Cosmo First Limited (COSMOFIRST) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the investor call of Cosmo First Limited to discuss the Q4 and FY '25 results. Today, we have with us from the management, Group CEO, Mr. Pankaj Poddar; and Group CFO, Mr. Neeraj Jain. Starting off with the statutory declaration, certain statements in the conference call may contain forward-looking. These statements are based on the management's current expectation and are subject to uncertainties and changes in circumstances. These statements are not guarantees of future results. [Operator Instructions] Now may I request Mr. Neeraj Jain to take us through his opening remarks, subsequent to which we can open the floor for the Q&A. Thank you, and over to you, sir.

Well, thank you. Very good afternoon, ladies and gentlemen. I'm Neeraj Jain, Group CFO at Cosmo First, along with my colleague, Mr. Pankaj Poddar, Group CEO at Cosmo First. Before I go to the financial results, I would like to mention that our financial results for the March '25 quarter and investors presentations are available on company's website. We'll first discuss a brief on the performance of the company for the March '25 quarter and year ending March '25, which may be followed by the questions. Consolidated sales for March '25 quarter is INR 746 crores, which is higher by 16% from March '24 quarter, primarily on the backing of higher specialty sales, higher BOPP margins. And we witnessed higher sales in U.S.A. and Netherlands operations. The EBITDA for the quarter has increased to INR 85 crores compared to INR 67 crores during the March '24 quarter. The improvement in EBITDA is backed by higher specialty sales, better BOPP and OpEx and margins and enhanced cost rationalization by about INR 9 crores. In fact, the EBITDA would have been even better but for two nonrecurring items. First, cost of INR 4.3 crores on shifting the thermal line from Korea to India, which should provide annual benefit of close to INR 10 crores, but we incurred this shifting cost during the quarter, which was onetime. Number two, 10% lower volume on the BOPET film line, which was a planned maintenance shutdown. Moving to full year FY '25 EBITDA at INR 362 crores is higher by INR 111 crores, which is 44% increase compared to last year, primarily due to higher specialty sales, which has grown by 10% compared to last year; number two, cost rationalization of about INR 25 crores; number three, better BOPP and BOPET film margin; and in last, improved performance of the Specialty Chemicals subsidiary. The consolidated PAT at INR 133 crores for FY '25 is higher by 115% from last year. The company is growing Specialty Films sales by close to 10% CAGR growth over the last 6 years. In line with this, FY '25 specialty growth has also been close to 10%. The BOPP film margin has been running at INR 21 per kg in March '25 quarter as against INR 21 per kg in December '24 quarter and INR 14 per KG in March '24 quarter, hence, broadly at par with the previous quarter, but better on a Y-o-Y basis. I move to outlook. The company has already invested close to INR 1,180 crores in last 3 years as CapEx on multiple growth projects, including BOPP line, CPP lines, polyester line, metallizers and coating lines, Sunshield and paint protection film and Rigid Packaging. These will yield a significant ramp-up in revenue as well as profitability in the next 2 to 3 years. Further expanding on the growth, the cast polypropylene line, which we call CPP line, with an annual capacity of 22,000 metric tons has started operations in March '25. Sunshield film has also started commercial production from May 2025. The company has successfully done pilot runs for Sunshield with 50-plus distributors, who are going to distribute both for Sunshield films and paint production films. The BOPP line having annual capacity of close to 81,000 metric tons is also expected to start operations from quarter 1 of FY '26. While for film business, the company's focus will be a key -- on taking full leverage of the new investments, growth specialty, expand in international geographies and further push down the cost, which we expect to be another INR 25 crore annualized impact. A new film lines are the most cost efficient and should make Cosmo more competitive in the market. Moving to Specialty Chemical subsidiary. The Specialty Chemical subsidiary has achieved high-teens EBITDA with a top line of INR 180 crores at FY '25. This business verticals should continue to grow backed by new innovative products and Specialty Films sale. Moving to pet care vertical Zigly, in Zigly, we have launched multiple private labels and enhanced our vet care services. Our business model is moving more towards services and private label, which is a high-margin business. Well, the Board of Directors of the company has recommended a dividend of INR 4 per equity share for the financial year '24, '25, which will be subject to approval of shareholders in upcoming annual general meeting. The debt position the company, the company's net debt is at INR 967 crores, which is 2.7x to EBITDA and 0.7x to equity. The financials remain strong. At March '25, most part of the debt related to growth is already built in the balance sheet, but returns are yet to kick in out of the majority of the CapEx. With this, we would like to take your pause, and would like to open the call for the questions, please.

