THE COMPANY
The company we are trying to study is BSE listed Cosmo Ferrites . Yes , the same company covered in this blog about 10 years back around Rs.13 .Few of my old readers may doubt why it is again now after more than 10 fold rise in its price. Changed business potential is my only answer for this question. This company belongs to the same business group that owned another listed company Cosmo Films (market cap of around Rs.2800 Cr) which is operating in packaging related business. This business group is perceived as clean and minority shareholder friendly one. Manufacturing plant of Cosmo ferrites located at Solan, Himachal Pradesh. Alisha Coils and transformers – a division of Cosmo Ferrites- manufacturing SMPS Transformers from 10W to 250W as forward integration. Citing better business prospects on account of emerging trends in user industries, company now enhancing its production capacity by 50% from 2400 MT to 3600 MT at a cost of Rs.30 Cr. As per company estimate contribution from enhanced capacity will start to reflect from first quarter of FY 2022-23. It is a fact that, so far company’s performance was erratic. Only in recent times it started to show improved performance with good profit margins that indicating changing fortunes of the company due to emerging business potential. In latest September quarter, Cosmo Ferrites reported a top line of around Rs.27 Cr, bottom line of Rs.3.51 and an EPS of Rs.3. Considering management’s confidence to enhance capacity by 50%, robust prospects of user industries like Electric Vehicle, Solar Inverters, Energy meters, Battery Chargers, Transformers ..etc it is expected to perform well going forward. At present company exporting its products to more than 50 countries. Company is a government recognized export house and as a testimony of increasing export opportunities, Cosmo's export turnover reported a robust 48% growth in latest quarter.
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