Cosmo Films Ltd on Wednesday reported a 69.15 per cent increase in consolidated net profit at Rs 46.99 crore for the first quarter ended June, 2020, helped by improved operating margins.
The company, which manufactures speciality films for packaging, lamination, labeling and synthetic paper, had posted a consolidated net profit of Rs 27.78 crore in April-June quarter a year ago, Cosmo Films said in a BSE filing.
However, its revenue from operations declined 11.04 per cent to Rs 481.29 crore during the quarter under review as against Rs 541.02 crore in the corresponding quarter of previous fiscal.
"The company posted an EBITDA of Rs 93 crore during Q1 FY21 on the back of higher speciality sales (up by 20 per cent) and improved operating margins," Cosmo Films said in a post earning statement.
"Pent-up demand from previous quarter and supplies opening up in phased manner led to a favourable demand supply scenario and improved margins," it added.
The company's total expenses in Q1 FY21 declined 17.16 per cent to Rs 420.64 crore as against Rs 507.83 crore a year ago.
In a separate filing, Cosmo Films said the company is foraying into pet care business.
"The board has given in-principle approval for company's foray in pet care business. Pilot launch is expected by early next year," it said.
Commenting on the development, Cosmo Films CEO Pankaj Poddar said the company is going ahead with the pilot launch in National Capital Region (NCR), investing about Rs 15 crore over the next 18 months to ascertain the viability of pet care business to launch it at a larger scale.
"The overall investment is expected to remain marginal vis-à-vis size of the existing business. Pet care business has been growing in India at 22 per cent CAGR.
"With smaller families, rising income levels and limited social lives (especially post Covid), pet adoption has increased and expected to grow many folds," Poddar said.
The business scenario is highly fragmented and there are no organized players in India offering end-to-end comprehensive solution to the customers, and Cosmo expects to fill up this void.
Pet care is a low capex business, while brand building will require some investments in the initial years, he said.
"The company believes the business will deliver high returns, high valuation and add significant value to shareholders," Poddar added.
Shares of Cosmo Films on Wednesday closed 6.75 per cent higher at Rs 480.20 on the BSE.