[Operator Instructions] The first question is from the line of Nirav from Anvil Wealth.

I have a few questions to ask. So sir, in your opening remarks, you said that we have been growing our specialty BOPP volumes by close to 10% CAGR over the last few years. So how do you see FY '26 panning out for us in terms of specialty volumes?

When we say 10% growth, Nirav, it's for specialty sales, actually, Specialty Films sales. And still, there are several products in pipeline besides we already having the good range of the speciality films. So we are quite optimist that growth rate should be better off only in FY '26.

And you are talking this about the volumes, right?

We are referring the volume for the Specialty Films.

Correct. Correct. Sir, in terms of our total breakup of specialty versus commodity, we have already reached 71%. And at some point of time, if we are able to grow our specialty volumes by another, let's say, 10% or similar run rate for FY '26, would there be any need for further investments in the specialty BOPP? Because now our commodity line is also going online from Q1 of FY '26, so would there be a need to put up the additional capacities for specialty BOPP?

Actually, yes, because what is going to happen is we are putting the new BOPP line. Initially, the ratio maybe a little skewed on the new capacity towards the commodity. But slowly, it will move to the specialty in line with what a broad strategy the company has been following. So in line with that, we are growing the capacity of the specialty funds like the coating film and all, so -- which should help in the medium term to move towards -- more towards these Specialty Films.

Got it. And sir, when we see our commodity BOPP margins vis-a-vis that of semi-specialty and the specialty BOPP, let's presume that if commodity BOPP margin comes down, would the delta between the specialty, semi-specialty and commodity BOPP is the right indicator to track or let's say, a fall of INR 5 margin in the commodity BOPP also translate into the similar fall of INR 5 in the specialty or semi-specialty? So how that metric works?

Frankly, in our past experience, the Specialty Films margins broadly remains the same, except there may be some minor changes due to change in the mix. Semi-specialty runs with an additional delta over the commodity, but this relationship is not linear. So let us say, commodity margins moved by INR 10 or so, it's not necessary semi-specialty margin will also change by INR 10. If you change by INR 4, INR 5 or INR 6, depending on the criticality of the film. To answer your question, the special film, largely, the margins are protected. Semi-specialty changes with the change in the commodity, but margins, the -- I mean, the range of delta is lower compared to the change in the commodity part.

Got it. And sir, this 71% Specialty Films, how would the breakup look like in terms of semi-specialty and specialty?

It keeps changing on quarter-to-quarter. But broadly, you can say 50-50.

Got it. Got it. Sir, second question is on the sun-control films. I think you mentioned that we already started the commercial production. So how can the ramp-up of revenue we can see in FY '26 and FY '27?

Yes. So as well as domestic market is concerned, we have got very positive response. And we do expect that in a year, we should be doing between window film and PPF easily INR 15 crores to INR 20 crores next year itself. As far as export is concerned, we still need to do more work in terms of approaching distributors and getting trials done. So there, we see that majority of the growth will actually happen in FY '27. So we expect next year should be closing anywhere between INR 25 crore, INR 30 crores. And a year thereafter, we should exceed INR 50 crores.

Got it. Got it. And sir, in terms of the starting point, in terms of the sun-controlled films...

But another thing is that we are also planning to launch some more products. I cannot share more details. But this is becoming like a complete consumer vertical in itself, where there's a lot of focus in bringing products which are right now, either not made in India or made by only 1 or 2 players. And so we will be launching more products and create a very serious brand within the country. You can actually go to cosomoconsumer.com and see more details about it. So over the years, we will create -- so there'll be two businesses in consumer segment. One is Zigly and second is Cosmo Consumer. And we do expect that this vertical will be profitable much earlier than even Zigly because the gross margins are quite good and Zigly has lot of cost on the retail side, where here, one side, we continue to do cost reduction, but at the same time, the gross margins are good.

So what could be considered as a breakeven sales for the sun-control firms?

