CCL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.4

📊 Core Financials

• Quarterly PAT surged from 31.4 Cr. to 112 Cr. (+306% growth), showing strong earnings momentum.
• ROE at 8.02% and ROCE at 10.1% indicate modest efficiency and profitability.
• Debt-to-equity ratio of 0.69 shows relatively high leverage compared to peers.
• Dividend yield at 0.50% provides limited shareholder returns.

💹 Valuation Indicators

• P/E Ratio: 70.5 vs Industry PE of 15.8 → Significantly overvalued.
• P/B Ratio: Current Price / Book Value ≈ 10.2 → Expensive relative to assets.
• PEG Ratio: -6.95 → Negative, indicating weak growth outlook relative to valuation.
• Intrinsic Value Zone: ₹850–₹900 (near DMA 200).

🏭 Business Model & Competitive Advantage

• Core operations in coffee processing and exports, with strong global presence.
• Competitive advantage lies in scale, brand reputation, and diversified product portfolio.
• Exposure to global commodity cycles impacts profitability and margins.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive accumulation between ₹850–₹900.
• Long-Term Holding: Suitable for investors seeking exposure to coffee exports, but valuation risks remain high.

✅ Positive

• Strong quarterly PAT growth (+306%).
• Established global presence in coffee exports.
• Increase in DII holdings (+0.64%).

⚠️ Limitation

• High P/E ratio (70.5) compared to industry average.
• P/B ratio of 10.2 suggests expensive valuation relative to assets.
• Negative PEG ratio (-6.95) indicates poor growth outlook.
• Relatively high debt-to-equity ratio (0.69).

📉 Company Negative News

• Decline in FII holdings (-0.12%).
• Valuation concerns with high P/E and PEG ratios.

📈 Company Positive News

• Quarterly PAT recovery (112 Cr. vs 31.4 Cr.).
• EPS at ₹13.7 shows improving earnings base.
• Increase in domestic institutional investor confidence (+0.64%).

🌐 Industry

• Coffee processing and export sector driven by global demand and commodity price cycles.
• Industry PE at 15.8 indicates moderate valuation compared to CCL’s premium.
• Sector outlook supported by rising demand for instant coffee and global consumption trends.

🔎 Conclusion

• CCL shows strong earnings momentum but remains heavily overvalued with modest efficiency metrics.
• High leverage and valuation risks make it suitable only for long-term investors with high risk tolerance.
• Accumulation recommended near ₹850–₹900 for favorable risk-reward balance.