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Cosmo First Ltd
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Ladies and gentlemen, good day and welcome to the investor call of Cosmo First Limited to discuss the Q1 FY '24 results. Today, we have with us from the management Group CEO, Mr. Pankaj Poddar; and Group CFO, Mr. Neeraj Jain. Starting off with a statutory declaration. Certain statements in the conference call may be forward looking. These statements are based on management's current expectations and are subject to uncertainties and changes in circumstances. These statements are not guarantees for future results. [Operator Instructions] Please note that this conference is being recorded. Now may I request Mr. Neeraj Jain to take us through his opening remarks, subsequent to which we can open the floor for the Q&A. Thank you. And over to you, Neeraj J.
Well, very good afternoon, ladies and gentlemen. I am Neeraj Jain, Group CFO at Cosmo First Limited, along with my CEO -- Group CEO, Pankaj Poddar. We will start the call with a brief on the performance of the company, which may be followed by the questions. The export market during the June 2023 quarter showed signs of improvement with better specialty sales. Overall, specialty volume for the June '23 quarter was about 65% of the company's total BOPP volume, which on a comparative basis number was 62% last year. Towards the end of the June '23 quarter, there was sharp correction in the prices of the raw material, which caused non-repetitive inventory loss of about INR 20 crores during the quarter, although now the raw material prices got stabilized from July '23 onwards. During the quarter, the BOPP demand has started picking up. We are hopeful that the demand-supply balance should get restored in the coming quarters. In case of BOPET, where the supply is far in excess of the demand, it may take many more quarters for the supply-demand gap to get bridged. Accordingly, BOPET margins are likely to remain under pressure. Cosmo, with over 2/3 of its revenue coming from specialty film could withstand the margin pressure to a large extent and very clearly outperform the industry once again. BOPP film margin has been running close to INR 10. [ Here ] margins means the gross margins, INR 10 per kg during the June '23 quarter compared to INR 10 per kg during the March '23 quarter and INR 40 per kg during June '22 quarter. As you know, this is quite low compared to the average historical gross margin which has been in the range of INR 25 per kg. It may please be noted that, even in such a challenging market, company's specialty margins remained broadly intact in line with the last year, except for some changes due to product mix change. While the commodity margin has come down broadly to 1/4 of last year margins, specialty margins largely remained firm. [ Selling ] specialty margin has also come down by close to 30% compared to last year. We have provided more details about it in company's investors presentation uploaded on company's upside. With an objective to promote sustainability and rationalized costs, the company is looking for sourcing more than 50% of power through renewable sources. In this direction, renewable power has already started for company's largest plant in Gujarat during quarter 1 and is expected to get started for the other 2 plants during FY '24. Besides promoting sustainability, it will facilitate company's core specialization in a material way. While coming to outlook, the company expects position to improve in the coming months, bringing an end to quarter-to-quarter decline phase which has been happening from last couple of quarters. There is already marginal uptick in the margins witnessed in July 2023 which is continuing. Besides specialty sales, the company shall focus on various cost rationalization initiatives during FY '24, aggregating close to INR 50 crore to INR 60 crore annualized impact. We continue to build our specialty film portfolio by adding specialty polyester films, including shrink label and sun shield films, which would further strengthen company's overall margins; and also ability to withstand the margin pressure, if any, in the future. The company will continue to build its specialty products portfolio and maintain its lead over the industry. Coming to June '23 quarterly financial results. The consolidate sales for the June '23 quarter is INR 658 crore, which is lower by 8% compared to March '23 quarter. Although stand-alone volume remained in line with the previous quarter, the drop in consolidate sales is mainly due to higher intra-group sales elimination, which is sales from India to overseas subsidiary; and some temporary lower volume in subsidiaries. The EBITDA for the quarter is INR 55 crore compared to INR 74 crore in