The stock of this fine iron company has been enlarged by more than 3500% in FY 22

Cosmo Ferrites shares hit a new high at 635 rupees, up 4 per cent over BSE in trade during Thursday. The stock is up more than 3,500 percent during fiscal year 2021-22 (FY22) on the back of strong earnings and a strong outlook.

The company is a leading manufacturer and exporter of soft ferrites and an emerging player in wire-wrapped magnetic components. In fiscal year 22, the market price of Cosmo Ferrites rose 3,529 per cent from the level of Rs 17.50 on March 31, 2021. In comparison, the S&P BSE Sensex index rose 19 per cent during the fiscal year.

During the October-December quarter (FY22 third quarter), the company reported 82% year-over-year net revenue growth on the back of higher volumes, higher sales and more value-added products sold from customized solutions.

Strong domestic and export demand, better sales and continuous improvement in internal efficiencies contributed to improved EBITDA (EBITDA), which was up 260% year-over-year. Ebitda’s margins expanded to 26.4 percent from 13.34 percent a quarter ago.

“There is strong domestic and export demand and we continue to develop new customers and new applications for the company’s products. We are somewhat optimistic about the overall demand in light of the government’s efforts to drive electronics manufacturing within the country and the huge potential in the export market,” the department said.

She added that the company’s expansion plans to increase the manufacturing capacity of Soft Ferrites from 2,400 metric tons per annum to 3,600 metric tons per annum are on track, expected to be commissioned in the second quarter of fiscal year 23 and will lead to higher revenue growth next year.

Meanwhile, CRISIL Ratings on Monday, March 28, 2022, upgraded its ratings on Cosmo Ferrites’ banking facilities to ‘CRISIL BB / Positive / CRISIL A4 +’ from ‘CRISIL B- / Stable / CRISIL A4’.

The upgrade reflects the shift in the company’s operational performance as evidenced by increased operations and margins. The same is expected to improve the business risk profile and thus the financial risk profile. “Positive” outlook factors Kressel Ratings anticipates that the sharp recovery in revenue and operating margin should maintain and further improve the business risk profile, Kressel said in a rating rationale. Click here for the full report

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