CCL Products sees revenue of over Rs 400 crore in FY12

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CCL Products sees revenue of over Rs 400 crore in FY12

CCL Products has maintained a revenue target of over Rs 400 crore this fiscal, aided by increased volumes for its processed coffee and expansion of its own branded coffee across stores in India.

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CCL Products has maintained a revenue target of over Rs 400 crore this fiscal, aided by increased volumes for its processed coffee and expansion of its own branded coffee across stores in India.

Prices of robusta [green] coffee, which have had a roller coaster ride this year, have this month fallen to their lowest point in 2011, Challa Srishant, executive director of CCL Products told moneycontrol.com. On average, robusta price is now at USD 1,900-2,000 per tonne, compared with USD 2,600 in the beginning of 2011, he said.

Analysts say robusta prices have fallen off-late due to record harvest in Brazil, Vietnam and Indonesia. However, Srishant said the fall in robusta coffee prices is unlikely to affect its realizations because the company mostly has long-term contracts. A fall in green coffee prices also means lower input costs for CCL Products. That apart, consumption in India is also rising year-on-year, which is fuelling demand.

The company has a volume target of 13,000-13,500 tonnes in 2011-12 [April-March], compared with 12,500 tonnes in 2010-11.

CCL Products makes spray dried and freeze dried coffee mainly for export to coffee marketing companies and supermarkets. Its consolidated net profit rose 9% year-on-year to Rs 13.14 crore in the first half of this fiscal. Consolidated net sales were up 46% from a year ago to Rs 220.7 crore in April-September.

The Hyderabad-based company launched its own retail brand of coffee in India earlier this year. It currently sells three varieties of coffee - Continental Speciale, Premium and Supreme. CCL Products says it did some test marketing before rolling out in stores across Andhra Pradesh and is now slowly scaling up the business.

Although Continental Coffee's volumes still remain low, when compared with overall sales of CCL Products, Srishant said the company was seeing good growth.

"We are gradually building up the brand...We supply it in Andhra Pradesh and are now doing tie ups with supermarket chains to retail the product in other cities like Delhi, Kolkata etc," said Srishant.

For instance, Reliance Retail is one such outlet where the coffee is sold, and he said that where ever Reliance Retail had an outlet in the country, the coffee would be available.

CCL Products shares closed down near 4% at Rs 126.45 on NSE on Monday. The stock is down 34% since April this year.

Nachiket Kelkar
nachiket.kelkar@network18online.com