Detailed Narrative
Q3 FY26 Financial Performance Overview
Vintage Coffee & Beverages Limited reported robust financial performance for Q3 FY26. Consolidated revenue surged by 71% year-on-year to INR 1,505 million, driven by increased volumes, better realization, and an improved product mix. EBITDA for the quarter grew 79% year-on-year to INR 287 million, with the EBITDA margin expanding to 19.1%. Profit after tax also saw a significant increase of 54% year-on-year, reaching INR 191 million. For the nine months ended December 31, 2025, total income rose 91% to INR 3,877 million, and PAT increased 109% to INR 512 million.
Capacity Expansion and Utilization
The company achieved full utilization of its existing instant coffee capacity of 6,500 metric tons per annum in Q3 FY26, supported by strong order inflow and efficient production planning. In line with its growth strategy, Vintage Coffee is expanding its capacity significantly. An additional 4,500 metric tons per annum of spray-dried and agglomerated capacity is expected to be commissioned by the end of FY26, increasing total capacity to 11,000 metric tons. Furthermore, a 5,500 metric tons per annum freeze-dried coffee facility is on track for commercial production by the end of FY27, which will bring the total capacity to approximately 16,500 metric tons.
Product Mix and Profitability Improvement
Vintage Coffee is strategically shifting its product mix towards higher-value offerings. Currently, consumer packs account for 60% of sales, with bulk sales making up 40%. The company aims to further increase the share of consumer packs to 65-70% going forward⏳, which includes products packed in doy-packs, tins, and glass jars. This focus on value-added products has already led to a 7-8% increase in realization and a 20% increase in gross profit per ton, contributing to higher EBITDA levels.
Capital Expenditure and Funding
The total project cost for the new 5,500 metric tons freeze-dried coffee facility is INR 500 crores. This will be funded by INR 200 crores from equity and internal accruals, with the remaining INR 300 crores sourced through debt from banks and other financial institutions. Approximately INR 60 crores has already been spent on this project. Additionally, the INR 45 crores capex for the 4,500 metric tons spray-dried capacity expansion has been fully utilized from internal accruals. The cost of debt for the freeze-dried project is expected to be 4-5% including hedging, totaling 6-7%, and will start impacting the P&L from FY28.
Raw Material Sourcing Strategy
Currently, Vintage Coffee procures 80-85% of its Robusta coffee domestically and 15-20% from imports. The company plans to adjust this mix to 60% Indian beans and 40% imported beans going forward⏳. This diversification strategy involves targeting African countries like Uganda and Indonesia for imported Robusta coffee, with this shift expected to be implemented by Q2 FY27. This aims to ensure consistent quality and potentially optimize costs.
Working Capital and Cash Flow Outlook
The company's operating cash flow turned positive in Q3 FY26, a significant improvement after a shortfall in H1 FY26. Management expects to achieve a breakeven cash flow position for the full FY26. The working capital cycle, which currently stands at around 100-110 days, is anticipated to marginally reduce in the coming quarters. This improvement is attributed to better logistics and production planning, despite longer transit times for imported beans and export of instant coffee.