March '23 quarter. This drop is largely because of the inventory loss which we have already discussed. At the end of March '23, the company's return on capital employed and return on equity stands at 16% and 20%, respectively, which is very clearly on the leading side in the industry. Moving to flexible packaging growth projects. Work on BOPP and CPP line is progressing in line with the plans. Both the lines will be world's largest production capacity lines and will increase company's production capacity by close to 45% to 50% in a phased manner by March 2025. With high-speed [indiscernible], it will rationalize costs of production between 3% to 5%, depending on the product. The CPP line and BOPP line will promote sustainability, as it will offer monolayer structures. Coming to company's subsidiary specialty chemicals. The specialty chemical subsidiary is all set to launch newer adhesives during second half of FY '24. Now adhesives, along with the masterbatches and coating verticals, will drive future growth for the company's subsidiaries. Moving to Petcare vertical Zigly. The company's direct-to-consumer Petcare vertical which was launched under the brand name Zigly is progressing in line with the plans. The current monthly GMV run rate is close to INR 3 crore, which is targeted for 10x growth in next couple of years. Zigly has [ found ] now more than 24,000 customers, with 1/3 repeat customers. The acquisition of Petsy, which is online venture in the Petcare space which we have announced earlier, is complete now and would further accelerate company's growth into Petcare. Overall, Zigly is all set to make substantial impact to India's Petcare industry. Moving to key items on the balance sheet side. The company is looking for close to INR 500 crore of CapEx by March 2025, in phases, which will be largely on the value-add CapEx on the BOPET line [ with the ] technical films, CPP line, BOPP line and some CapEx in specialty chemical and Zigly. The company's net debt now stand at close to INR 477 crore, which is 1.4x of net debt-to-EBITDA and 0.4x to -- net debt-to-equity. I think those were the updates from the company side on the quarterly results. Now we would like to open the call for the questions, please.
[Operator Instructions] The first question comes from the line of Nirav J. from Anvil Research.
Sir, I have 2 questions. Sir, one is on the size of Indian BOPP industry, so if you can just walk us through in terms of the current capacity and the demand. How much capacities have been added over last 1, 1.5 years? And how much are expected to be added over next 1 year? So if you can just walk us through that.
Yes. The BOPP capacity right now is close to, I'm saying, producible output here. It's close to 75,000 tonnes per month. And domestic sales, depending on month-to-month, varies from 52,000 tonnes to 58,000 tonnes. And export is close to 15,000 to 20,000 tonnes. We talk about BOPP market. It is largely balanced. Obviously, in some months in the domestic market, it's a bit dull for either seasonal reasons or something else. And in the same months, if export is less, then we see some pressure on the margins; and otherwise, not. I mean things are obviously improving month-on-month. As far as the BOPP capacity is concerned, in last -- since '21 because from -- I think there was not much capacity added in '18 and '19.
Yes.
From '21 onwards, there are 4 lines which have been added in the domestic industry. And their producible output should be close to 1 lakh 60,000 tonnes, so per annum, which means roughly 13,000, 14,000 tonnes have been added. If I talk about polyester: Polyester also has a capacity of around 80,000 tonnes, almost similar numbers. However, export market is quite impacted for the time being, and therefore, the overall export has gone down. And polyester, obviously the new capacity added is much more because, if I recall, there are close to 10 lines which have been added since '21. And there the producible output which has been added is close to -- annualized, this is 3.5 lakh tonnes, which is 30,000 tonnes per month. So in case of polyester, certainly there is an overcapacity of easily 10,000 to 15,000 tonnes per month. And we feel that it will take anywhere between 1 year, 1.5 years to get this capacity fully utilized.
Got it. And sir, for the BOPP, do we see the capacity additions happening over next 1, 1.5 years, in terms of newer lines being announced by the players? So what's the outlook over there?
In 1 year, there is no new line. In 1.5 years, there will be 1 line if it does not get delayed. And in, let's say, 21 months, Cosmo line is also getting added.
And sir, these operational capacities, what you mentioned. We should assume close to 70%, 75% of their installed capacity. Or how the metrics works there...
