INITIATING COVERAGE CMP: `417.70/SECTOR: PACKAGING FILMS

5th October 2016

ACCUMULATE

Shivani V. Vishwanathan Tel: +9122-66638956 [email protected] Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739 No. 14, Frontline Granduer, Walton Road, Bangalore-560001; Website: www.way2wealth.com Email: [email protected] Way2wealth Research is also available on Bloomberg WTWL

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COMPANY DETAILS KEY STOCK DATA CMP

`417.7/-

Market Cap (` Crs)

810.34

52W High/Low

`417.5/185.1

Shares o/s (Crs)

1.94

Bloomberg

CFLM.IN

NSE Code

COSMOFILMS

BSE Code

508814

SHAREHOLDING PATTERN Promoters

43.51%

FIIs & DIIs

5.08%

Public & Others

49.99%

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COMPANY OVERVIEW 

Founded by Mr. Ashok Jaipuria in 1981, Cosmo Films Limited is the 5th largest & one of the lowest cost manufacturer of Biaxially Oriented Polypropylene (BOPP) Films globally. It is also India’s largest BOPP film exporter.



Cosmo offers a comprehensive range of BOPP Films for flexible packaging, lamination, labelling and industrial applications, including specialty films such as high barrier films, velvet thermal lamination films and direct thermal printable films.



In the BOPP films space ( commodity films –> low margin) Cosmo Films manufactures tape, textile & packaging films, while in the specialty film space it manufactures thermal films, wet laminations, synthetic paper, high barrier films & coated films also finding application in packaging sector.



Cosmo Films enjoys a 20% market share in the BOPP film space & 2/3rd market share in specialty films space.



The company has 3 plants in India ( 2 in Maharashtra & 1 in Gujarat), and 2 international plants (1 in Korea & 1 in US).



Apart from a dominant share in the Indian market, Cosmo exports to more than 80 countries worldwide. Cosmo's customer base includes leading global flexible packaging and label face stock manufacturers like Amcor, Constantia, Huhtamaki, Avery Dennison etc., which service brands like Pepsico, Coca Cola, Unlilever, P&G, CP, Reckitt Benckiser, Nestle, Mars etc. Cosmo also has an extensive network of channel partners across the world for distribution of its range of lamination films.

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MILESTONES

2010 2011

2014

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BUSINESS MODEL  Cosmo Films is a B2B supplier of BOPP films as well as specialty films which find application in flexible packaging, FMCG & other industrial sectors. It has a strong presence in both domestic & global markets.  The company exports to over 80 countries. Exports contribute 50% to the topline. On a product basis traditional & specialty films contribute equally to the topline. Majority of the specialty films is exported.  The company’s product profile is as follows: Packaging Films • Print & Pouching films • Barrier films • Overwrap films

Lamination Films • Dry(thermal)Lamination film • Wet (Print) Lamination films

Label Films • Pressure Sensitive Label stock films • Direct Thermal Printable films • In-mould films • Wrap Around label film

Revenue Mix

Industrial Films • Synthetic Paper • Tape & Textile Films

2010 2011

Industr ial, 23 %

2014

Label, 10%

Packa ging, 201541%

Lamin ation, 26%

 Raw materials accounts for 64-68% of the cost of production. The key raw material for the company is polypropylene which is a step-down derivate of crude oil(namely naphtha). The company sources polypropylene from domestic oil & gas companies like RIL, HPCL, OIL and also partly imports.  Power cost has been the game-changer for the company. Cost saving initiatives lead to a structural change in the margins as the company shifted technology to a more cost effective medium and has negotiated PPA’s with various private players vs. its previous power procurement from state grids.  The company works on a cost plus model and does not benefit from lower input cost. Any volatility in crude oil prices is passed through to the client. Hence profitability for the company depends on product mix, operational efficiency, and better throughput(higher capacity utilization). Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739 No. 14, Frontline Granduer, Walton Road, Bangalore-560001; Website: www.way2wealth.com Email: [email protected]

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INVESTMENT RATIONALE

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INVESTMENT THEME

Growth Drivers

Profitability Drivers

Valuations

• Capacity expansion of ~44% to help drive volumes growth over the next two years. • Increase in share of value-added films from 50% to 60% over the next two years. • The new line is more power efficient and hence this will enable the company to lower cost of production and drive up profitability. • Expected margin expansion in the range of 100-120 bps and ROE in the range of 20-22% over the next 2 years . • The stock trades at attractive valuations of 5.8x PE & 4.7x EV/EBIDTA on FY18 estimates.

