1
RESEARCH
Analyst - Abhishek Dalal I adalal@pinc.co.in I Tel: +91-22-6618 6462
STOCK DATA
SHAREHOLDING PATTERN (%)
STOCK PERFORMANCE (%)
STOCK PRICE PERFORMANCE
Market Cap
Rs1.3bn.
Book Value per share
Rs115
Eq Shares O/S (F.V. Rs.10)
19.4mn.
Median Vol (12 mths)
27,420 (BSE+NSE)
52 Week High/Low
Rs165 / 66
Bloomberg Code
CFLM@IN
Reuters Code
CSFL.BO
Qtr. Ended
Mar-08
Jun-08
Sep-08
Promoters
43.7
43.6
43.6
MFs/FIs
2.2
2.1
2.1
FIIs
9.5
9.5
9.6
PCBs
19.9
16.7
16.1
Indian Public
24.7
28.0
28.5
1M
3M
12M
Absolute
(27.6)
(19.0)
(18.7)
Relative
(0.6)
9.7
39.6
COSMO FILMS LTD.
Q2 FY 2009 update
BUY
Sector Packaging I CMP Rs 67 I Target Rs 125
KEY HIGHLIGHTS
Cosmo Films Ltd. (CFL) reported revenues of Rs2bn (+32%YoY)
in Q2FY09. This could be attributed to the dual effects of higher
volumes (+6%YoY) and realisations (+26%YoY).
z Margins affected by volatility in PP prices
Cost of raw materials rose steeply by 560bps (as a % of sales) to
Rs1.4bn as Polypropylene (PP) prices soared to record levels of Rs110
per Kg in July’08. Also, implementation of ERP software at the company’s
plants necessitated a build-up of finished goods inventory. Additionally,
power and fuel costs also rose steeply by 80bps. These factors served
to dampen margins by 270bps YoY to 12%. Hence op. profit growth
was subdued at 8%, with op profits settling at Rs245mn.
z Lower capital charges and tax provisioning boost PAT
While interest outflow rose 11% YoY to Rs38mn, on account of working
capital borrowings; the depreciation charge was lower by 9% at Rs54mn,
due to the decommissioning of old film lines at Vadodra. Coupled with
lower tax outflow, these factors contributed to a 20% YoY jump in net
profits to Rs109mn.
z Capacity Expansion on track
CFL’s capex of Rs2bn scheduled for execution in 2 phases over the next
2 years, is on track. The first phase, which consists of 1 BOPP lines of
35k tpa as well as metallising and Thermal Lamination capacity of 9.6k
tpa and 25k tpa resp. is scheduled to come onstream by the end of
Q4FY