It should be -- see actually, it purely depends on how much marketing cost we do. But right now, we feel INR 35 crores should be the breakeven. But I mean, I don't know if you get a chance to see some of the videos that we launched this year. We've already released two videos of Cosmo Sunshield because there are a lot of awareness that we need to create in the market. Obviously, we are doing a very low-cost marketing, largely digital marketing to begin with. But we will scale up the marketing as we move along and ensure that customers are aware about such a beautiful product where the paybacks are so good, the customer comfort is involved, the green building is involved. So it's an awesome product. It is just that we need to market it really well. And the domestic markets have got a very good traction. We have created a very strong sales team, more than 60 people trying to go to every nook and corner of the country. So yes, so domestic, I feel we'll be able to crack the code faster. Export, we still need to learn more and do much more work.

So just a last bit, like since you mentioned that our focus initially would be on the domestic market, what could be the size of Indian market so far as this control films is concerned? Any ballpark idea, if you can share?

See, the window film itself is INR 400 crore market, but a lot of imports is happening from China. You may be aware, there's only one local competition who is representing just 10% market. And rest of it is coming not just from China, actually. It is coming from -- a lot of this coming from even America and Europe. So it is America, Europe, Japan, China and Korea, 5 countries where it is coming from. And as far as buildings are concerned, right now, it is happening mostly in the commercial complexes, where it is some kind of a technical selling. But consumers at large are not aware about these window films, which is what we intend to do. Automobile itself is a good segment. And we are not saying that domestic is the only focus area, export is also equally a very critical area for us. It is just that we started doing the trials in the domestic market, and we have already created a good understanding with many distributors. We are working very aggressively on the export market. And export is a much, much larger $2 billion market, where we need to create an impact.

The next question is from the line of Saransh Gupta from SVAN Investments.

Is my voice audible?

Sorry to interrupt, sir, your voice is coming very low?

Yes, I just wanted to understand, in your opening remarks, you alluded that you have invested about INR 1,000 crores of the CapEx, and all the facilities now largely onstream other than the BOPP line, which is coming up with 81,000. So just wanted to understand two things here. Earlier, we were starting with a CapEx of 67,000 tonnes of the BOPP line now, which we have upgraded to 81,000. So is there any change in the technology or the upgradation of the machinery on that part? And post the announcement of our CapEx and the capacity coming on the stream, how do you see these spreads moving on the commodity for the rest of the year?

Yes. So see, yes, during the tenure of the contract, we did change and we moved to the latest technology, which the suppliers announced. So yes, it is there. And to answer the point number two, commodity margins are very difficult to project. They keep moving up and down all the time. So we can't really comment. As Cosmo, our focus remains going in international markets and scaling up our specialty sales. So we'll continue working that part. In the short term, yes, we'll have to sell more commodity films because of the new line. But the focus is to just be there on the specialty focus.

And just to add to it, I mean, this new line is one of the lowest cost or production line available in the world. So that, in any case, should help.

Sure, sir, that's will be helpful. So definitely, the new line, once it becomes operational in the second half, we could have a little bit better margin as compared to the existing product line?

It is not going to come in second half, it is going to come in the quarter 1 itself. Most likely, it should be up and running by end of this month.

Sure, sir. And secondly, now with the majority of the CapEx is with INR 900 crores of the net debt that we have on the book, so how do we see debt movement going ahead from here? Or is there any other CapEx or strategic initiatives, which is there on the pipeline?

See, this year also, as the first questions came, we are going to spend some more CapEx this year to add to our specialty capacity. So on the specialty side, one is we are going to sweat out our existing assets, and we feel there's a potential there. But at the same time, we are adding a couple of more value addition lines in this year. So there is additional around INR 200-plus crores CapEx this year, which will be largely done through internal accruals. A year thereafter, we are not going to have that kind of CapEx. So we will see major CapEx -- major debt reduction from the next year. This year, most of the internal accruals will be used for the CapEx and the working capital increase because of the growth in sales. And next year, you would start seeing a reduction.

So sir, on the specialty, now since you are going to add up another INR 200 crores of CapEx, so the existing capacity, where we have done INR 180 crores in financial year '25, what was the peak revenue that one can get from the existing? And what is the asset turnover one can expect from the new INR 200 crores of the block?

