CCL Products India Ltd. share price target

. We retain our TP of Rs. 325 continuing to value it at at 17x FY23E EPS. Maintain BUY.

We maintain BUY retaining our TP of Rs 325, continuing to value the stock at 18x its FY22E P/E multiple.

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...