CCL Products (India) Ltd.'s inline first-quarter results indicate that the coffee producer is on track to achieve its guidance of 20% operational growth in fiscal 2024, according to Managing Director Challa Srishant.
Although margin is lower than expected at 19% due to higher prices of green coffee, the absolute Ebitda per kg remained unchanged, Srishant told BQ Prime in an interview.
CCL Products Q1FY24 (Consolidated, YoY)
Revenue up 28.6% to Rs 654.9 crore. (Bloomberg estimate: Rs 565.6 crore)
Ebitda rose 20.09% to Rs 106.3 crore. (Bloomberg estimate: Rs 109 crore)
Ebitda margin fell to 16.23% vs 17.38%. (Bloomberg estimate: 19.3%)
Net profit grew 15.11% to Rs 60.7 crore. (Bloomberg estimate: Rs 71.1 crore).
"We are not looking at too much of a change in the Ebitda per kg in the next one-and-a-half to two years," Srishant said.
The company is looking to offset a possible decline in Ebitda by introducing small packs and premium products. It is looking to increase its domestic business-to-consumer market to Rs 220 crore in the fiscal from the current Rs 160 crore, according to the MD.
Managing Director Challa Srishant (Photo source: CCL Products (India) website)
Compared to the prices being more economical historically, robusta prices were at a premium to arabica prices due to shortages emerging from Vietnam, Srishant said. Improved crop conditions in Brazil may eventually cause robusta prices to soften, he said.
The correction in coffee prices has remained prolonged due to funds unexpectedly taking positions in coffee. The correction is expected to occur in the medium term, he said.
Shares of CCL Products fell 5.69% to Rs 688.85 apiece as of 1.18 p.m., as compared to a 0.49% advance in the NSE Nifty 50. The stock fell 5.81% intra-day to Rs 687.5 apiece, the lowest in over 10 months.
The stock has risen nearly 66.87% year-to-date. The total traded volume stood at 5.2 times its 30-day average.
All the 11 analysts tracking the company maintain a 'buy' rating on the stock, according to Bloomberg data. The average 12-month consensus price target implies a potential upside of 1.5%.
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