CCL Products maintains a long-term volume growth guidance of 15% (9M FY25 +9-10% YoY) but a cautious 10-20% near term (versus historical volume/Ebitda growth guidance of 15-20%); the company noted that despite new coffee crop pouring into India and Vietnam markets, it does not see prices dropping (Brazil crop is heard to be good and can swing prices a bit).
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While there is some uncertainty on near-term volume growth, the ramp-up in recently commissioned India SDC (at ~30% utilization now) and upcoming Vietnam freeze-dried coffee capacity should drive strong growth in FY26E, by when we expect some softness in coffee prices, which should drive an uptick in long term contracts.
Margins should sustain around current levels of Rs 100/kg and start improving over FY26E-FY7E with higher contribution from FDC, small packs and specialty coffee.
Cash flows will likely remain pressured near-term given higher working capital requirements (led by coffee inflation).
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