With all the assets with Zigly, with Sunshield coming to full potential, with BOPP, CPP line to full potential, we should be -- we can potentially touch INR 5,000 crores. But this year, we are expecting anywhere between INR 3,500 crores to INR 4,000 crores sales and the year thereafter, another 10% to 15% jump. But the peaking will happen because Sunshield, we keep peaking every year. And similarly, with Zigly, it will keep growing and same with chemical where we do not invest -- need to invest much CapEx, we can still touch INR 300 crores, INR 350 crores in the current assets. So film assets will sweat out completely in the next 12 months. But as far as our other businesses are concerned, there, the full sweating will take more time. I feel [ plastic ] and film will be fully sweated within this year.

Sir, one more question. On the Nirav's questions when you indicated on the SCF that probably we'll be doing a INR 25 crores of revenue this year and 50 to 75 next year with a breakeven of 35, so is it fair to assume that this year on the Sun-control films only, there will be a net-net loss of INR 10 crores?

No, not really INR 10 crores. If we are behind our -- let's say, we are behind by INR 10 crores, INR 15 crores from breakeven sale, so there'll be INR 7 crores, INR 8 crores, INR 10 crores at best, loss from this year. And so it also boils down to how much marketing cost we incur. We are going to increase our marketing cost in a phased manner and not a blast immediately. So the losses would not be beyond INR 8 crores, INR 10 crores in any case, overall losses. And yes.

Sir, last question from my side, it's a bookkeeping question. So can you help us understanding the EBITDA contribution from the Rigid Packaging and Zigly for the full year FY '25?

So this is available on our investor presentation in much more detail.

The next question is from the line of Amit Aggarwal from Leeway Investments.

It sounds that the company is growing at such a faster pace. And still, it's very shocking that the promoters have sold 4% stake in the company. Any particular reason? Because that has been a big dampener on the [ shrimp ] market. And is there any financial transaction between the promoter and the company this year?

Yes. See, that was his personal needs. And if you had seen earlier when he had funds, we actually bought shares. But last year, he had purchased some personal assets, and he needed to fund that. And therefore, he had to sell some shares. So promoters can also have personal needs to manage their cash flows. What is your second question?

Is there any financial transaction between the company and the promoter this year, like some kind of loan to the company from the promoter or something like this?

Not really, not really.

There was in between a very -- for a few days, there was a transaction. There was a very small loan -- not small, but there was a loan which was given, and that was immediately repaid, something of that sort. It was nothing material.

And my second question is regarding Zigly. Can you think -- do you think Zigly is facing heat from the quick commerce business because they're delivering in 5 or 10 minutes, all the products? So are you tying up with any quick commerce business like Blinkit or Swiggy or Zepto?

Yes, we have tied up with them. But see, these players do not have more than 1.5% market share. See, in our pet care, the customer needs are too varied. And quick commerce is largely able to service very few products. So that is not a challenge. We are also giving omnichannel delivery to our customer. The bigger issue right now in product side is that the margins are not good enough. The suppliers are not offering good margins to any of the players. And therefore, some of our competitors and including Zigly, we are trying to move in the direction of private label so as to move the margins and also provide better quality products to the customer.

And how many stores have you right now? And can you just throw some light Y-o-Y sales growth in the stores which are quite old now?

Yes. So as far as retail is concerned or let's say, centers are concerned, in last 12 months, we have grown double. And we have right now 32 stores. On the online sales, we have significantly reduced sales because we were realizing that they were unnecessarily happening at too much losses without any building up of brand equity. So we kind of reduced our sales on marketplaces quite a bit. Our focus is growing more on our own websites and that through -- delivery through various stores, which are there pan-India. So that is the strategy we are adopting. As far as services are concerned, they should be profitable sooner than later. Product, we need to do more work because we need to introduce a lot of private labels. We already introduced multiple private labels in a few categories. And within this year, we'll be launching many more to ensure that at least we have some products in every category of pet care. So that is the direction we are taking. And so one side, we are trying to give faster delivery and reduce cost to the customers by delivering from their nearest location. And at the same time, we are also trying to improve our margins so that product at large can also become profitable in the times to come.

And out of 32 stores, how many are breakeven -- they have reached breakeven, cash breakeven? And what is the sales growth for each store, which are quite old?

