CCL Products Q4 Results Review - Continued Margin Pressure On High Coffee Prices: IDBI Capital

IDBI Capital Report

CCL Products India Ltd.'s Q4 FY24 revenue was above our and street forecast by 15% and 12%, respectively. Sales jumped 40% YoY to Rs 7,267 million on shifting of Q3 FY23 revenue of ~Rs 450 million due to red sea issue. However, Ebitda grew by only 5% YoY to Rs 1,181 million as Ebitda margin contracted by 548 bps to 16.3% led by adverse product mix and high input cost.

Net profit decreased by 24% YoY to Rs 652 mn due to higher depreciation and interest cost. Nevertheless, CCL continues to maintain its guidance of 18-20% volume growth with 18-20% Ebitda margin in FY25.

However, volume growth was only 14% in FY24, lower than the guidance of 18-20%. We cut our FY25/FY26 earnings per share forecast by 18%/15%.

We now value the stock at a PER of 20 times FY26E EPS to derive a target price of Rs 582 (earlier Rs 681) and maintain our Hold rating on the stock.

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