CCL Products India Ltd. share price target

CCL Products (CCLP) is the largest manufacturer and exporter of private label Instant coffee in India with a total manufacturing capacity of 35k tonnes. CCLP's 25 years experience in the industry and expertise in customized coffee blends

Despite a flat revenue growth at Rs 265Crs YoY (lower than our estimate Rs 283 Crs) in Q4FY20, CCL Products (CCLP) posted a robust GM expansion at 58.8% (1343 bps expansion YoY)on back of higher share of freeze dried coffee (FDC).

We recommend a BUY on CCL PRODUCTS with a Target Price of Rs 225 an upside of 7% from CMP of Rs. 209 and Stop Loss Rs 201.

According to our recent interaction with CCLP management, although the business has not seen any production halts or order cancelations until first half of March,2020, delayed dispatches to its exporting countries (~90% of revenue) could limit its topline growth in Q4FY20.

CCL Products (CCLP) posted a robust consol. revenue growth at Rs 303Crs up 29% YoY primarily aided by healthy India operations. Operating EBITDA increased by 55% YoY to Rs. 84Crs along with margin expansion of 460bps to 27.8% in Q3FY20.

CCL Products (India) Ltd. (CCL) declared its Q3FY20 results recently. Consolidated net revenues and EBITDA grew by 29% & 55% Y-O-Y, on account of benign input cost, better product mix and higher utilisation. The EBITDA margin of the company improved by 460bps to...

CCL Products produces several varieties and blends of coffee including spray dried coffee powder, spray dried agglomerated / granulated coffee, freeze dried coffee and freeze concentrated liquid coffee. It is also certified to supply organic coffee, rainforest alliance coffee, UTZ certified coffee and...

The company has a total processing capacity of 35,000 MT per annum, having one of the largest capacity in India (20,000 MT) and Vietnam (10,000 MT). CCL Products' soluble instant coffee manufacturing plant is located in Duggirala Mandal, Guntur District, Andhra Pradesh, India (capacity of 20,000 MT per annum). CCL has set up a freeze dried instant coffee (a premium category of coffee) greenfield plant with capacity of 5,000 tonnes in Chittoor,...

We remain positive on CCL Product's strong business moat, market leadership in Instant Coffee production/exports and foray into branded retail business.

CCL Products (India) Ltd. (CCL) declared its Q2FY20 results recently. Consolidated net revenues grew by 3% Y-O-Y to `299 crs, impacted by lower realisation. Consolidated EBITDA for Q2FY20 decreased by 19% Y-O-Y basis to `62crs due to higher ad spend. Gross...