Some of the old stores have started to turn breakeven and be profitable. What we are realizing is, as I said earlier, services like [ grooming ] at a pan-India level is profitable for us. Vet care, given that we have invested quite a bit in vet care in the last 8, 9 months, vet care is still not profitable, but many of the centers in Vet Care are profitable already. What is really hurting us is the product side, where margins are not coming either on online and offline, and that is purely because the supplier partners are not offering enough margins. Food is the main thing. And most of the food suppliers, they are playing really monopolistic and not giving more than 30%, 35% margins. So we are pushing them really hard one side, educating them that this way industry can't survive. But at the same time, we are looking forward to launch our own private label so that at least we can shift some of the demand from these old brands to newly created brands by companies like us.

Sir, you haven't given any sales growth for store to store, like each store?

Yes, yes. So we are -- as I said, overall at a retail level, we are growing 5% to 10% month-on-month. Some months, these are 3%, 4%, 5%, and we are growing 10%, 12% also. And in last 12 months, our run rate has doubled.

The next question is from the line of Arun Malhotra from CapGrow Capital.

Can you throw some light on the outlook for both BOPP and [ BOPET ]?

What outlook, sorry? I mean, globally, we are growing both nicely. Even in India, we are growing nicely.

So any expectations of price margins going forward? What is the supply-side scenario? Is it going to be as super profitable as we were in 2022, '23 or it's still going to be muted as it has been there in the last few quarters?

See polyester can have better margins for the simple fact that polyester last 2 years, not much capacity has come worldwide or even in India. BOPP is concerned, this year in India, there are 4, 5 lines coming up. So there may be a temporary blip. But as I said earlier that our focus is largely specialty sales. And specialty, our margins are quite stable. Whatever commodity sales we do, that definitely gets impacted by the local market.

Sure, sure. And there's one more problem which we personally have been grappling with is that the CapEx has doubled in the last 2 years, if you see. Our margins for specialty have increased and even for base films. The mix has also moved in favor of the specialty, but the revenues are almost same for last 2, 3 years. The profitability is still the same, the EBITDA and net profit actually is much lower than FY '22, '23. Our ROCE and ROE are below our cost of capital, so -- which reflects a poor allocation of capital, and we are still talking of more CapEx. So what is the management outlook on all these fronts?

See two things. First is COVID were exceptional years because global supply chains were impacted. But having said so, we have clearly stated in our media release that in last 3 years, we have done almost INR 1,200 crores of CapEx. And last year itself, we have done INR 500-plus crores of CapEx. There is no magic that the moment you spend CapEx, next year, returns start coming. It does take some time. And as polyester got installed in the FY '23, and this year, it has started contributing reasonably to the EBITDA numbers. Even in polyester, we are moving in the direction of selling more and more specialty. We have got close to 35% to 40% semi-specialty sales on polyester. We have worked on some high-end Specialty Films also, when it comes to polyester films. So these are the CapEx which are done recently, which are yet to start maturing. Once they start maturing, our revenue and profitability numbers will grow quite a bit.

And just to add to it, I mean, the ROCE is appearing subdued today because the most part of the debt related to the new growth is already in the balance sheet, but we do not have commensurate last 12 months earning out of it. So once we have all the new growth in commercialized, so that would help. And post that only, probably you will like to look at the ROCE.

Sure. And so do you think '26 or FY '27 would be the year when all this doubling of the CapEx, the move towards specialty and introduction of new products will start getting reflected, '26 or '27? We are almost done with '26. So '27?

'26 also, you will see a good growth. And '27 also, you will see a good growth. Obviously, the full utilization of our assets, especially for non-film business, will continue to happen year after year. But FY '27, the film assets will be fully utilized. And they will be greatly utilized within FY [indiscernible].

Sure. And any thoughts on the demerger of the pet care business? Are you looking at a critical size before you take that decision or more allocation, more requirement of capital and you bring in a private equity partner or an IPO? What is the thought process behind it?

We will separate it out at the right time, as we said. We had indicated that in the next 3 years to 4 years, we'll do it. So as of now, those projections are not changing. We will be doing it at the right time once we see that overall, obviously, as you rightly pointed out, that we reach a decent scale and at the same time, our losses on that business have come down significantly.

The next question is from the line of Madhur Rathi from Counter Cyclical Investments.

Sir, I wanted to understand regarding our margins or margins per kg that we can expect in FY '26, considering that this BOPP line that we are coming will be manufacturing commodity in the prior period and then move to specialty, so what kind of margin can we expect?