Yes. Broadly it is 75% of -- I mean it can change here and there. So it's -- normally stays between 70% to 80%.
Got it, sir. Sir, second question is on the cost savings which you alluded in your opening remarks. So where you mentioned that one of the largest plant of ours, in Gujarat, has now been on 40% renewable power. Two more would be installed. So I was just going through our annual report. And our power cost in FY '23 was close to 168 crores. So once we are installing our lines on renewable power and 50% of our power will be then coming from the renewables, what sort of cost savings could happen here? And you mentioned some figure of INR 50 crores to INR 60 crores also on an annualized basis in terms of the overall cost savings. So if you can just break it down between how much of the savings could come from power side. And how much could be the other cost savings? And where we are actually working for these cost savings.
Almost 70% of this will come from power cost savings through multiple initiatives. One large initiative is moving to renewables. And 30% would largely come from raw material and some other minor initiatives.
Got it. So when can we see the impact of this INR 50 crores to INR 60 crores accruing to us on a sustainable basis? So could it happen next year? Or could it happen for H2 of FY '24? If you can just walk us through the time line in terms of these benefits of cost initiatives.
So they will accrue in phases. One phase will accrue from quarter 2 already. It has started accruing. And within 1 year, all of this will start accruing in the P&L.
The next question is from the line of [ Aditya Rathi ] of Aequitas Investments.
Sir, my first question is related to the specialty margin. So if we see the average of FY '23 compared to the Q1 average, the margin has fallen down. So if you could break it up for us as to the reasons why the margin fell. And how should we see this trending going forward?
[ Yes. So see ], specialty, there is no margin fall at all. There is only -- we had earlier mentioned that export market in last 2 quarters was quite disturbed because, in the earlier quarters till July, importers outside India, they had imported more films from us in anticipation of COVID-related disturbances. Post August, we started seeing some decline in export volumes. Most of it got corrected by March. However, only one set of customers -- one set of product lines, we still see an impact there, so there is a slight impact in the mix. Or basically one set of product line is not ordering still. The customer is very much intact. Rest, everything is back. So if you're really asking specialty films, there is absolutely no impact to our margins. Semi specialty, we have always stated that it declines to some extent or it goes up to some extent in line with the commodity margins. So semi specialty margins have actually come down from last year by 30% from INR 55 to INR 38, so there is impacts on the semi-specialty margin, but when it comes to specialty, there is absolutely no impact. Now the good news is, the previous 2 quarters, the new growth was also curtailed because importers generally were saying that, "Look. We have too much of inventory, so we do not want to talk about new business," but we have started seeing already some good movements from May and June. And a lot of new additions are expected to happen within next 6 months. So the specialty sales, which was growing for more than 25 quarters, had a decline starting from July quarter, July-to-September quarter. We already have seen a good improvement in April-to-June quarter, but we still not have surpassed our highest. And we feel that, that trend is already reversed now. And sales team has traveled extensively in last 4, 5 months because customers are looking back to normalcy and putting new orders, putting -- testing new films, testing new solutions. So we see that specialty films which was not growing in last 2, 3 quarters will start to grow again.
Great, perfect. And sir, the customer that you mentioned that one -- has not come back, any indication from them when they will be back?
Yes. They have given us an indication of August, September. The sales team is continuously talking to them. I'm going to personally talk to that customer; and try and understand what is the situation, why is it taking so much time, but as of the current discussion that sales team had, we are talking about August, September.
Understood, sir. And my second question is related to the CapEx announcement which came just 2 days back. So just needed some clarification with respect to this, when we announced 55 crore for sun shield and the second capacitor 32 crores. So is this part of the 100 crore value add on BOPET that we had earlier announced?
The capacitor has nothing to do with the value add of BOPET, but [ both the film ] certainly has.
Okay. So out of the 100 crore, 55 crore is this. And the 32 crore is the additional CapEx that we...
As also we had announced earlier, that is similar to BOPP, but there we will buy the film. Most likely we'll import the film [ then do the ] specific value add to it and sell in the market.
