CCL Products India Attractive Investment Opportunity, Target Price Rs 1365

CCL Products India Surpasses Expectations in Q4FY26, Maintains Strong EBITDA Performance

CCL Products India, a leading manufacturer of instant coffee, has reported a revenue that exceeded expectations in the fourth quarter of fiscal year 2026. However, the company's margins were impacted due to elevated coffee prices and a higher share of relatively low-margin coffee contracts. Despite this, the key operating metric of EBITDA per kilogram (kg) remained strong at INR 138/kg, reflecting the company's ongoing improvement in product mix.

The company's product mix has been driven by a higher contribution from premium Freeze Dried Coffee (FDC) and an increasing salience of small-pack consumer offerings over the years. The recent stabilization of coffee prices, down by approximately 17% year-to-date, is a positive development for the company. This stabilization has enabled the company to secure longer duration contracts, reduce working capital needs, and improve demand visibility.

Outlook and Valuation

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Our analysis of the company using the Discounted Cash Flow (DCF) approach has led to a target price of INR 1,365, with a potential upside of 21% and a BUY rating. We have marginally increased our estimates for fiscal year 2028 to account for better capacity utilization.

Comparison of CCL Products India's Revenue and EBITDA Performance

Note: The revenue exceeded expectations, but the exact figure is not provided.

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