Praveen Jaipuriar, CEO of CCL Products India, “What we are guiding the market is that we will keep the volume growth at 15%, and we will try and maintain the earnings before interest, taxes, depreciation, and amortisation (EBITDA) growth also in the region of 15%, not kind of taking it up to 20% or 25% on the back of a volume growth.”
Jaipuriar highlighted that the demand conditions remain healthy while supply-side pressures in the coffee market have eased significantly. Coffee prices have already declined about 20% from last year’s levels, and expectations of a better crop in Brazil could lead to further softening.
The company had delivered volume growth of around 18-20% in the previous year, with the March quarter recording growth closer to 20%. A significant part of the revenue growth, however, came from higher coffee prices.
CCL follows a cost-plus business model and purchases raw material against confirmed orders. As a result, fluctuations in coffee prices do not materially alter profitability, with the company focusing on maintaining EBITDA per kilogram rather than percentage margins.
According to Jaipuriar, lower coffee prices are positive for customers as they provide greater visibility and encourage long-term contracts.
Although geopolitical tensions have affected logistics to some extent, the company believes its supply chain remains relatively insulated. Most of its coffee sourcing comes from Brazil and Southeast Asia, while key markets are spread across North America, Europe, CIS countries and Asia.
On product mix, management indicated that freeze-dried coffee capacity is already running at relatively high utilisation levels, limiting the scope for a sharp increase in its contribution. Meanwhile, the domestic small-pack business is expected to continue supporting profitability.
The company does not expect a meaningful change in EBITDA per kilogram from the product mix, though factors such as logistics costs and changes in spray-dried volumes could have some impact.
CCL Products’ current market capitalisation is ₹15,377.08 crore. The stock was trading at ₹1,154.00 at 3:00 pm on the NSE and has gained more than 32% over the past year.
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