Cosmo Films skyrockets 10% on bonus issue plan

Shares of Cosmo Films soared 10% to Rs 2,044.75 on BSE in Wednesday’s intraday trading after the company announced the board meeting on Monday, May 9, 2022 to reflect on the show free shares. The board will also review the audited financial results for the quarter and year ended March 31, 2022.

Over the past year, the packaging company’s stock has soared 190%, compared to an 18% rise in the S&P BSE Sensex. Earlier, it hit a record high of Rs 2,140 on April 11, 2022. At 10:29 a.m.; it rose 9% to Rs 2,015, against a decline of 0.51% in the benchmark.

Cosmo Films is a global leader in films for packaging, labeling, lamination and synthetic paper and an emerging player in specialty chemicals, polymers and pet care.

In March, the company announced its expansion by installing a CPP film production line in Aurangabad with an annual rated capacity of 25,000 metric tons (MT). The CPP line will require an investment of around Rs 140 crore, funded by accruals and internal debts and is expected to start commercial production in 2 years.

“With current CPP capacity operating at nearly 100% utilization, the company has planned for capacity expansion with the world’s widest line width and lowest cost of production. Specialty Chemicals and Zigly are progressing well according to plan,” the company said.

In the October-December quarter (Q3FY22), Cosmo Films reported an after-tax profit of 65% year on year (YoY) at Rs 104 crore on the back of strong operational performance. Meanwhile, EBITDA margin increased by 251 basis points to 17.9% from 15.38% in Q3FY21 and net income increased by 35% year-on-year to Rs 771 crore from Rs 572 crore during of the quarter of the previous year.

During the quarter, the company received a Production Related Incentive (PLI) sanction for the production of specialty films for use in electronics. The incentive under the scheme will be five years on 100 percent production from the new plant.

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