Understood. And sir, the third one, rigid packaging. So what are we planning to do in that?
Rigid packaging is very similar to the flexible packaging. We will have same set of customers. The only difference is we will have much more business with the brands on the flexible film, where those are businesses with the brands but we end up selling to packaging companies. Here there will be direct interaction. There will be similar kind of raw material. And there are a lot of inherent strengths of this business, but it is very similar to flexible film, this flexible and rigid. But we'll be -- obviously work with very few [ companies ] in the world who will have both solutions for flexibles and rigid. And as a part of this, we'll make containers for the food industry.
Okay, okay, so what's the kind of revenue and margins that we are looking in this particular business going forward?
It's a new business, to be honest. It will initially take some time to scale up because there'll be again detailed set of [ trials ], printing element and design element which is involved into it, but once it starts to scale up, I mean, the current capacity that we put up to begin with can give us a revenue of 100 crores to 125 crores. And we feel that this business can have a -- given that we'll be initially still small in this business, will give us close to 15% EBITDA levels.
[Operator Instructions] The next question comes from the line of Harsh from HDFC Securities.
So I had a question considering the addition of 2 new lines this year and anticipated arrival of 5 more lines next year, along with the current demand scenario. So could you please provide your perspective on how to assess the outlook for this industry?
We never said that there are 5 new lines coming up next year. We said only 1 line will perhaps come in 1 to 1.5 years. The BOPP industry had some oversupply in last 3, 4 quarters. 1 was that the entire outlook was a bit down. Exports were down. The domestic market was also. Especially, the textile market was really under pressure. We see already an improvement in both the export market. And some initial improvement has started coming in the textile market, so we now see demand-supply quite reasonably balanced. There may be still slight oversupply in the BOPP as such. And we do not expect BOPP to remain oversupplied even in the next 1.5 years or even in, let's say, 2 years. When we talk about BOPET: There is clearly an oversupply of 10,000 to 15,000 tonnes per month, which will take 12 to 18 months, but we do not have much of an exposure in the BOPET. We are largely a polypropylene-based supplier than a BOPET supplier.
Right. And on the recent announcement on the expansion. So is the new facility coming in -- the new capacity coming in our existing facility? Or is it a greenfield?
It is coming in the same facility, the new capacity.
Right. And additionally, sir, if you could help me with the debt number as of June 2023. And how do we expect it to move forward?
Yes. It is around 450 crores net debt.
Net debt is around 450 crores, okay.
And I mean obviously, over the next 2 years, we have incremental CapEx of close to 400 crore, 450 crore. We expect a large part of it to be funded from internal accruals. The overall debt may go up from 450 crores to some extent, but obviously that is dependent on what kind of profitability numbers we'll have in next 2 years.
Right. And sir, on specialty chemicals, if you could share the status of, current status of the business. And how is the market shaping up?
[ Yes. See ]. These are a lot of innovations that we are doing in Cosmo specialty chemical. We have -- last year, did a revenue of close to [ 170 crores ], within the second year. And we continue to make new products. We are -- I mean it is still something that we have been testing the market for last 1 quarter. We expect that this will commercialize within next 3 months. And I mean -- and this could be a large business for us in the years to come, and so is the coatings, but this is still early days for this business because there is so much of innovation required. This business is not so much CapEx. This is pure innovation business.
The next question comes from the line of Bhavesh Chauhan of IDBI Capital.
Sir, in terms of Zigly, when do we expect it to become profitable at operating level?
This should take us -- I mean, obviously, consumer businesses are very hard to predict, but we feel in a 2 years' time, '25, '26. In some quarters, we should start to make money. But the good thing is quarter-on-quarter or month-on-month, we are seeing a ramp-up in revenue. And now we feel that we've understood this business fairly well. And we feel that now the growth should happen even faster, because initial 1.5 years, we had to do a lot of trials, we had to make sure that we make our business model perfect. And now we feel that we have reached to a reasonable conclusion in terms of what is the perfect or the best model for us and how we are going to scale up. We're already seeing a good quarter-on-quarter growth, and we feel that this growth will even become faster.
