CCL Products Q3 Results Review - Inline Quarter; Better Growth Visibility Drives New Capex: Systematix

Increasing scale of business, sustained client acquisition, product development initiatives are helping drive strong share gains.

<div class="paragraphs"><p>Coffee beans are roasted inside a  coffee roaster. (Photo: Gregory-Hayes/ Unsplash)</p></div>
Coffee beans are roasted inside a coffee roaster. (Photo: Gregory-Hayes/ Unsplash)

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Systamatix Research Report

CCL Products India Ltd.’s Q3 FY23 result was broadly inline with our expectations, with 27%/9%/25% YoY growth in revenue/Ebitda/profit after tax, respectively.

Volume growth fell to low single digit, given a 20-day maintenance shutdown in India plant, and some disruptions in Vietnam related to new capacity commissioning.

However, management maintained its FY23 volume growth guidance of 20-25%, with incremental volumes from Vietnam expected Q4 onwards. High coffee inflation resulted in ~20% increase in realisations, which optically drove Ebitda margin 310 basis points lower to 18.8%.

Increasing scale of business, sustained client acquisition and product development initiatives are helping drive strong share gains for the company across U.S., Europe, India and South-East Asia, as reflected from CCL Products’ strong order bookings for FY24.

Restructuring in the domestic business led to growth momentum slowing to 25% from 35% plus, with FY23 revenue targeted at Rs 2.5 billion. While the new India plant is on track to get commissioned in Q1 FY25, the company has announced another new 6,000 million tonne freeze-dried coffee plant in Vietnam at an outlay of $50 million, slated to come up by Q3 FY25.

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Systematix CCL Products - Q3FY23 Results Review.pdf


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