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INVESTMENT RATIONALE  Strengths & sustainability of the business model – The company has a simplistic business model and is well placed to take up the opportunities thrown open in BOPP film space over the next few years. As a B2B vendor to a renowned set of clients globally, the company has a vision of becoming the most preferred supplier by 2020 showing commitment of the team towards a brighter future. By the nature of the business the company works on a cost plus model and hence volatility in crude oil prices is passed through to the client. So in this space of a ‘commoditiesed’ business model we like Cosmo Films for 3 key reasons. 1) The company has built-in various value-drivers into its business model and is investing in R&D capabilities in a bid to drive profitable growth.; 2) the company enjoys leadership position in the value added film segment; and 3) the company’s initiatives to leverage on superior technology and focus on cost savings to create further value. The company’s business sustainability going into the future stands on these 3 pillars of strength.

Leadership Position in Value Added Films

Cost Saving and Leverage of Better Technology

R & D Focus & Innovation Step up

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INVESTMENT RATIONALE  Capacity expansion to aid in profitable growth - The company is in the process of expanding capacity at its Vadodra Plant. The company is adding a new line of 60,000 MT of BOPP films & another line of 7,200 MT of metalizer films. This expansion entails a capex of ~`200 crs. The capex will be funded through a mix of 80:20 debt to internal accruals. This expansion will boost total capacity of BOPP films by ~44% taking total capacity of BOPP films to 196,000 MT. While for the metalizer films this expansion will boost capacity by ~48% taking total capacity to 22,200 MT. The expanded capacities are expected to be commissioned by the end of FY17. Meaningful ramp up of these capacities is expected during the course of FY18. At peak capacity utilisation the new line can add ~`500 crs. to the topline. The new line being added is of state of the art technology which will enable the company to reduce cost of production per kg for it films and hence boost profitability. The new line has an extended width of 10.4 mtrs. vs. the maximum width of 8.7mtrs available in India. This feature of the new line will enable the company to reduce wastage as well as power consumption during production. The company expects the new line to consume 30% less power vs. its average consumption on existing lines. We believe the new line will help add to the profitable growth of the company for next few years. PLANTS Waluj, Aurangabad, India Karjan, Vadodara, India Shendra, Aurangabad, India Korea, Choongnam USA, Hagerstown Total Installed Capacity Future Committed Capacity Grand Total

BOPP 5 lines 2 lines 1 line

1,36,000 MTPA 60,000 MTPA 1,96,000 MTPA

THERMAL 3 lines 2 lines 3 lines 1 line 1 line 40,000 MTPA

COATING 2 lines 2 lines 1 line

METALIZING 1 line 1 line 1 line

10,000 MTPA

40,000 MTPA

10,000 MTPA

15,000 MTPA 7,200 MTPA 22,200 MTPA

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INVESTMENT RATIONALE  Value-added films contribution to increase further - The current contribution of traditional films to specialty films is at 50:50 to the topline of the company in value terms an 60:40 in volume terms. The margins of value-added films is ~1.7-1.8x that of traditional films. The company enjoys an 80% market share in labels and 75% market share in lamination films. It is the global leader in thermal coated films with 15% market share at the global level. The company is currently working at 60% utilisation of its nameplate capacity(i.e for thermal & coated) and does not intend to increase capacity till utilization touches 70%. The company is continuously innovating and helping the user industry find better fits for varied application. The company intends to increase share of value-added films to 60% of the topline over the next 2 years. PRODUCT MIX

