CCL PRODUCTS is one of the Top 500 Shares identified by Dynamic Research team at the end ofevery quarter out of 1700 Shares of NSE, posted a stupendous Q4FY16 results on 2^nd May 16 led by b volume growth.

Let’s have a glimpse into the financial numbers of the finest coffee creators.

Standalone (All figures in Rs. Crores)

Consolidated (All figures in Rs. Crores)

• Net Sales 264 Q4FY16 vs 215 Q4FY15 – 23% growth
• Total Income from Operations 264 Q4FY16 vs 216 Q4FY15 – 22% growth
• PAT 367 Q4FY16 vs 215 Q4FY15 – 71% growth
• Net Sales 921 vs 854 YoY – 8% growth
• Total Income from Operations 932 vs 881 YoY – 6% growth
• PAT 122 vs 94 YoY - 30% growth

The company has structured a capex of Rs 250 cr for expanding its freeze dried plant. Operations are expected to begin by FY19-20. The earnings growth of the Company will increase once the capacity utilization of expanded capacity improves. The management gave a guidance of approximately 12% growth for FY17. Management is hopeful of achieving 20% growth in bottom-line (excluding export incentives) in FY17 primarily because of product mix improvement.

About the Company

CCL was formed in 1994 and is the largest manufacturer and exporter of instant coffee in India. The company specializes in import of green coffee to India and export of instant coffee all over the world with manufacturing plants in India, Switzerland and Vietnam.

Products:

• Soluble Instant Spray Dried Coffee Powder,
• Spray Dried Agglomerated / Granulated Coffee
• Freeze Dried Coffee
• Roasted Coffee
• Roast & Ground Coffee
• Freeze Concentrated Liquid Coffee.
• Flavoured coffee
• Decaffeinated coffee
• Organic coffee
• Rainforest coffee
• Fair Trade coffee
• Dual and Triple certified coffee
• Chicory-coffee mix

Brands: Continental Speciale, Continental Premium, Continental Supreme

Packing:

• In Jars of 25 gms, 50 gms, 100 gms and 200 gms
• In cans from 45 gms to 1kg
• In Pouches / Sachets ranging from 1 gm, 5 gms, 8 gms, 10 gms. 25 gms, 50 gms, 100 gms, 200 gms, 1 kg

Outlook:

The Company’s presence in Vietnam has aided in catering to the coffee needs of ASIAN countries and also Vietnam is strategically closer to many South-East Asian nations, Japan, Korea, China etc. Vietnam is considered as the most favoured nation by these countries with reduced or NIL duty structures in addition to having savings on logistics. The massive potential in domestic market for soluble coffee made the Company concentrate even on domestic sales both in private label segment and through its established brands. The soluble coffee consumption in India is expected to witness a growth of 3.9% over the next 5 years and retail coffee sales are expected to reach ` 38 Billion by 2017. The Company has made a successful entry in the retail market with its premium brands.

Conclusion:

CCL Products share price is currently trading at 232 with a P/E of 26. The book value of the stock is 40.87 and the stock has a market cap of 3105 crs. The 52 week high / low of the stock is 254 and 154.25 respectively. Based on the above mentioned facts we recommend buying the stock with a target of 255 for a short term outlook.