If I got your question right, you are asking FY '26 projected margins, right?

Yes, sir.

So as we said, I mean, on the commodity part of the business, it's very, very difficult to project the margin. For the specialty, we said, should be largely in the similar range as last year. Semi-specialty, as we said, it moves with the change in the commodity, but not in a linear relationship. If you look at holistically, since there's no much capacity expected on the BOPET side, so we expect margins should improve on the BOPET side logically. On BOPP side, there may be a few quarters when there will be excess capacity because 4, 5 lines are expected in the coming -- in the current financial year. That may temporarily have some kind of impact on the commodity part of the business. But then since the domestic demand is growing 10%, 12% year-on-year, that should bridge the gap.

Sir, if I understand a new BOPP line that will come, so just like what would be -- if you could say like till a breakeven level, you will be manufacturing commodity so that we'll breakeven. So can you expect it to at least breakeven in FY '26 and like post some margins? Or because of the commodity agreement, margins would be much lower than what we can expect from this additional capacity?

Well, I will give you a little perspective on this. So new BOPP line would minimum generate, I mean, close to 90% utilization, it will be close to 5,000 metric ton monthly sales. Even if we take the very subdued kind of the margins, INR 15 or so, it should generate INR 7.5 crores of the gross margin on a monthly basis. And fixed overhead on this line, we do not expect more than INR 8 crores, INR 9 crores on an annual basis. So just wanted to give a slight perspective that with that kind of the capacity coming and that too at a lower cost of production, it should add to the bottom line significantly once it's operational fully.

Okay. So minimum INR 70 crores, INR 80 crores is a conservative side we can expect to add in next year. Sir, I wanted to understand, next question, regarding like -- sir, just a clarification. Sir, in PPF, we expect a INR 15 crores to INR 20 crores revenue in FY '26. Is that right?

So what Pankaj said is sun-control film and PPF taken together, close to -- we are looking at close to INR 25 crores in FY '26.

That's the combined number. And 50 to 75 for FY [ '26 ], that is the combined number as well?

Yes.

The next question is from the line of Saket Kapoor from Kapoor & Co.

Sir, just correct me, you mentioned that the expanded capacity and at optimal utilization, we will be clocking revenue to the tune of INR 3,500 crores to INR 3,700 crores for FY '25, '26. And that is including the [ BOPP ] that will get commissioned and stabilized by the first quarter first quarter onwards.

That's right. So we said, I mean, between INR 3,500 crores to INR 4,000 crores, that kind of revenue we should be able to generate in FY '26.

And sir, in your presentation, you have mentioned about -- you have given the EBITDA numbers business vertical-wise for FY '25. So -- and it is mentioned there the reported EBITDA at 12.5. And then you have given the segregation for specialty, pet care, Rigid and packaging. So post the contribution margins improving from the Rigid Packaging and also from the specialty and also with the addition of the new lines in the BOPP segment, how should this margin trajectory on a blended basis or segment-wise basis should look like for the current financial year? What kind of trajectory should we expect?

So there is going to be a significant ramp-up in film because we are adding significant capacity in FY '26. The other verticals would also grow like the Specialty Chemicals, Zigly and Plastech and of course, the sun-control film now. But the ratio, if you look at it on a comparative basis, since numbers are much larger in film, so it may a little look skewed towards the film in FY '26. But over a period of time, as Pankaj said, we are looking at -- I mean, once it has close to reasonable kind of the size on the new business vertical, out of -- we are looking at close to INR 5,000 crores of top line, with 18%, 20% revenue coming from the new business verticals.

Can you come again, sir? INR 5,000 crores after -- I missed, there was a drop in line.

[indiscernible] revenue with 18% to 20% from the new business verticals other than...

So the blended EBITDA margin, which we posted, I think, of 12.5% for this financial year, this should go -- this should trend in what trajectory, sir, for this current financial year?

It would be very [indiscernible] for us to project that at this moment. But -- I mean, we can discuss, not an issue. You may like to write it to us at the given e-mail ID in our investors presentation.

Okay. Sir, we are also going to do further CapEx of INR 200 crores for this financial year. So that will also add to any sales capacity? Or where will this CapEx be attributed to?

