CCL Products – Strong Growth, RoCE To Drive Re-Rating: HDFC Securities

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HDFC Securities Retail Research

CCL Products India Ltd. is amongst the largest green coffee bean processors globally. It is India’s largest exporter of instant coffee (38% market share) and world’s leading supplier to private labels (~10% global market share).

Over the past two decades, it has increased its capacity by 10 times without diluting equity and has managed to keep its debt in check. Its business model is strong and robust, by virtue of it being a sticky business; it has the best-in-class technology, superior economies of scale and resilient margins.

The company is on the track to double its Vietnam capacity by Q4 FY23 (from 13,500 million tonnes currently).

According to management’s recent commentary, the Russia-Ukraine issue is not likely to have any significant impact on the company’s business.

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