1.7-1.8x

FY16

FY14

FY18E

40%

X

50%

40%

50%

60%

60%

Traditional Films Speciality Films Traditional films

Speciality Films

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INVESTMENT RATIONALE  Investing in R&D to drive business opportunities and feeding the innovation cycle - The company’s has over the years enabled great innovation in the industry with the help of its R&D focus. With a collective R&D experience of over 100 person years the company is well ahead in the product development curve. It was first in thermal lamination films & first BOPP player to do direct thermal print coatings. Over the few year the company has increased investment in R&D from 0.2% of sales to 0.4% of sales ( ~INR 6 crs. this year). The company is setting up two new R&D labs to further feed it’s innovation cycle and launch value-added films for varied applications. Packaging Films

Industrial Films

Sr.

Project

Application

Sr.

Project

Application

1

Cement Bags

Reduce Cement wastage and better presentation of cement bags

1

Tape Release Film

Pressure sensitive tapes Release coated BOPP liners

2

High Shrink

Very high shrinkage in both the direction for tight wrapping and provides very good hot slip property

2

Improved Synthetic papers (CSP)

With enhanced features such as quick drying (Labels, Tags, Maps, ID card, Tickets for adventure parks etc.)

3

Shig Speed, high Barrier and high sealing strength metalized BOPP and CPP Film

Metalized BOPP and CPP Film with excellent high barrier, sealing and speed

Label Films Sr.

Project

Application

1

Direct thermal printable (DTP) film and paper

Airline baggage tag, labels, etc.

Lamination Films Sr.

Project

Application

1

Lidding Film

Universal lidding film which laminates with different plastic and paper materials and has easy release

2

Improved velvet Film

Product with better creasing performance and corona retention

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INVESTMENT RATIONALE  Cost saving drive, product mix & operational efficiency to improve margins – FY16 saw Cosmo films expand margins from 6.3% to 11.8% on account of improved throughput, reduction in power costs & improved product mix. The company saw cost savings to the tune of ~`25 crs coming in on account of several energy-saving initiatives. The company implemented these initiatives in 2 of the 3 manufacturing facilities and intends to implement it in the 3rd plant in FY17. The company used to procure power from the state grid which has now been replaced with long term PPA’s with private players. The commissioning of the new line and ramp-up will enable the company to enjoy economies of scale and that to at a lower cost of production (cost savings as the new line is ~30% more power efficient vs. the existing lines). With focus on the 3 key value drivers- cost savings, product mix & operational efficiency we believe the company can improve margins by 100-120 bps going into FY18-19. EBITDA Margin 15.00% 10.00%

11.80%

8.30%

5.00%

6.40%

5.40%

FY13

FY14

13.00% 12.60%

6.30%

0.00% FY12

FY15

FY16

FY17E

FY18E

 Turnaround of US Subsidiary - The US subsidiary suffered a loss of $5mn in FY15 which the company brought down to $2.2 mn in FY16. The company upgraded its technology in the US last year which lead to a cost saving of ~$2-2.5 mn. The US operations which was primarily dependent of its thermal lamination offering has now ventured into BOPP films and coated films as well. The subsidiary is leveraging on its existing distribution channel to sell these new offerings. The company plans to leverage on customer relationships to drive growth going forward. It has taken initiatives to restructure the business in a bid to drive profitability in the coming years. The subsidiary is expected to breakeven in FY17. Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739 No. 14, Frontline Granduer, Walton Road, Bangalore-560001; Website: www.way2wealth.com Email: [email protected]

