Cosmo Films soars 10% on bonus issue plan

The company's board will meet on Monday, May 9, 2022 to consider the issuance of bonus shares.

Shares of Cosmo Films soared 10 per cent to Rs 2,044.75 on the BSE on Wednesday’s intra-day trade after the company announced board meet on Monday, May 9, 2022 to mull issuance of bonus shares. The board will also consider the audited financial results for the quarter and year ended March 31, 2022.

In the past one year, the stock of packaging company has zoomed 190 per cent, as compared to 18 per cent rise in the S&P BSE Sensex. Earlier, it had hit a record high of Rs 2,140 on April 11, 2022.  At 10:29 AM; it was up 9 per cent at Rs 2,015, against 0.51 per cent decline in the benchmark index.

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

In March, the company had announced expansion by setting up CPP film production line at Aurangabad with annual rated capacity of 25,000 metric ton (MT). The CPP line will require investment of about Rs 140 crore, funded through internal accruals and debts and is expected to commence commercial production in 2 years.

"With current CPP capacity running close to 100 per cent utilization, the company planned capacity expansion with the world’s largest width line and lowest cost of production. Other growth plans i.e. Specialized BOPET line, BOPP line, focus towards growing specialty sales, expansion with Cosmo Specialty Chemicals and Zigly are progressing well in line with the plan," the company said.

In October-December quarter (Q3FY22), Cosmo Films reported 65 per cent year on year (YoY) jumped profit after tax at Rs 104 crore on back of strong operational performance.  Meanwhile, EBITDA margin expanded by 251 bps to 17.9 per cent from 15.38 per cent in Q3FY21 and net revenue grew 35 per cent YoY at Rs 771 crore from Rs 572 crore in a year ago quarter.

During the quarter, the company has received sanction under Production linked Incentive (PLI) for production of speciality films for use in electronic products. The incentive under the scheme will be for five years on 100 per cent production of the new plant.