CCL PRODUCTS (INDIA) LTD

Result Update (CONSOLIDATED): Q4 FY15

BUY

CMP

180.20

Target Price

205.00

JUNE 4th, 2015

ISIN: INE421D01022

Index Details

SYNOPSIS

Stock Data

Sector
BSE Code
Face Value
52wk. High / Low (Rs.)
Volume (2wk. Avg.)
Market Cap (Rs. in mn.)

Tea & Coffee

519600
2.00
222.70/60.00
106000
23972.01

Annual Estimated Results (A*: Actual / E*: Estimated)

YEARS
Net Sales
EBITDA
Net Profit
EPS
P/E

FY15A
8805.69
1742.56
939.78
7.06
25.51

FY16E
9774.32
1909.84
1042.70
7.84
22.99

FY17E
10654.00
2113.36
1174.39
8.83
20.41

Shareholding Pattern (%)

CCL Products (India) Ltd manufactures Soluble

Instant Spray Dried Coffee Powder, Spray Dried
Agglomerated and granulated Coffee, freeze Dried
Coffee, and Freeze Liquid Coffee.
In Q4 FY15, Net profit stood to Rs. 215.26 million
against Rs. 178.33 million in the corresponding
quarter of previous year, an increase of 20.71%.
The companys net sales stood at Rs. 2164.09 million
in Q4 FY15 from Rs. 2186.26 million over the
corresponding quarter of previous year.
During the quarter, operating profit is Rs. 416.47
million as against Rs. 423.68 million in the
corresponding period of the previous year.
Reported EPS of the company stood at Rs. 1.62 in Q4
FY15 as compared to Rs. 1.34 in Q4 FY15, an
increase of 20.71%.
During the quarter, PBT increased to Rs. 326.07
million as compared to Rs. 289.50 million over the
corresponding quarter of previous year, registered a
growth of 12.63%.

1 Year Comparative Graph

The company has recommended a final dividend of

Rs. 1.50/- per equity share of nominal value of Rs.
2/- each for the financial year 2014-15.
Net profit grew by 46% to Rs. 939.78 million for the
end of FY15 from Rs. 644.19 million for the end of
FY14.
Net Sales and PAT of the company are expected to
grow at a CAGR of 17% and 35% over 2014 to 2017E
respectively.

CCL PRODUCTS (INDIA) LTD

S&P BSE SENSEX

PEER GROUPS

CMP

MARKET CAP

EPS

P/E (X)

P/BV(X)

DIVIDEND

Company Name

(Rs.)

Rs. in mn.

(Rs.)

Ratio

Ratio

(%)

CCL Products (India) Ltd

Goodricke Group Ltd
Rossell India Ltd
Bombay Burmah Trading Corporation Ltd

180.20
139.20
97.50
516.85

23972.01
3006.70
3577.90
36061.60

7.06
16.13
2.12
1.01

25.51
8.63
45.99
511.73

5.69
1.41
2.20
13.21

75.00
45.00
25.00
50.00

QUARTERLY HIGHLIGHTS (CONSOLIDATED)

Results Updates- Q4 FY15
Months

Mar -15

Mar -14

% Change

Net Sales

2164.09

2186.26

(1.01)

PAT

215.26

178.33

20.71

EPS

1.62

1.34

20.71

416.47

423.68

(1.70)

EBITDA

The companys net profit jumps to Rs. 215.26 million against Rs. 178.33 million in the corresponding quarter
ending of previous year, an increase of 20.71%. Revenue for the quarter decreased by 1.01% to Rs. 2164.09
million from Rs. 2186.26 million, when compared with the prior year period. Reported earnings per share of the
company stood at Rs. 1.62 a share during the quarter as against Rs. 1.34 over previous year period. Profit before
interest, depreciation and tax is Rs. 416.47 million as against Rs. 423.68 million in the corresponding period of
the previous year.
Break up of Expenditure
(Rs in millions)
Break up of Expenditure
Q4 FY15

