At a Glance
Cosmo Ferrites Ltd – a tiny player in the ferrite cores game – posted Q1 FY26 revenue ₹26.9 Cr (+21% QoQ) and a microscopic PAT ₹0.05 Cr (yes, five lakhs). The company has a negative ROE of -20%, mounting debt, and erratic profits. Despite that, the stock trades at 13.5x book – optimism or delusion?
Introduction
Ferrites are magnetic materials powering your power electronics. Cosmo Ferrites claims to be India’s leading manufacturer of Mn-Zn soft ferrite cores. Great tech, but terrible finances. Over the past three years, it has burned cash, posted losses, and still commands a ₹332 Cr market cap. Investors here either have diamond hands or no clue.
Business Model (WTF Do They Even Do?)
- Products: Mn-Zn soft ferrite cores (used in transformers, SMPS, EV chargers).
- Market: Export-driven, with clients in power electronics.
- Revenue Source: 100% manufacturing; no trading buffer.
Roast: They make critical components but can’t make consistent profits. A tech play without the tech premiums.
Financials Overview
Q1 FY26
- Revenue: ₹26.9 Cr (+21% QoQ)
- EBITDA: ₹2.3 Cr (OPM 8.7%)
- PAT: ₹0.05 Cr (vs ₹-1.5 Cr loss last quarter)
- EPS: ₹0.04
FY25 Recap
- Revenue: ₹85.7 Cr
- PAT: ₹-5.7 Cr
- ROE: -20.6%
- Dividend: None.
Comment: Tiny profits, erratic margins, and no dividends.
Valuation
- P/E Method
- EPS negative → P/E meaningless.
- P/B Method
- BV ₹20.5
- Fair P/B: 1x
- Value ≈ ₹20
- DCF:
- Loss-making → impossible to model reliably.
🎯 Fair Value Range: ₹20 – ₹40
CMP ₹276 = 🚩 Overpriced.
What’s Cooking – News, Triggers, Drama
- Govt anti-dumping duty on Chinese ferrites → may help domestic sales.
- Redemption of preference shares of ₹2 Cr due Aug 1, 2025.
- Trigger: Demand surge from EV and power electronics could revive fortunes.
- Risk: Execution failure, global price wars.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 118 |
| Liabilities | 45 |
| Net Worth | 25 |
| Borrowings | 71 |
Remark: Tiny net worth, high borrowings – risky leverage.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | -1.6 | 2.7 | 4.4 |
| Investing | -21.7 | 0.5 | -2.5 |
| Financing | 25.6 | -5.0 | -2.7 |
Remark: Survives on financing; cash flows inconsistent.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | -20.6% |
| ROCE | -0.8% |
| P/E | N/A |
| PAT Margin | -4% (FY25) |
| D/E | 2.8 |
Remark: Ratios scream distress.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 107.3 | 97.8 | 85.7 |
| EBITDA | 10.8 | 7.2 | 2.2 |
| PAT | 2.4 | -2.0 | -5.7 |
Remark: Revenue shrinking, losses mounting.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Kaynes Tech | 2,722 | 293 | 129x |
| Syrma SGS Tech | 3,571 | 202 | 67x |
| Cosmo Ferrites | 85.7 | -5.7 | N/A |
Remark: Cosmo is a dwarf among peers, yet trades at premium multiples.
Miscellaneous – Shareholding, Promoters
- Promoters: 63.7%
- FIIs: Nil
- DIIs: Negligible
- Public: 36%
Observation: High promoter holding, but no institutional faith.
EduInvesting Verdict™
Cosmo Ferrites is a high-risk penny disguised as a mid-cap. Anti-dumping duties may improve pricing power, but operational inefficiency and losses remain big hurdles. Valuation is way ahead of fundamentals.
SWOT Quickie
- Strengths: Niche product, export potential, government support.
- Weaknesses: Loss-making, negative ROE, high debt.
- Opportunities: EV and electronics growth.
- Threats: Chinese competition, cost inflation.
Final Word: Currently priced like a tech disruptor, but financials scream “turnaround needed.” Avoid unless you like thrillers.
Written by EduInvesting Team | 30 July 2025
SEO Tags: Cosmo Ferrites Q1 FY26 Results, Cosmo Ferrites Stock Analysis, Soft Ferrite Manufacturer India