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INVESTMENT RATIONALE  Better demand supply dynamics prevalent in the industry - The historical flush of supply in 2011-2012 has endowed wisdom to the industry players. During that period new supply of BOPP films went up significantly as 6 new lines came into the market in a span of 1 year. Following the next 4-5 years the industry has ramped up the new capacity and is currently at more or less full utilisation levels. The industry has embarked on its next phase of expansion but with a gap of 6-8 months between each expansion hence giving time to each expansion to be digested. But this only till the applicable for the next two years since the lead time for expansion is 2 years.  End-user industry driving healthy demand growth & increased penetration for BOPP films - Flexible packaging has been witnessing a growth wave over the last few years in India. There has been a keen shift from PET to BOPP as the preferred choice of packaging for the end user industry. It is expected that the scale shifts in preference of BOPP films on account of its superior barrier proprieties as well as it is more environment friendly properties. India’s packaged food industry is a key growth driver for BOPP films as superior packaging enables the end-product to increase its shelf life. A per capita rise in consumption of packaged foods will drive growth for BOPP films as they are excellent moisture barrier. BOPP set to witness health12-15% CAGR growth over the next decade.

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INDUSTRY UPDATE

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INDUSTRY OVERVIEW  Globally the annual BOPP demand is estimated to be at ~7.8 mn MT and is growing at 5-6%. The global demand & supply are broadly balanced except in China.  India’s plastic industry is currently growing at 16% vs. 10% in China. India’s growth is faster on account of lower per capita consumption and a growing middle class. Packaging account for 25% of the overall plastic consumption and it is expected to grow at ~10-12% CAGR growth (2x of GDP growth).  Due to large scale expansion of capacity across the industry in 2011-12 the industry players saw a sharp decline in profitability as pricing pressure intensified due to over capacity. But now the pricing, profitability and demand supply trends have reversed.  Currently India’s BOPP production is estimated at ~500,000 MT pa. of this 390,000 MT p.a is consumed domestically while 110,000 MT p.a is exported. Cosmo Films accounts for 50% of the exports from India. In the domestic market Jindal Polyfilms (210,000 MT) & Cosmo Films(136,000 MT) account for 50% of the total domestic production.  Currently the demand-supply scenario is balanced. This coupled with higher capacity utilization is privy of a reasonably stable pricing trend. In order to benefit from this Jindal Polyfilms & Cosmo Films are expanding capacities by 30,000 MT & 60,000 MT respectively.  The key growth drivers for India’s BOPP films industry are: increase in packaged food penetration, growth of organized retail, and a trend shift from rigid to flexible packaging.  We believe Cosmo Films is well-placed to ride this wave of demand growth with its capacity expansion & product mix strategy. Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739 No. 14, Frontline Granduer, Walton Road, Bangalore-560001; Website: www.way2wealth.com Email: [email protected]

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PEER COMPARISION Co_Name

Year End Net Sales EBIDTA

EBIDTA Margin(%)

Mcap

EPS

ROCE (%)

RONW (%)

Price Earning EV/EBIDTA (P/E)

Market Cap/Sales

Cosmo Films

FY16

1620.62

191.30

11.8%

565.9

49.50

18.3

21.1

8.4

6.2

0.80

Polyplex Corpn

FY16

3180.19

353.28

11.1%

1084.35

9.08

4.84

0.98

36.7

6.5

0.34

Nahar Poly

FY16

261.77

44.85

17.1%

144

6.10

9.5

6.7

9.6

3.3

0.55

Jindal Poly Film

FY16

7225.57 1005.27

1777.47 84.76

16.0

12.2

4.5

3.38

0.25

13.9%

Competition & Entry Barriers China is the only geography where there is a mismatch in demand and supply of BOPP films. While Indian corporates do import from China it is not a significant threat to the domestic industry. Cosmo Films enjoys a sustainable entry barrier when it come to specialty films. Apart from that Cosmo is already the lowest cost manufacturer of BOPP films. With a n import duty of 10% Cosmo films is easily able to be competitive in the face of imports.

