1. At a Glance – The Ferrite That’s Losing Its Magnetic Pull
Cosmo Ferrites Ltd is currently trading at ₹123, with a market cap of ₹147 Cr. The stock is down 29% in the last 3 months and a brutal 51% in one year. Return on Equity? A painful –20.5%. ROCE? –0.74%. Debt to equity? A spicy 2.86.
Q3 FY26 revenue came in at ₹19.18 Cr, and PAT reported a loss of ₹1.32 Cr. EPS for the quarter stood at ₹–1.10.
Price-to-book is sitting at 6.11x while the book value is only ₹20.1. Yes, you read that right. The market is paying six times book value for a company generating losses and struggling with interest coverage of 0.31.
On paper, this is a soft ferrite manufacturer. On numbers, it’s currently soft in profitability and hard on shareholders’ patience.
But wait — the government has imposed a 35% anti-dumping duty on Chinese imports. Could this be the plot twist?
Let’s dig deeper.
2. Introduction – The Smallcap That Got Hit by Exports, Tariffs & Reality
Cosmo Ferrites manufactures Mn-Zn soft ferrite cores used in power electronics. These are used in EV chargers, solar inverters, industrial electronics, EMI filters — basically all the cool stuff powering the “India growth story.”
Sounds exciting, right?
Except the financial performance looks like a rollercoaster designed by someone who hates stability.
Revenue has been declining over the past three years. Margins have shrunk. Losses have returned. Debt remains elevated. And management resignations keep popping up in announcements like surprise guests at a wedding.
But here’s the twist: the government has slapped a 35% anti-dumping duty on Chinese imports for 5 years.
For a company competing against Chinese soft ferrite cores, this is like getting extra overs in a T20 match.
The question is — can Cosmo actually capitalize on it? Or will it continue burning cash while the opportunity passes?
Let’s understand what they actually do before we judge.
3. Business Model – WTF Do They Even Do?
Cosmo Ferrites manufactures Mn-Zn based soft ferrite cores.
These are components used in:
Automotive sensors & LED lighting
Solar inverters
Industrial power supplies
EMI filters
EV battery chargers
They operate from Himachal Pradesh with in-house powder manufacturing and German REIDHAMMER kilns for precision sintering.
Capacity:
Ferrite Powder: 3,600 tons per year (expanding to 500 tons/month)
Ferrite Components: 3,900 tons per year
Revenue breakup FY24:
Soft Ferrite Components: ~75%
Coils & Transformers: ~21.5%
Other Income: ~3.5%
Geographical revenue split H1 FY25:
Domestic: 54%
Export: 46%
Almost half exports.
Now here’s the problem: Q3 press release mentioned supply and tariffs affecting exports. So the very thing they depend on (exports) has been disrupted.
They are also investing in automation to reduce manpower cost by 15% and rejection rate by 4%.
Question for you: Is this a turnaround candidate waiting for policy support, or a structurally weak smallcap struggling in a competitive industry?
Let’s look at numbers.
4. Financials Overview – The Quarterly Reality Check
At CMP ₹123, implied P/E = Not meaningful (negative earnings).
Quarterly Comparison (₹ Crores)
Metric
Latest Q3 FY26
YoY Q3 FY25
Prev Q2 FY26
YoY %
QoQ %
Revenue
19.18
22.61
25.30
-15.17%
-24.17%
EBITDA
0.48
1.33
1.13
-63.9%
-57.5%
PAT
-1.32
-0.45
-0.57
Loss widened
Loss widened
EPS (₹)
-1.10
-0.37
-0.47
Loss widened
Loss widened
Revenue down. EBITDA down sharply. Loss increasing.
Interest cost for Q3 FY26 = ₹1.18 Cr while operating profit is only ₹0.48 Cr. That explains the bleeding.
If your interest coverage is 0.31, banks are basically watching you like a strict school principal.
5. Valuation Discussion – Fair Value Range Only
Since earnings are negative, P/E method becomes tricky.
1️ P/E Method (Using Industry PE 28.2)
If the company returns to break-even and earns say normalized EPS of ₹2 (historical positive years show EPS above ₹2 in FY23), fair value at industry PE:
₹2 × 20–28 = ₹40–₹56 range
But this assumes recovery.
2️ EV/EBITDA Method
Enterprise Value = ₹210 Cr EV/EBITDA = 32.7
For industrial smallcaps, reasonable EV/EBITDA range is 10–15.
If EBITDA normalises to say ₹10 Cr (historical FY23 operating profit was ₹10.75 Cr):
Fair EV = ₹100–150 Cr
After adjusting debt (~₹69 Cr), implied equity value roughly ₹30–80 Cr.
