Cosmo Films – Diffentiated player in commodity business

I have a “mixed feeling” about this stock. Below are the reasons:

1. When the company had started to share that they aim to have 80% revenue from Specialty, there was no “semi specialty” segment, whose margins are lower than Specialty, but better than commodity. This “in between” segment was introduced later (i have not tracked the company every quarter so dont know when this introduction was done).
2. I read through the concalls from FY 2023 onwards, and felt that some product introductions got delayed, examples: heat control films, adhesives. I think that is ok as many a times there are some delays, need to give some leeway to the company.
3. Zigly, is an unrelated diversification. What was the need for this when the core business itself needed capital, and also that would have diverted management’s attention. Co. justifies by saying that it is a low capital business, or they invested very less capital, there is a dedicated business head from day one, etc. etc. Zigly is still loss making, and they have acquired another company in pet care.
4. As far as the core business is concerned, there will be ebb & flow until 2026, in terms of revenues, margins, EPS and hence the share price could be under pressure for that time. Stock is for sure down about 50% from the previous peak, but am concerned that it could still go down from here.
5. Looking at the past, the share price consolidates and tests one’s patience for a long time. But at the same time, it has given handsome returns.
6. A possibility that I imagine is that the stock could fall from here, consolidate for some time, and then when the fortunes turn, could be a multi bagger…BUT…WHO KNOWS !!!

Disc: no investment, tracking