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VALUATIONS & OUTLOOK Cosmo Films Ltd. has turned over a new leaf during the last two years. The company has focused on improving profitability through various cost saving measures as well as increasing the share of value added films to its topline. Over the years Cosmo Films has gained market share across it product portfolio and emerged as a leader. The company has stepped up its R&D capabilities to further indulge in the innovation cycle to feed the growing demand of specialty films. With a Vision 2020 of becoming the preferred global brand offering value-added BOPP films the company has embarked on a capacity expansion plan. The company plans to expand it BOPP film capacity from 136,000MT to 196,000 MT (44% expansion) by the end of FY17. The new line is expected to ramp up during the course of FY18. The new line will have a better asset turnover on account of its width being larger by ~20% compared to the industry’s existing maximum standard. Also the new plant is more power efficient enabling the company to lower cost of production. Apart from this the key to driving margins higher lies with the company’s initiative to increase the contribution of value added films from 50% to 60% of the topline. THE BOPP film industry is riding a wave of the preferred packaging on account of barrier properties enabling it to elongate the shelf-life of the end-product. We expect this industry to clock 10-12% CAGR growth over next decade. At the CMP of `417.7/- the stock trades at 7.4x & 5.8x its estimated EPS of `56.6/- & `71.5/- for FY17 & FY18 respectively. The stock is trading at 5.6x & 4.7x it estimated EV/EBIDTA for FY17 & FY18 respectively. As a leader in this space we believe Cosmo Films is well-poised to take up the growing opportunities in the packaging sector. We believe the stock is attractive at current valuations and hence advise investors with a long-term investment horizon to ACCUMULATE the stock.

RISKS & CONCERNS   

Delay in expansion plans Volatility in crude oil prices Demand slowdown in user industries Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739 No. 14, Frontline Granduer, Walton Road, Bangalore-560001; Website: www.way2wealth.com Email: [email protected]

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FINANCIALS

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INCOME STATEMENT (` Cr) PARTICULARS Total Operating Income Other Income TOTAL INCOME Total Raw Material Cost Employee Benefit Expenses Other Expenditure (Net) TOTAL EXPENDITURE EBIDTA EBIDTA Margins % Depreciation EBIT EBIT Margins % Finance Costs PBT before Exceptional Item Exceptional Item PBT after Exceptional Item Tax Expense Tax Rate % Reported Profit After Tax Minority Interest After NP Profit/Loss of Associate Company Net Profit after Minority Interest & P/L Asso.Co. PAT Margins % EPS

FY15 1,646.8 8.3 1,655.1 1,151.4 105.0 286.0 1,542.4 104.4 6.3% 34.5 69.8 4.2% 39.9 38.2 0.0 38.2 10.6 27.6% 27.7

FY16 1,620.6 5.5 1,626.2 1,025.3 121.6 282.5 1,429.3 191.3 11.8% 35.7 155.6 9.6% 30.2 131.0 6.9 124.0 27.8 22.4% 96.2

FY17E 1,747.9 6.0 1,753.9 1,102.3 127.3 297.4 1,527.0 220.9 12.6% 43.5 177.4 10.2% 40.5 143.0 0.0 143.0 32.9 23.0% 110.1

FY18E 2,040.0 7.0 2,047.0 1,298.7 140.9 335.4 1,775.0 265.0 13.0% 50.5 214.5 10.5% 41.5 180.0 0.0 180.0 41.1 22.8% 138.9

27.7 1.7% 14.2

96.2 5.9% 49.5

110.1 6.3% 56.6

138.9 6.8% 71.5

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BALANCE SHEET (` Cr) PARTICULARS

FY15

FY16

FY17E

FY18E

SOURCES OF FUNDS: Shareholders Funds Share Capital Reserves & Surplus Loan Funds Deferred Tax Liability Total Liabilities

380.6 19.4 361.2 411.8 57.2 849.6

456.3 19.4 436.8 344.0 78.8 879.0

544.3 19.4 524.9 506.9 90.0 1,141.2

655.5 19.4 636.0 515.0 100.0 1,270.5

APPLICATION OF FUNDS: Fixed Assets Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash & Bank Balance Other Current Assets Loans & Advances Current Liabilities & Provisions Current Liabilities Provisions Net Current Assets Other Assets Total Assets

