Cosmo First profit jumps, but costs cut operating margin
Net profit benefited from a negative tax rate and higher other income as revenue grew 19.07% QoQ.
Filed 03 Nov 2026, 16:22 IST · after market close · Cosmo First Ltd (COSMOFIRST)
Key takeaways
- Consolidated revenue grew 19.07% QoQ, but expenses grew faster at 20.85%, narrowing operating margin by 1.32 percentage points.
- Net profit rose 83.40% QoQ, helped by a tax rate of -0.40% versus 24.01% and other income equal to 34.12% of pre-tax profit.
- Operating margin at 10.34% was 0.69 percentage points below the 11.03% median for 108 reported Industrials peers.
Price around the results
Revenue momentum did not translate into operating leverage
Cosmo First’s consolidated revenue increased 19.07% QoQ, while operating profit grew only 5.62%. Expenses rose 20.85%, outpacing revenue and reducing operating margin from 11.66% to 10.34%, a 1.32 percentage-point decline. The company told analysts that Specialty Chemicals delivered over 80% year-on-year topline growth with a 23% EBITDA margin, while Cosmo Plastech reported over 90% year-on-year topline growth with 8% EBITDA in Q2FY27.
Tax and other income amplified the profit increase
Net profit rose 83.40% QoQ, well ahead of the 38.82% increase in pre-tax profit. The tax rate fell by 24.41 percentage points to -0.40% from 24.01%, while other income rose 203.44% and accounted for 34.12% of pre-tax profit. Interest expense also increased 4.33%, adding to the pressure below operating profit.
Margin sits below the Industrials peer median
The 10.34% operating margin was 0.69 percentage points below the 11.03% median among 108 Industrials peers that had reported the quarter. Sequentially, margin moved lower despite the 19.07% revenue increase; the available trend shows a decline from Q1FY27’s 11.66%, rather than a multi-quarter pattern. Results were filed after market close, so there is no reported market reaction yet.
Management links expansion to specialty and packaging growth
Management said the company is targeting 10% CAGR growth in specialty films, including new capacity, and expects to reduce net debt substantially over the next two years. It said a chemical-coated film expansion adding 16,000 MT of annual capacity is planned for H2FY27, while Cosmo Plastech plans a nine-layer barrier-sheet line with 10,000 MT of annual capacity. Management also said net working capital increased by Rs 148 crore because of higher raw-material prices after the West Asia war.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹1,388 cr | ₹1,166 cr | +19.07% |
| Other income | ₹34 cr | ₹11 cr | +203.44% |
| Expenses | ₹1,244 cr | ₹1,030 cr | +20.85% |
| Operating profit | ₹144 cr | ₹136 cr | +5.62% |
| Operating margin (%) | 10.34% | 11.66% | — |
| Interest | ₹40 cr | ₹38 cr | +4.33% |
| Depreciation | ₹39 cr | ₹38 cr | +2.59% |
| Profit before tax | ₹98 cr | ₹71 cr | +38.82% |
| Tax | ₹-0 cr | ₹17 cr | — |
| Net profit | ₹99 cr | ₹54 cr | +83.40% |
| EPS (₹) | ₹37.98 | ₹20.71 | +83.39% |
Operating margin of 10.34% compares with a Industrials sector median of 11.03% across 108 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Specialty Chemicals posted over 80% year-on-year topline growth and a 23% EBITDA margin in Q2 FY27.
- Cosmo Plastech reported over 90% year-on-year topline growth and 8% EBITDA in Q2 FY27.
Guidance & outlook
- The company expects to reduce net debt substantially over the next two years.
- The company targets 10% CAGR growth in specialty films, including new capacity.
- Cosmo Plastech has a FY30 revenue target of ₹350–400 crore and targets double-digit EBITDA and ROCE.
Expansion
- The company is investing in a chemical-coated film expansion adding 16,000 MT annual capacity in H2 FY27.
- Cosmo Plastech plans an H2 FY27 expansion with a nine-layer barrier sheet line offering 10,000 MT annual capacity.
- A strategic coating line at Chhatrapati Sambhajinagar is tentatively scheduled for commissioning in H2 FY27 with 16,000 MT capacity.
New initiatives
- Cosmo Consumer began brand building through television advertisements from July 2026.
- Cosmo Consumer expanded its automotive presence by launching the 4C Cosmo Car Care Centre.
- Zigly is pursuing sustained growth and ecosystem expansion to unlock value in its petcare vertical.
Problems & risks
- Net working capital increased by ₹148 crore due to higher raw material prices after the West Asia war.
- Specialty film share declined in FY26 because newly commissioned BOPP and CPP lines initially produced more base films.
- Specialty margins per kilogram fell in FY24 because of changes in sales and customer mix.
What to watch
- Whether operating margin recovers from 10.34% toward Q1FY27’s 11.66%.
- Whether other income remains below its 34.12% share of pre-tax profit.
- Progress on the 16,000 MT chemical-coated film and 10,000 MT barrier-sheet expansions cited for H2FY27.