Broker’s call: CCL Products (Buy)

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Target: ₹1,221

CMP: ₹746

CCL Products (India) Ltd (CCL) ranks as India’s largest manufacturer and exporter of instant coffee, as well as the world’s largest private label instant coffee manufacturer. The company specializes in a diverse range of coffee products. CCL operates four manufacturing units with a total capacity of about 60,000 MTPA for Spray dried coffee (SDC) and around 11,000 MTPA for Freeze dried coffee (FDC).

CCL leverages advanced technology to create more than 900 coffee blends, serving private label customers in over 100 countries. The Company is also focusing on expanding its branded business through its Continental brand, which offers a diverse range of in-house coffee products. These products are distributed through various channels, including retail stores, supermarkets, hotels, airlines, vending machines, etc. enhancing CCL’s global reach and market penetration.

Considering CCL’s dominant position in the instant coffee market and the company’s focus on branded business, we expect the business to grow volume by 15 per cent in the next three years. Further, we anticipate improved margins as the volume contribution of freeze-dried, branded business, and smaller packs increases in the volume mix.