Cosmo Ferrites Limited reports drop in revenue but expects boost from anti-dumping investigation

Cosmo Ferrites Limited, a key player in the manufacturing and export of soft ferrites and wire-wound magnetic components, disclosed its un-audited financial results for the quarter ending September 30, 2024. The New Delhi-based firm reported a slight dip in sales revenue compared to the previous quarter, with revenue from operations standing at ₹2,120 lakh, down from ₹2,237 lakh in Q1 FY25. The earnings reveal a persistent struggle, highlighted by a pre-tax loss of ₹133 lakh and a net loss of ₹197 lakh, further extending from the preceding quarter’s net loss of ₹169 lakh.

Subtle EBITDA Improvement Amid Revenue Challenges

Despite the revenue setback, Cosmo Ferrites showed marginal improvement in EBITDA, which increased from ₹67 lakh in Q1 FY25 to ₹106 lakh in Q2 FY25. The company’s management credited this to focused efforts in overhead cost rationalization. Chairman Ambrish Jaipuria emphasized the importance of recent strategies aimed at cost management and capacity utilization.

Government Investigation and Future Prospects

Amid these financial challenges, the company has expressed optimism surrounding an ongoing anti-dumping investigation into the import of soft ferrite cores from a neighboring country. This investigation, initiated at the company’s request, could potentially safeguard domestic production and profitability. Results from this probe are anticipated by December 2024, with expectations of a positive outcome potentially bolstering margins and optimizing capacity utilization.

Jaipuria conveyed that the firm has developed new, advanced products aimed at high-end applications, which are part of its strategy to increase profitability and market share. He disclosed that the company has commenced supplying components to the Indian Space Research Organisation (ISRO) and signed an NDA with CSIR-CSIO for further development in high-end applications. These steps, he noted, are critical in filling up idle production capacity profitably over time.

Efforts in Product Development and Market Expansion

Established in 1986, Cosmo Ferrites Limited is India’s largest producer of manganese (MnZn)-based soft ferrite cores, with a global reach extending to over 50 countries. The company operates a state-of-the-art production facility in Himachal Pradesh, which positions it as a significant contributor to the electronics industry. With ongoing efforts in developing wire-wound magnetic components as a forward integration strategy, Cosmo Ferrites aims to diversify its product range and boost its presence in high-end market segments.

The company’s future trajectory hinges on enhancing its operational efficiency, securing favorable trade conditions through the anti-dumping investigation, and capitalizing on newly established partnerships and product lines.

Expert Insight: Strategic Actions for Resilience

Industry analysts view Cosmo Ferrites’ strategic actions as pivotal amidst global competition and cost pressures. The anti-dumping investigation could play a significant role in altering market dynamics in favor of domestic manufacturers. Experts suggest that should the ruling lean positively, Cosmo Ferrites may see a notable uplift in profitability and long-term sustainability.