CCL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of CCL Products (India) Ltd, a leading player in the global private-label instant coffee market. I’m evaluating its financial strength, valuation metrics, business model, and technical indicators to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹7.38 — modest earnings base

PAT Qtr: ₹31.4 Cr vs ₹30.2 Cr — +3.97% QoQ, and +24.7% YoY — healthy growth

ROE: 8.02%, ROCE: 10.1% — moderate efficiency, below FMCG leaders

Debt-to-equity: 0.72 — slightly elevated, but manageable for a manufacturing exporter

Dividend & Cash Flow

Dividend Yield: 0.57% — modest, consistent payout

Cash flows are stable, supported by export contracts and long-term client relationships

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 120 Extremely overvalued vs industry PE of 19.2

P/B Ratio ~9.92 High premium to book value

PEG Ratio -11.8 Negative — reflects valuation disconnect with earnings growth

Intrinsic Value ~₹800–₹830 Trading above fair value

Valuation is stretched, driven more by momentum and export optimism than current earnings strength.

☕ Business Model & Competitive Edge

Industry: Instant coffee manufacturing — export-driven, B2B focused

Moat

Largest private-label coffee exporter from India

Strong global client base across Europe, U.S., and emerging markets

Backward integration and freeze-dried technology offer cost advantages

Catalysts

Capacity expansion in Vietnam and India

Rising global demand for premium instant coffee

Institutional sentiment improving (FII +0.44%, DII +0.31%) — cautious optimism

CCL’s strength lies in its ability to scale efficiently and maintain quality across geographies.

📉 Technical & Entry Zone

Current Price: ₹883

DMA 50/200: Trading above both — mildly bullish

MACD: +5.38 — positive momentum

RSI: 46.1 — neutral zone

📌 Suggested Entry Zone: ₹820–₹850

This range offers a better margin of safety and aligns with intrinsic value and technical support.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially for export-led growth and niche positioning

Buy on dips near ₹840 if bullish on global coffee demand and margin expansion

2026 Target Price: ₹1,050–₹1,100 based on projected earnings and capacity utilization

2030 Forecast: ₹1,400+ if global penetration and product mix improve

⭐ Fundamental Rating

3.8

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