So sir, in terms of -- it's an unrelated business compared to our -- when you compare our BOPP or even BOPET business. So when should we expect that some sort of a demerger happen? Is it that the management thinks that it only after it becomes profitable, we might look to demerge or something like that?
You are more or less right there. Though we have earlier said that within the calendar year '25, we would look to demerge. But yes, I mean, ideally speaking, we would like to demerge, then we will be kind of a breakeven situation and which we feel that in the calendar year '25, we should start to hit the breakeven numbers.
And sir, lastly, in terms of BOPP spread, do you think it be a bottom out?
Sorry?
In terms of BOPP spreads, do we feel that it's now -- the margins have bottomed out?
Yes. In fact, if you see media announcement, we have clearly stated it expects growth to be behind.
Yes. So this -- how is July, August, shaping up, sir?
This is looking better for sure. But yes, things are getting better.
The next question is from the line of [indiscernible] Singh of CCIPL.
So I just want to understand in terms of how the market conditions are currently, we are sitting in August right now. So what kind of outlook do we see for FY '24 in terms of top line and bottom line. And as we see that the worst is behind in terms of margins, so I mean, what kind of margins can we expect overall for FY '24?
We normally don't like to give forward projections, any which ways now the new CD regulations doesn't allow us to comment. But I think quarter-on-quarter, we do expect that worst is behind and there should be improvements.
Okay. So I mean, without giving any guidance in terms of revenues, I mean, would will be able to maintain the revenues we achieved in FY '23? Or do we expect, I mean, some sort of growth over that?
See, if we really -- our volumes are already growing. Because last year, we added BOPET line. So volumes are growing, but what really happened is that the raw material cost has really gone down tremendously. And given that most of our volumes are linked to raw materials, close to, I would say, -- I mean 60% to 65% of our volumes are linked to raw material. And therefore, if the raw material comes down, our revenue also comes down.
So in volume terms, our revenue is already going up it is just that temporarily the last quarter ramping prices really went down quite a bit. And what we see is even the raw material prices have bottomed out and now they should only go up from here. So therefore, even the revenue numbers should go up in the next quarter.
Got it. So I mean, directionally, I mean, if we look at FY '23, we had around 12% EBITDA margins. So I mean, directionally, since we are saying that the worst is behind us. I mean can we expect at least last year's margins this year? Or I mean, how -- looking at the market conditions currently, I mean, how do you expect the margins to be [indiscernible] to be.
See, obviously, our EBITDA margin last year was 14%, but I don't know if you're excluding other income to add that. So most of our other income is linked to business. But irrespective, as I said, it's very difficult to forecast numbers, but I will repeat myself that we expect the worst to be behind us.
The next question is from the line of Vipul Kumar from Sumangal Investments.
So can you view the revenue and EBITDA figure for Petcare vertical this quarter?
Yes, we have already given in our media announcement that we've already started touching our gross sales of INR 3 CR in the last quarter, and July was even better and we expect other season to be better. So it's month-on-month increasing.
No, no, the INR 3 crores is the monthly run rate of revenue, but what about EBITDA, sir?
What about?
EBITDA. EBITDA level.
Yes. EBITDA levels right now, obviously, we are making losses. And as we said that it will take us minimum 2 years to be profitable.
But can you share the EBITDA level, please?
Yes. Right now, we did around roughly INR 7 crores of losses.
That is a net level or EBITDA level, sir?
EBITDA level.
Okay. And sir, can you split your 65% specialty sales into specialty and semi-specialty?
Broadly, it is 50-50, slightly skewed more towards specialty than semi-speciality.
The next question is from the line of Nihar Dave from Vallum Capital.
I just wanted to ask, so in the previous quarter, you had mentioned that close to 75% of our [ CSC ] is being used internally. So are we -- what is the change that we are expecting on that? And what kind of cost savings are we looking to make once CSC starts expanding?