So as you said, we are adding capacity on the specialty side, Specialty Films side. So these will be value add kind of the Specialty Film over the BOPP or the BOPET.

Right, sir. And lastly, sir, this INR 584 crores closing CWIP balance will get capitalized with the commissioning of our BOPP line by the end of the first quarter itself? Or if you could just give the timeline when are we going to capitalize this amount?

We expect within this current quarter only.

The entire closing balance of INR 584 crores will get capitalized. That is totally attributed to the BOPP only?

Sorry, what is INR 584 crores you are referring to?

INR 584 crores is the closing balance as on 31st March in the capital work in progress. So with the capitalization of the BOPP line, how much -- what amount will get capitalized?

So out of that, larger part is BOPP film, which we are going to commission in the current quarter 1 only. And second part is the sun-control film, which in any case, we have already started the commercial production starting from the May.

The next question is from the line of Vipulkumar Shah from Sumangal Investment.

So what was the GMV of pet care business for the whole of the year? And at what revenue rate that business will breakeven?

So on the first part, currently, we are running INR 5 crores of the monthly GMV for Zigly operations. It's very difficult to project at this point of time whether breakeven will be at X amount or the Y amount. It will depend on a lot of factors. How much we are spending on the marketing, on the branding? Whether the large part of sales is coming on the retail, private label services? So a little difficult at this point of time. What we are looking at now is focus more on the growth, more particularly the private label sales, which has high margins; and services revenue, which again got very high margins. So company's focus is, first, at this moment, grow these verticals much more, which, in any case, will translate to profitability in the years to come.

So can you split Zigly sales between products and services? So what was the -- because services carry, you said, a little higher margins as compared to products. So if it is possible, please split the Zigly sales into products and services.

60-40.

60 in favor of products?

Services 60, 40 products.

Service 60 and 40 products?

That's right.

Okay. And sir, this BOPET line, it is entirely for specialty? Or in BOPET also, we manufacture commodity films also?

Right now, we do a mix of semi-specialty and commodity. And in the times to come, our focus is to move more and more specialty. So close to 35%, 40% is somewhere between semi-specialty, specialty products.

So 60% BOPET is commodity, right, sir?

Yes, yes.

And out of our total specialty and semi-specialty volume, what should be the split of exports versus domestic?

Specialty is mostly exported. So domestic also has some specialty market.

So that is my question, sir. So if you take specialty -- sorry?

Right now, we do close to 55% to 60% exports. And most of it is specialty.

Okay. And sir, my last question is you mentioned about -- you are starting a new vertical Cosmo Consumers. So can you share more details what type of products are there? What type of investment it will be required in this business?

One is window film and second is paint protection. Window film investment will be paint protection -- I mean, window film complete investment has been done. Paint protection, we may have to do some small incremental investment, but that's not large. We are launching some more products, which does not entail too much of investment again. So investment would not be so much of a concern. It is basically building a brand. It is more about marketing cost and capturing market.

So you have renamed this Sunshield and paint protection film as a Consumer business, right?

Yes, yes. I mean the brand name for window film remains Cosmo Sunshield. And similarly for PPS, remains Cosmo PPF. But we have created an entity above that, which is Cosmo Consumer, which will represent more and more consumer products.

And in your presentation, the market for this paint protection film -- for car paint protection film is just INR 10,000 crores -- 10,000 cars. So am I missing something? It's a very small number. So why we have started this business?

No, it is much bigger. In every car, the value of the paint protection film is INR 1 lakh or above. So market is quite big. I mean, it's not a small market.

Okay. So content is very high per car?

Yes.

Ladies and gentlemen, that was the last question for today's conference call. I now hand the conference over to the management for closing comments.

To summarize, the company's specialty sales has increased by close to 10% in FY '25. And we expect similar trend to continue in FY '26, which will strengthen the business model. For film business, company's focus will be on taking full leverage of the new capacity, grow Specialty Films sales, expand in international geographies more and further push down the cost. Among new business verticals, Specialty Chemicals is already making high-teens EBITDA. The other verticals should also follow the profitability. While Zigly may take some time to become profitable, our should be a significant value creator. So in the last, I would repeat the statutory declaration. Certain statements in this con call may be forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. These statements are not guarantees of future results. Thank you. Thank you to all of you for joining.

Thank you. On behalf of Cosmo First Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.