609.5 35.5 403.9 179.5 122.0 25.0 4.9 72.5 229.7 215.7 14.0 174.2 30.4 849.6

659.3 30.8 405.6 172.0 117.4 32.4 0.3 83.4 262.9 258.0 4.9 142.7 46.2 879.0

813.3 45.0 489.6 181.2 143.1 79.8 0.5 85.0 260.7 258.7 2.0 228.9 54.0 1,141.2

807.3 125.0 555.2 213.5 167.0 82.2 0.5 92.0 281.1 278.1 3.0 274.1 64.0 1,270.5

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CASHFLOW STATEMENT (` Cr) PARTICULARS Cash Flow from operation Profit before tax Depreciation Tax Paid Working Capital Operating Cash Flow

FY15

FY16

FY17E

FY18E

38.2 34.5 (10.6) 53.2 115.3

124.0 35.7 (27.8) 38.8 170.7

143.0 43.5 (32.9) 38.7 192.2

180.0 50.5 (41.1) 42.8 232.3

(5.5) 1.4 111.2

(85.5) (15.8) 69.4

(161.9) (35.6) (5.2)

(40.0) (45.0) 147.3

4.5 (31.3) (113.5) (8.2) 2.3 (35.0) 60.0 25.0

(4.8) 4.7 (67.9) (22.7) 28.6 7.3 25.0 32.4

(45.0) 163.0 (23.3) (42.0) 47.5 32.4 79.8

(125.0) 8.1 (29.1) 1.1 2.4 79.8 82.2

Cash flow from Investing Activities Capital Expenditure Change in other non curr assets Free cash flow Cash flow from Financing activities Equity raised Investments Debt financing/disposal Dividends paid Other items Net Working Capital in Cash Opening Cash Balance Closing Cash Balance

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RATIO ANALYSIS GROWTH RATIOS

FY15

FY16

FY17E

FY18E

Net Sales

12.2%

-1.6%

7.9%

16.7%

EBIDTA

30.5%

83.3%

15.5%

20.0%

402.9%

247.9%

14.4%

26.2%

VALUATION RATIOS CEPS EPS P/CEPS P/EPS EV/EBIDTA Debt/Networth

FY15

FY16

FY17E

FY18E

32.0 14.2 13.1 29.4 11.5 1.1

67.9 49.5 6.2 8.4 5.9 0.8

79.0 56.6 5.3 7.4 5.6 0.9

97.4 71.5 4.3 5.8 4.7 0.8

PROFITABILITY RATIOS EBIDTA Margins EBIT Margins PBT Margins APAT Margins ROCE RONW

FY15 6.3% 4.2% 2.3% 1.7% 7.5% 6.6%

FY16 11.8% 9.6% 8.1% 5.9% 18.3% 21.1%

FY17 12.6% 10.2% 8.2% 6.3% 20.2% 20.2%

FY18E 13.0% 10.5% 8.8% 6.8% 18.8% 21.2%

WORKING CAPITAL RATIOS Inventory Turnover Inventory Days Debtor Turnover Debtor Days Creditor Turnover Creditor Days Working Capital Cycle Current Ratio

FY15 9.1 40 13.5 27 9.6 38 52 1.2

FY16 9.4 39 13.8 27 6.3 58 43 1.4

FY17E 9.6 38 12.2 30 6.9 53 43 1.4

FY18E 9.5 38 12.2 30 8.2 45 47 1.4

PAT

Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739 No. 14, Frontline Granduer, Walton Road, Bangalore-560001; Website: www.way2wealth.com Email: [email protected]

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TEAM ANALYST

DESIGNATION

Alok Ranjan

Head – Research

Mahesh Bendre

AVP

Jaisheel Garg

SECTOR

EMAIL

TELEPHONE

[email protected]

+9122-6663 8950

Capital Goods, Auto, Auto Ancillary

[email protected]

+9122-6146 2937

AVP

Power, Power Equipment, Coal Mining

[email protected]

