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CCL Products Shares Drop to 7-Month Low
CCL Products shares hit 7-month low after earnings miss, with Axis Direct holding buy rating.
In brief
CCL Products shares hit 7-month low after earnings miss, with Axis Direct holding buy rating. CCL Products shares fell to ₹983, their lowest in seven months, as quarterly results missed estimates due to weak coffee prices and higher costs, though Axis Direct maintains a 'buy' rating with a revised target price of…
CCL Products Shares Fall
CCL Products shares fell to ₹983, their lowest level in seven months, as quarterly results missed estimates due to weak coffee prices and higher costs.
Quarterly Results Missed Estimates
The company reported 7.5% year-on-year revenue growth, driven by double-digit volume growth of 10, 15%, though lower coffee prices weighed on realizations.
Gross Margin Expansion
Gross margin expanded by 339 basis points to 37.9%, supported by a favorable FDC mix, while EBITDA grew 7.6% with margins stable at 17.5%.
Management Cost Recovery Plan
Management expects to recover incremental costs through price revisions, with FDC demand outpacing SDC due to premiumization and new customer additions.
Capacity Expansion Plans
With 17,000 MT FDC capacity approaching full utilization, management plans to update expansion by end of Q4FY27 or early Q1FY28, potentially through strategic partnership.
Axis Direct Maintains Buy Rating
Axis Direct retained its 'Buy' rating despite the correction, citing intact long-term growth prospects and recent share price correction.
Revised Target Price
The brokerage trimmed its target price from ₹1,425 to ₹1,255 per share, reflecting the stock’s recent decline.
Coffee Price Stability
Green coffee prices remain steady in the US$3,400, 3,800 per tonne range, with Vietnam’s crop expected to influence future movements in November, December.
What to remember
CCL Products shares fell to ₹983, their lowest in seven months, as quarterly results missed estimates due to weak coffee prices and higher costs, though Axis Direct maintains a 'buy' rating with a revised target price of ₹1,255.
