Buy CCL Products India; target of Rs 780: LKP Research

LKP Research is bullish on CCL Products India has recommended buy rating on the stock with a target price of Rs 780 in its research report dated February 07, 2025.

Broker Research

February 10, 2025 / 12:34 IST

Buy

26 Aug, 2025 12:21

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LKP Research's research report on CCL Products India

CCL Products (India) Limited (CCL) posted a 14.1% YoY revenue growth to ₹7.6 bn in Q3FY25, with EBITDA rising 12.2% YoY to ₹1.2 bn, despite a 4% volume growth. EBITDA margins were flat YoY at 16.4%, while PAT stood at ₹630 mn, down 0.4% YoY. The company reaffirmed its 10-20% volume growth guidance, citing stable demand but caution around high coffee prices affecting long-term contracts. In Q3FY25, CCL’s domestic business generated ₹1.3 bn in revenue, with the branded segment contributing ₹0.9 bn. The company is on track to achieve ₹4.3-4.4 bn in domestic revenue by FY25, with branded sales expected to reach ₹3 bn. Growth in quick commerce, e-commerce, and modern trade is outpacing general trade, and the South Indian market’s share in overall sales has declined, reflecting successful geographical diversification. Despite coffee price volatility, CCL’s experienced management is well-positioned for double-digit volume growth, supported by capacity expansion, higher-margin specialty coffee, and a cost-efficient model.

Outlook

The company is also expanding its B2B and B2C market share. We revise our target price to ₹780 (from ₹881) at 23x FY27 EPS of ₹34, while maintaining a BUY rating, with revised CAGR estimates of 19%/20%/19% for Revenue/ EBITDA/PAT over FY24-27E.

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