Cosmo First (COSMOFIRST)

FairStock Score: 53/100 — MIXED

Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Sales growth of 28.31% shows demand and scale are not shrinking
• P/E of 12.78 and P/B of 1.61 are modest, with the stock sharply below its 52-week high
• Promoter holding of 40.86% provides reasonable alignment with minority shareholders
• Latest quarter revenue of ₹899 Cr indicates meaningful operating size

Concerns

• Profit growth is -0.20% despite 28.31% sales growth, implying severe margin compression
• ROE of 7.67% and ROCE of 9.77% are modest, while debt-to-equity stands at 1.11
• Piotroski F-Score of 4/9 and FairStock Score of 51/100 point to weak or mixed financial health
• Latest quarter net profit of ₹30 Cr on sales of ₹899 Cr leaves a very thin margin cushion

AI Analysis

At first glance, Cosmo First looks like the kind of stock Graham would kick the tires on. It sells at ₹717 against a book value of ₹445, a P/B of 1.61, and a P/E of 12.78. That is not obviously expensive. But cheapness alone is not a margin of safety. I need the business to earn a decent return on capital and convert sales growth into owner earnings. Here I see problems. Sales are up 28.31%, yet profits are down 0.20%. A business cannot create lasting value if revenue races ahead and the bottom line stands still. The latest quarter sums it up: ₹899 crore of sales produced only ₹30 crore of net profit, a thin margin. ROE is 7.67% and ROCE is 9.77%, both unimpressive for a packaging company carrying debt-to-equity of 1.11. Debt is not necessarily a sin, but when returns are below a comfortable spread over the cost of debt, leverage adds risk, not value. The Piotroski score of 4/9 reinforces my caution. This is not a company flashing signs of operational health, and the FairStock score of 51/100 tells me the picture is mixed. I also note the share has fallen from ₹1,129.50 to ₹717.15, a sharp de-rating. That may be the market smelling margin compression or a cyclical downturn in packaging demand. What I do like: revenue growth of 28% suggests the enterprise is not shrinking, and a P/E of 12.78 is reasonable if raw material costs stabilise and margins recover. Promoter holding at 40.86% provides some alignment. But I would wait. I need evidence that profit growth resumes, that debt is coming down, and that the low PEG is based on real earnings growth rather than rounding or hope. This is a possible cyclical opportunity, not yet a Graham bargain.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer