CCL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.6

CCL Products (India) has brewed a compelling business profile in the coffee game, but its fundamentals steep in both flavor and froth. Let’s decode it

☕ Core Financials Snapshot

EPS: ₹23.2, up from prior quarter — quarterly profit surge of 56.2% (₹102 Cr vs ₹63 Cr) is impressive.

ROE: 17.0% | ROCE: 13.1% — solid return metrics, though ROCE shows scope for better asset utilization.

Debt-to-Equity: 0.92 — nearing 1, which is moderately high for a consumer goods company.

Dividend Yield: 0.58% — modest, reflects reinvestment posture rather than income focus.

📊 Valuation Dive

P/E: 37.0 vs Industry PE: 15.5 — trading at >2x premium, requiring sustained growth to justify.

P/B Ratio: ~5.83 (₹857 ÷ ₹147) — strong equity premium, slightly overheated.

PEG Ratio: 2.48 — suggests overvaluation relative to earnings growth.

Estimated Intrinsic Value Range: ₹740–₹770 — current price leans overvalued, caution advised for fresh positions.

🏭 Business Model & Competitive Edge

Segment: Instant coffee manufacturing with exports as a major revenue source.

Strengths

Large-scale global footprint.

Product diversification into freeze-dried and agglomerated formats.

Strong B2B partnerships and OEM/private label supply chains.

Concerns

Volatile input costs (coffee beans, energy).

Currency fluctuation risks.

Debt load weighs on flexibility.

📈 Technical & Sentiment Notes

RSI: 50.5 — neutral; neither overbought nor oversold.

MACD: +2.42 — mild bullish signal.

Volume below 1-week average — subdued activity, consolidation likely.

📍 Suggested Entry Zone

₹740–₹780: Potential accumulation level aligned with intrinsic zone and technical support.

Wait-and-watch mode advised above ₹850 unless bullish momentum resumes with volume confirmation.

🧭 Long-Term Holding Guidance

Holding CCL for 4–6 years could reward patient investors via

Expansion into value-added formats and retail branding.

Margin recovery if debt optimization and cost control persist.

Riding the wave of global demand for instant and specialty coffee.

If you’d like, I can compare CCL with Tata Coffee or Nestlé India to highlight strategic, financial, and valuation contrasts. Ready when you are. ☕📉📊

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