CCL Products

CCL Products reported a Q3 FY25 turnover of ₹758.4 crores, a 14.13% year-on-year growth. EBITDA for the quarter increased by 13.53% to ₹127.22 crores, and Profit Before Tax (PBT) grew 7.77% to ₹71.87 crores. However, Net Profit After Tax (PAT) remained flat at ₹63 crores, primarily due to 50% of SEZ profits now being subject to tax and higher deferred tax. For the nine months ended FY25, the Group achieved a turnover of ₹2,269.9 crores (17.8% growth), EBITDA of ₹396.46 crores (20.37% growth), and PAT of ₹208.47 crores (12.77% growth).

The domestic business continues its robust performance, achieving a gross turnover of ₹330 crores year-to-date, with branded contribution at ₹220 crores. For Q3 FY25, domestic business turnover was ₹130 crores, with branded sales contributing ₹90 crores. The B2C segment is growing at 50% year-to-date, and the company is on track to meet its FY25 target of ₹300 crores for B2C and ₹430-440 crores for total domestic business. Management emphasized gaining market share, particularly in quick commerce and modern trade where performance is strong, and expanding distribution in non-South markets.

The company faces ongoing challenges from volatile and rising green coffee prices. Despite these headwinds, CCL Group has maintained its EBITDA growth at 15-20% by focusing on long-term, higher-margin contracts and private label businesses. While price increases are implemented in the B2C segment, they are calibrated to balance volume and price, with 30-40% price increases already taken in larger packs over the last 1-1.5 years and another 10-15% lag remaining. Grammage cuts of 10-15% have also been applied to low-unit-price (LUP) sachets.

Working capital remains high at ₹1,200 crores, primarily driven by elevated green coffee prices. Total debt stands at approximately ₹2,000 crores, with long-term debt at ₹790-800 crores. The company aims to keep its global interest rates low, currently at around 5.25%. Management expects peak debt to be around ₹2,200 crores this year, with annual repayments of ₹150-200 crores. The Indian part of the new facility has been capitalized at ₹400 crores, and the Vietnam facility is expected to be commercialized and capitalized by the end of the current quarter. No significant capex is planned for the next year, as capacity building is largely complete for the next three years.

Q3 FY25 saw marginal volume growth of 3-4%, which management described as an aberration. Year-to-date volume growth is around 10%. This lower growth was partly due to less aggression in transactional and opportunistic business, with a focus on long-term, value-based contracts. Despite the Q3 aberration, the company remains committed to its long-term volume growth guidance of 15% and expects to maintain EBITDA growth in the 15-20% range. The company believes that increased acreage and good crops, particularly from Brazil (expected May-June), will eventually lead to softening coffee prices.