CCL Products India Ltd. share price target

ther operating income declined from `8.4 crore in Q2FY15 to `2.3 crore in Q2FY16, largely on account nt of incentives not realised from the government. Consolidated EBITDA margin jumped 100 bps y-o-y to 20.6%....

CCL Products India Limited (CCL), is India's largest manufacturer and exporter of instant coffee products, with a presence in ~60 countries across the world. Its coffee products include pure soluble coffee products comprising spray dried coffee powder and granules, freeze dried coffee, and freeze concentrate liquid coffee. With traction in the overall business, management expects utilization in both India and Vietnam in FY16 to rise to ~75% (~50% in FY15). EBITDAM in Vietnam operations stand at ~25% (~20% in India). With traction in Vietnam operations we expect contribution of Vietnam to top line increasing to 30% in FY17 (22.2% in FY15), leading to overall revenue growth at a CAGR of 24% through FY17. We also...

Ramp up in Capacity and Focus on Utilization levels: In India, it started withcapacity of 3000 M.Ts. and gradually improved to 25000 M.Ts. and then to current capacity of 38000 M.Ts. in India, Vietnam and Switzerland in the last few years with no equity dilution and growth in RoE and RoCE. Capacity utilization rate is at 59% in FY15 and expected to grow to 62% in FY16E and to 69% in FY17E.

The current global instant coffee market is around 707 million kg and is forecasted to reach up to 814 million kg by the year 2017. Thus, the overall soluble coffee consumption is forecasted to grow at a CAGR of 2.7% till 2017, within which spray and agglomerated coffee to grow at 2.2% and Freeze dried coffee at 4.5% respectively. Domestic coffee consumption has been growing steadily over the last several years, driven by double digit growth in instant coffee category and out of home consumption. The fastest growth in soluble coffee...