percent to INR 3,639 crore (from INR 2,895 crore in FY25). EBITDA increased 32 percent to INR 479 crore (from INR 362 crore), and the EBITDA margin improved to 13.2 percent. PAT rose to INR 156 crore from INR 133 crore, though management noted that profits were moderated by higher depreciation and interest costs linked to newly commissioned capacities and by specific one-off items.

Management attributed the quarter’s EBITDA improvement to four factors: higher sales volume (41 percent in Q4), a higher specialty sales mix, improvement in base BOPP and BOPET margins, and a better contribution from the speciality chemicals subsidiary.

FY26 in numbers: growth led by volumes and commissioning

Cosmo First’s FY26 was shaped by the commissioning of significant new capacity in films, alongside ongoing scaling of newer verticals. Management noted that revenue growth for the year was largely backed by a 27 percent increase in volumes after commissioning BOPP and CPP lines during the year.

A key overlay on these numbers is the company’s balance sheet. Net debt reduced to INR 1,159 crore at March 2026, and the company highlighted that debt reduction has started after peaking in September 2025. Net debt to EBITDA improved to 2.4x at March 2026 (from 3.0x at September 2025), and net debt to equity stood at 0.7x.

The company also disclosed that net worth has expanded steadily over time, reaching INR 1,617 crore in FY26.

Management also pointed to the nature of PAT growth in Q4. The quarter included an exceptional item of INR 7.2 crore related to a provision by the company’s Netherlands subsidiary. Additionally, there was a one-time impact from reversal of deferred tax assets of INR 5.3 crore due to reorganisation of a subsidiary in South Korea.

Films remains the anchor, but mix and margins matter

Films is still the main engine. In FY26, the films business reported sales of INR 3,265 crore, up 25 percent YoY, with EBITDA of INR 470 crore and an EBITDA margin of 14.4 percent.

Cosmo First positions its films vertical as India’s largest flexible packaging film producer, with BOPP capacity of 277k MT. It also emphasises export strength. Around 50 percent of films revenue is from exports, spanning more than 80 countries.

The operational narrative for FY26 is linked to capacity expansion. The company highlighted that BOPP capacity increased by 45 percent in FY26. It also added a speciality coating line and a lamination line during the year.

What investors will watch next is the specialty trajectory. In quarterly disclosures, management explained that specialty share fell after the new BOPP and CPP lines were commissioned, because the initial production mix skewed towards base BOPP and CPP films. In Q4 FY26, core films formed 40 percent of the volume mix, while specialty and semi-specialty comprised 60 percent.

The company believes its specialty strategy acts as an insulation layer against core film cycle volatility. In the earnings call, management said industry margins for BOPP and BOPET may remain volatile as new capacity comes up, and it is difficult to give guidance on EBITDA because of industry cycles. The company’s stated control levers are mix and cost.

On the margin side, management disclosed that BOPP margin ran at around INR 20 per kg in Q4 FY26, improving from INR 13 per kg in the December quarter. BOPET margin was around INR 18 per kg in Q4 FY26 versus INR 12 per kg in the December quarter. Management suggested current BOPP spreads were broadly in a similar range to Q4.

Newer verticals: chemicals profitable, Plastech stabilising, consumer bets scaling

Cosmo First’s newer verticals are central to the company’s claim that it is entering a phase of superior ROCE. The presentation explicitly calls out a targeted rise in non-film EBITDA over the next three years.

Speciality chemicals

Speciality chemicals stood out in FY26. The business reported FY26 revenue of INR 204 crore, up 9 to 10 percent YoY in value terms. EBITDA increased sharply to INR 53 crore, and EBITDA margin expanded to 26 percent (versus 18 percent in FY25, with a note that FY25 EBITDA excluded a one-time incentive).

Management explained in the call that chemicals volumes grew around 20 percent, but the value growth was lower because raw material prices were lower and pricing is linked to raw materials. The company also reiterated that speciality chemicals is a high ROCE business, and the presentation sets out a FY30 target revenue of INR 350 to 400 crore.

Cosmo Plastech (rigid packaging)

Rigid packaging is earlier-stage but moving towards breakeven. Cosmo Plastech reported FY26 revenue of INR 92 crore, up 86 percent YoY. The company stated that the business almost reached EBITDA breakeven, and in the call management said it reached EBITDA breakeven in Q4.

Importantly, management gave explicit profitability stepping stones: Plastech should start making high single-digit EBITDA in FY27, and mid-to-high teens EBITDA in FY28, supported by higher utilisation and improved efficiency.

Cosmo Consumer (window films and paint protection films)

Cosmo Consumer is a new initiative launched in May 2025. FY26 revenue was INR 23 crore, with Q4 FY26 revenue at INR 9.4 crore and an exit annualised run-rate of INR 38 crore.

The company highlighted the market opportunity for both window films and paint protection films in India, and also described the export opportunity as “huge”. In the call, management said it has started dispatching materials to America and Europe in the current financial year, but scaling will take time as customers ramp from small trial quantities to larger container shipments.

On profitability, management stated that Cosmo Consumer gross margins can be 35 to 40 percent. However, it also said the business will continue to make losses in the current financial year because it plans to be aggressive in building the brand, and it may take at least a couple of years to become profitable. The near-term focus is to reach INR 100 crore revenue.

Zigly (petcare)

Zigly continues to scale as an omni-channel petcare platform. FY26 sales were INR 55 crore, up 63 percent YoY. The presentation states an annualised run-rate of about INR 90 crore and 41 retail centres.

What changed structurally in FY26 is a higher services contribution, which management describes as a higher margin model. Services sales contribution increased to 61 percent in FY26 from 51 percent in FY25, and gross margins improved to 48 percent.

The company also spoke about a value unlock. In the earnings call, management said the first step is to put Zigly into a separate subsidiary within the financial year, and it is exploring raising external capital to fund growth.

Balance sheet, capex, and what FY27 hinges on

Cosmo First’s strategic framing is anchored in capex completion and debt reduction. The presentation notes INR 1,200+ crore of strategic capex was executed over the last three years and that major capacities have been commissioned. Management reiterated that capex ahead is expected to be minimal, with capex next year expected to be less than INR 100 crore.

That is why debt reduction is now presented as a key near-term goal. Net debt declined by INR 55 crore during Q4 FY26 to INR 1,159 crore, even after an increase in foreign currency loan value of INR 19 crore due to currency depreciation.

In the call, management said it wants to bring net debt to EBITDA below 2x within 12 to 18 months. It also stated that FY26 ROCE was 11 percent and expects ROCE to improve to around 14 to 15 percent as utilisation improves and newer businesses scale.

Another item investors may track is the US duties and refund. Management said the reduction in US tariffs should improve profitability from US operations from next year. It also said the refund process is open and the refund could be more than INR 60 crore, though some may need to be passed back to customers because of pricing actions taken earlier.

Takeaways

Cosmo First’s FY26 story is a blend of scale-up and transition. The company delivered strong revenue and EBITDA growth, aided by new capacity and improved performance from speciality chemicals. At the same time, profits were weighed down by higher depreciation and interest, along with specific one-off items.

FY27, as framed by management, is less about new projects and more about execution: pushing utilisation of newly commissioned film lines, raising specialty mix over time, improving profitability in Plastech, and continuing to scale consumer and petcare verticals while keeping an eye on debt reduction. With net debt still sizeable but trending down and capex expected to be limited, the next year should test whether the company’s “investment to value creation” transition converts into more stable returns and a cleaner balance sheet.