Cosmo films Q4 conference call updates.
1)Commodity margins in domestic market improved from 4-5rs/kg to 10-15/kg. Margins improved after 2 years due to no capacity addition in domestic market leading to better Utilization of lines and increasing contribution of specialty films. Normalized margins are 18rs/kg.
2)Capex is minimal for next year only 10000 tons specialty films line. It will start from Q2.
3)Industry growing at 8-12%. BOPP growing faster at 1.5 to 2 times Gdp growth rate.
4)No supply coming this year. Next year 40000 tons to come in.
5)Expect to reduce 100-150cr of debt this year. Net debt is 643cr. Debt to equity is 1:1.
6)Mix in sales between Commodity and speciality 55-45.
Prior quarters 65-70%of margin was coming from specialty. Now the mix is 40%-60%.
7)Demand is strong currently. Domestic marketgrowing faster than exports.
8)American subsidiary was Ebitda positive this year. Expect it to improve from here. Earned 500000$ on 33M$ sale.
9)Target is to get 2/3rd revenue from specialty in 3-4 years.
10)Will only expand when debt to Ebitda is more than 2-2.5.
11)Currently having to refuse orders in specialty as lines running at full Utilization.
12)Capacity Utilization is 90+%.
Disclosure : I have a small tracking position