+9122-6146 2974

Shivani V. Vishwanathan

AVP

FMCG, Consumer Durables

[email protected]

+9122-6663 8956

Chintan Gupta

Research Associate

[email protected]

+9122-6663 8972

INSTITUTIONAL SALES

DESIGNATION

EMAIL

TELEPHONE

Ramanjaneyulu BV

Institutional Head – Sales

[email protected]

+9122-6146 2913

Bhavika Ravasia

Senior Manager

[email protected]

+9122-4019 2995

INSTITUTIONAL DEALING

DESIGNATION

EMAIL

TELEPHONE

Dinesh Mahadik

AVP – Institutional Sales

[email protected]

+9122-4027 8882

Mitul Doshi

Institutional Sales Trader

[email protected]

+9122-4027 8932

Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739 No. 14, Frontline Granduer, Walton Road, Bangalore-560001; Website: www.way2wealth.com Email: [email protected]

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Disclaimer Analyst Certification: I, Shivani V. Vishwanathan the research analyst and author of this report, hereby certify that the views expressed in this research report accurately reflect our personal views about the subject securities, issuers, products, sectors or industries. It is also certified that no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst(s), principally responsible for the preparation of this research report, receives compensation based on overall revenues of the company (Way2Wealth Brokers Private Limited, hereinafter referred to as Way2Wealth) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. It is confirmed that Shivani V. Vishwanathan the author of this report has not received any compensation from the companies mentioned in the report in the preceding 12 months. Our research professionals are paid in part based on the profitability of Way2Wealth, which include earnings from other business. Neither Way2Wealth nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information contained in this report. This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Way2Wealth is not soliciting any action based upon it. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any such transaction. The contents of this material are general and are neither comprehensive nor appropriate for every individual and are solely for the informational purposes of the readers. This material does not take into account the specific objectives, financial situation or needs of an individual/s or a Corporate/s or any entity/s. This research has been prepared for the general use of the clients of the Way2Wealth and must not be copied, either in whole or in part, or distributed or redistributed to any other person in any form. If you are not the intended recipient you must not use or disclose the information in this research in any way. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. Way2Wealth will not treat recipients as customers by virtue of their receiving this report. The distribution of this document in other jurisdictions may be restricted by the law applicable in the relevant jurisdictions and persons into whose possession this document comes should inform themselves about, and observe any such restrictions. 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This is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. No part of this material may be copied or duplicated in any form by any means or redistributed without the written consent of Way2Wealth. In no event shall any reader publish, retransmit, redistribute or otherwise reproduce any information provided by Way2Wealth in any format to anyone. Way2Wealth and its affiliates, officers, directors and employees including persons involved in the preparation or issuance of this report may from time to time have interest in securities / positions, financial or otherwise in the securities related to the information contained in this report. To enhance transparency, Way2Wealth has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. Disclosure of Interest Statement in Cosmo Films Ltd. as on October 05, 2016

Name of the Security Name of the analyst Analysts’ ownership of any stock related to the information contained Financial Interest Analyst : Analyst’s Relative : Yes / No Analyst’s Associate/Firm : Yes/No Conflict of Interest Receipt of Compensation Way2Wealth ownership of any stock related to the information contained Broking relationship with company covered

Cosmo Films Ltd. Shivani V. Vishwanathan NIL

Investment Banking relationship with company covered

NIL

No No No No No NIL NIL

This information is subject to change without any prior notice. Way2Wealth reserves at its absolute discretion the right to make or refrain from making modifications and alterations to this statement from time to time. Nevertheless, Way2Wealth is committed to providing independent and transparent recommendations to its clients, and would be happy to provide information in response to specific client queries.

Way2Wealth Brokers Pvt. Ltd. (CIN U67120KA2000PTC027628) SEBI Rgn. No. : INH200002739 No. 14, Frontline Granduer, Walton Road, Bangalore-560001; Website: www.way2wealth.com Email: [email protected]

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