CCL Products India Ltd. share price target

We expect CCLP's Sales/EBITDA/PAT to grow at 31%/27%/26% CAGR over FY22-25E and maintaina high conviction BUY rating on the stock with a unchanged TP of Rs 600/share as we roll over our estimates to 23x Sept-24 EPS.

CCL Products is one of our high conviction BUY with a revised TP of Rs 560/share (Rs 585/share earlier), as we continue to value it at a target P/E multiple of 23x its FY24E EPS.

We recommend BUY with TP of Rs. 430/share.

We raise our FY22/FY23 sales forecast given rise in coffee prices in recent months but maintain our profitability (on per kg basis) estimates. We introduce FY24 forecast in this report. We now value the stock at a PER of 18x FY24E (earlier 22x FY24E) EPS and derive a target price of Rs459 (previous Rs446) and upgrade the stock to a BUY. Key Highlights and Investment Rationale Robust top-line growth: Net sales grew by 4.5% YoY to Rs3.4 bn in Q2FY22 mainly led by higher coffee prices. CCL's EBITDA margin improved 38bps YoY at 24.4% despite sharp rise in freight rates. The freight rates continue to remain high which could pose...

Partially helped by robust growth in domestic business, CCLP posted 12.8% growth in revenues in Q1 at Rs 326.12 crs compared to Rs 289.20 crs in the same quarter a year ago., but slightly lower than Rs 331.58 crs reported in Q4. Part of the fall in revenues in Q1 compared to Q4 is attributed to higher off take of small packs of freeze dried coffee in Q4. Despite rise in green coffee prices and rise in freight costs, OPM expanded by 40 bps in Q1 all thanks to improved product mix. Helped by nearly 15%...

We maintain BUY with a revised TP of Rs 495, as we raise our target P/E multiple to 23x its FY24E EPS (20x earlier).

CCL Product's Q1FY22 result was a mixed bag. While top-line was higher than our estimate by 9%, its EBITDA was 5% below our forecast. Net sales increased by 13% YoY to Rs3,261 mn mainly on higher offtake. EBIDTA grew 14.5% YoY to Rs720 mn. However, sharp increase in tax expense (+35% YoY to Rs99 mn) restricted its net profit...

We interacted with the management of CCL Products (CCLP) to get an update on the overall business in light of unlocking economies domestically and globally.