See, right now, most of the new sales will happen in actually external, and there may not be as much internal. Whatever internal we had to do is already happen. So now the new group would actually come from external sales. Whatever cost in the group level had to happen has already happened. And what is really happening in CSC is that we are having the savings, at the same time, we are investing in our future.
So last year also we had a very small EBITDA, a year before also, I mean, these are all single-digit EBITDA numbers that we had in the last 2 years. And the EBITDA numbers are right now lower for CSC because of the reason that we are investing a lot in the future growth. So we have a very strong R&D team. We already have manufacturing and sales team. So there are a lot of fixed costs, which is taking away some of the investment for future growth.
Okay. Got you. And my second question is can you give me the revenue contribution for specialty, semi-specialty and commodity prices?
It clearly fluctuates a lot from -- we give in terms of volume terms what are the percentage to overall sales, but it fluctuates a lot from quarter-on-quarter, because commodity prices keep changing a lot.
Okay. Got it. And sir, my final question is, what is our concentration in terms of countries as far as our exports is concerned, because I see U.S., Mexico and Germany and U.K. are a major destination for us, if I'm not mistaken?
We are a very well-known global brand. That is the reason we have customers in more than 100 countries.
[Operator Instructions] We have a next question coming from the line of [indiscernible], he an individual investor.
Pankaj, I wanted to understand the inventory loss that you had in this quarter. I thought this industry was mostly operating on a cost-plus basis. However, in this quarter, we had a INR 20 crore loss. I think in quarter 3 also last year, we had about a INR 14 crore loss. So I just wanted to understand how exactly the inventory mechanism or the cost trust works?
Yes. See, in the COVID we are seeing raw material prices continue to go up. And I mean, obviously, during COVID 2 years, we made substantial profit also and I'm sure some of the profits would also be linked towards stock gains that we had during that time. Because at that time, everything was continuously going up. Post-COVID, there was one major correction, as you rightly pointed out last year, and there is one major correction, which happened now. Obviously, these price corrections happen also to some extent in the sales side also. There could always be minor timing gaps. And we -- as I said earlier, that we've already bottomed out on the raw material. This is what we feel. And therefore, raw material costs should also now start going up.
Okay. So there is a possibility of minor both side correction as an upward gains as well. It's not like a 100% pass on industry as it's on the raw material.
See, if the demand supply situation remains constant, then this industry certainly passes on the raw material ups and downs.
Understood. On your BOPET line, the 30,000 MT capacity that you have. So how is our capacity utilization over there right now? And since we are focusing mostly on specialty BOPET, do you foresee any issues in ramping up that utilization given the commodity side of BOPET being heavily oversupplied?
See BOPET, we intend to have largely specialty cells. We have already one is Shrink Label, but we have also come out with 3, 4 very beautiful films. One is meant for microwave oven film, which is again a very beautiful film. We have come out with obviously window films. So there are range of films that we're going to come out with that line, but specialty takes a lot of time. And we had earlier said that in 3 to 5 years, we expect this line 50% to have specialty films.
So this is just the beginning of the business, we are developing already, I would say, close to 150 tonnes of monthly volumes we have picked up on specialty films. And as we move along, this will continue to go up for us.
150. So that's about 2,000 tonnes on specialty right now. So that's about 10%, a little less than 10% on that side.
This is less, but it takes time. So quarter-on-quarter there will be growth in maybe in a year's time, if we'll ask us again, these 2,000 tonnes may move to 5,000, 6,000 tonnes.
Understood. So the remaining part what as of now in the foreseeable future as well may not yield a lot of returns for us because of the industry oversupply situation in BOPET?
Yes. BOPET, for next 1 year, we don't expect any decent margins to be made. Right now, to be honest, we are making EBITDA losses on the BOPET line, because the capacities are also not fully utilized. However, what we've seen is that sooner than later, at least we'll start doing EBITDA breakeven on this line, the profitability may start take 1 year, 1.5 years time before we start making some money.
