Cosmo First sets 70% specialty revenue target, pivots Zigly to subsidiary
Management sets ROCE target of 14-15% for FY27, expects net debt below 2x EBITDA. Zigly moves from demerger to external capital raise.
What's new
- Specialty films targeted at 70% of revenue mix within 18-24 months.
- Cosmo Plastech EBITDA inflection expected; Cosmo Consumer >50% CAGR with ₹100 cr run-rate soon.
- Zigly strategy pivoted from demerger to subsidiary raising external capital.
Why it matters
The specialty pivot is a clear margin play — if hit, it transforms the earnings profile. The Zigly reversal is significant: external capital reduces balance-sheet risk and signals management's confidence in the asset. The ROCE target of 14-15% for FY27 implies real returns improvement from current levels.
What we're watching
- Whether specialty mix actually reaches 70% within 18 months.
- Cosmo Plastech EBITDA inflection trajectory.
- Net debt reduction to sub-2x EBITDA timeline.
The full read
Cosmo First laid out an aggressive growth roadmap in its Q4 FY26 earnings call. Specialty films — higher margin than commodity — are targeted to hit 70% of revenue in 18-24 months, a major re-rating catalyst if delivered. Cosmo Plastech is expected to reach an EBITDA inflection, while Cosmo Consumer is guiding >50% CAGR and nearing a ₹100 crore run-rate. The most notable change came on Zigly: the earlier demerger plan is scrapped; instead, the subsidiary will raise external capital, keeping it consolidated. Financially, management targets 14-15% ROCE for FY27 and net debt below 2x EBITDA in 12-18 months. A US tariff refund of over ₹60 crore is also pending. The call was rich in directional guidance, but execution is the open question.