Understood. And on your specialty chemicals, what our utilization last quarter, I believe it was about 50-odd percent. So how are our plants over there getting utilized now?
Actually, quarter 1, to be honest, was even lower, because one of our master bank lines had some issues on the line, which we are trying to correct along with the supplier. There's one particular component, which did not work well. So last quarter, our utilization has actually gone down rather than going up. But that was not because of demand, but because of some shipment challenge, which should get sorted out. And I mean, it would take some time before we get fully utilized. And majority of this extra capacity is actually in adhesives, which is just a start-up of the business.
So it will take, I see, 1.5, 2 years for this capacity to get filled up. All these are innovative businesses, and this does take time. But once it takes time, then it gives you permanently higher margin for a very long duration.
Understood. Lastly, on Zigly. So I think in March, we had 15 experience centers, and now we have a 16 where the target is to reach 200 by March '25. So are we on track on that? Is the pace likely to increase? Or how is it going to be?
We never said 200 by March. We said we intend to have 200 overall. I mean we actually never gave any upper limit. We said that till the time we find that there is a hope we'll continue to expand. We feel that the inflection point for this industry will really come from the year '26, '27, when -- and there is a certain logic for that, which obviously I can't share in this call.
So we will continue to open more experience centers from stores. Obviously, after a point in time when the brand is established, we start opening [ franchises ] stores also. But I don't think so March '25, we look to have our 200 stores. By March '25, we'll have maybe close to 75 stores at best.
[Operator Instructions] We have the question from the line of Lokesh Selvaraj, he is an individual investor.
My question is regarding the recent increase in the promoter stake in the company. I'm curious to know whether the promoters are considering further increasing their stake in the near future. And if so, what factors are influencing this prediction?
Can you repeat your -- somehow I'm not able to hear your question clearly.
My question is regarding recent increase in promoter stake in the company. I'm curious to know whether promoters are considering further increase in their stake in the future -- near future. And if so, what factors are influencing this prediction?
Yes. Our promoter certainly feel that our share is highly undervalued. There's a lot of value to be unlocked in the years to come. We feel we are creating some very big businesses in the next 4, 5 years. And I'm sure that must be the reason that promoters have -- want to acquire shares. And I mean they definitely look very, very optimistic on the company. And though it is their individual decision. But what I understand is that, yes, they do understand that there's a very good opportunity for them.
We have a question from the line of [ Vipul Kumar Shah ] from [ Sumangal Investment ].
Just one small clarification, sir. So this specialized BOPET line, what is the CapEx for that? Because on Slide 16, it is mentioned as INR 100 crores. And Slide 21, it is mentioned as INR 450 crores.
Yes. The total CapEx is INR 450 crores. The specialty, the value-add section has taken INR 100 crores on it, but overall CapEx is INR 450 crores.
INR 450 crores and what will be the capacity of that line?
Close to 30,000 tonnes.
35,000. So it will come online in phases, sir?
Sorry?
It will come online in different phases?
Yes. Most of it had already come last year. The balance will come along with the window film line in the current year.
So lastly, out of INR 450 crores, what is the CapEx we already incurred on this line?
We have already incurred close to INR 375 crores, INR 400 crores.
[Operator Instructions] Since there are no further questions, ladies and gentlemen, that was the last question for today's conference. I now hand the conference over to the management for the closing comments. Thank you, and over to you, sir.
Thank you. While the company's strong specialty portfolio should continue to deliver [indiscernible ] returns with what we feel. Although the near-term outlook for the BOPP and BOPET is a little challenging. We are working on several cost specialization projects, R&D projects in the film business, which will continue to provide edge. Zigly is rapidly becoming well known among these pet parents benefiting all pet lovers and the company's stakeholders. Specialty chemical division should continue to double its revenue from here in years to come.
In the last, I would like to repeat the statutory declarations. Certain statements in this phonecall may be forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. These statements are not a guarantee of future results. Thank you very much for joining. We really look forward.
On behalf of Cosmo First Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.