Q4 FY14

%
CHNG

Cost of Material Consumed

1390.69

1263.96

10%

Packing materials consumed

102.42

94.08

9%

Stores Power & Fuel

119.28

160.60

-26%

Employee Benefit Expenses

81.62

90.89

-10%

Depreciation & Amortization

63.08

94.70

-33%

Other Expenditure

170.84

93.46

83%

COMPANY PROFILE
CCL Products (India) Ltd by shares established under the laws of India. The company was formed in the year
1994 and commenced commercial operations in the year 1995. CCL Products is engaged in the manufacture of
Soluble Instant Spray Dried Coffee Powder, Spray Dried Agglomerated / Granulated Coffee, Freeze Dried Coffee,
as well as Freeze Concentrated Liquid Coffee. It is the soluble instant coffee is prepared from carefully chosen
Arabica and Robusta coffee beans, roasted and processed to perfection, for an aroma & flavor will bring real
satisfaction instantly. In addition to 100% pure soluble instant coffee, also has ability to supply flavoured coffee,
decaffeinated coffee, organic coffee, Rainforest coffee, Fair Trade coffee, Dual and Triple certified coffee as well as
Chicory-coffee mix as per the required specifications of the customer, and can also offer the customers the option
of highest quality customized products.
CCL Products state-of-the-art Soluble Instant Coffee Manufacturing Plant is located at Duggirala Mandal, Guntur
District, Andhra Pradesh, India, with a current combined capacity of more than 20,000 MTs, per annum. It has the
distinction of setting up Indias first Freeze Dried Instant Coffee Manufacturing Plant in the year 2005. The
company has adapted Swiss & Brazilian Technology, purchased from world renowned pioneers in turnkey
Instant/Soluble Coffee technology at its plant. The adaptation of technology has enabled CCL Products to produce
international quality soluble coffee, which is currently being exported to more than 60 countries around the
globe.
The company is ISO 9001:2008, HACCP and BRC Quality Management System (QMS) certified, and has achieved
Trading House status. CCL Products is certified to produce Organic Coffee, Rain Forest Alliance Coffee and Fair
Trade Coffee, in any combination, by the relevant organizations. The companys Coffee Manufacturing Plant also
holds Kosher and HALAL Certification.
Products

Pure Soluble Coffee

Spray Dried Coffee Powder

Spray Dried Coffee Granules

Freeze Dried Coffee

Freeze Concentrate Liquid Coffee

Decaffeinated Coffee

Flavoured Coffee

Certified Coffees

Chicory-coffee mix

 In-house Brands

Continental Special

Continental Premium

Continental Supreme

 Manufacturing Process

Green beans storage, cleaning and grading

Roasting and Grinding

Extraction / Clarification

Evaporation and Aroma recovery

Spray Drying

Agglomeration

Freeze-drying

Freeze Concentrated Liquid Coffee

Packing.

FINANCIAL HIGHLIGHT (CONSOLIDATED)

(A*- Actual, E* -Estimations & Rs. In Millions)

Balance Sheet as at March 31, 2014 -2017E

FY14A

FY15A

FY16E

FY17E

Share Capital

266.06

266.06

266.06

266.06

Reserves and Surplus

3261.85

3949.68

4779.11

5639.35

3527.91

4215.74

5045.17

5905.41

Long term Borrowings

1349.09

903.74

713.95

628.28

Deferred Tax Liabilities

233.23

243.24

250.54

260.56

1582.32

1146.98

964.49

888.84

Short term Borrowings

1054.77

933.10

849.12

789.68

Trade Payables

205.08

445.50

534.60

609.44

Other Current Liabilities

665.59

630.46

661.98

688.46

Short Term Provisions

214.57

245.43

274.88

299.62

3. Sub Total - Current Liabilities

2140.01

2254.49

2320.59

2387.21

Total Liabilities (1+2+3)

7250.24

7617.21

8330.25

9181.46

Tangible assets

3611.34

3399.73

3569.72

3855.29

Capital Work in Progress

388.78

534.29

614.43

688.17

a) Total Fixed Assets

4000.12

3934.02

4184.15

4543.46

b) Non-current investments

15.58

14.98

15.58

16.05

c) Long Term loans and advances

40.77

67.93

85.45

98.27

4056.47

4016.93

4285.18

4657.77

Inventories

1379.49

1735.28

2035.27

2341.87

Trade receivables

1067.53

1132.24

1188.85

1260.18

Cash and Bank Balances

343.25

266.32

298.28

331.09

Short-terms loans & advances

398.97

459.89

515.08

582.04

4.53

6.55

7.60

8.51

2. Sub Total - Current Assets

3193.77

3600.28

4045.08

4523.69

Total Assets (1+2)

7250.24

7617.21

8330.25

9181.46

SOURCES OF FUNDS
Shareholder's Funds

1. Sub Total - Net worth

Non Current Liabilities

2. Sub Total - Non Current Liabilities

Current Liabilities

APPLICATION OF FUNDS
Non-Current Assets
Fixed Assets

1. Sub Total - Non Current Assets

Current Assets

Other current assets

Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs.in.mn)

FY14A

FY15A

FY16E

FY17E

12m

12m

12m

12m

7168.22

8805.69

9774.32

10654.00

Other Income

26.35

30.16

33.18

35.83

Total Income

7194.57

8835.85

9807.49

10689.83

Expenditure

-5737.26

-7093.29

-7897.65

-8576.47

Operating Profit

1457.31

1742.56

1909.84

2113.36

Interest

-170.58

-136.14

-125.25

-117.73

Gross profit

1286.73

1606.42

1784.60

1995.63

Depreciation

-291.04

-268.22

-284.31

-298.53

Profit Before Tax

995.69

1338.20

1500.28

1697.10

Tax

-351.50

-398.42

-457.59

-522.71

Net Profit

644.19

939.78

1042.70

1174.39

Equity capital

266.06

266.06

266.06

266.06

Reserves

3261.85

3949.68

4779.11

5639.35

Face value

2.00

2.00

2.00

2.00

EPS

4.84

7.06

7.84

8.83

Description
Net Sales

Quarterly Profit & Loss Statement for the period of 30th Sep, 2014 to 30th Jun, 2015E
Value(Rs.in.mn)

30-Sep-14

31-Dec-14

31-Mar-15

30-Jun-15E

3m
2472.43

3m
2413.03

3m
2164.09

3m
1904.40

Other income

7.44

10.54

3.63

3.92

Total Income

2479.87

2423.57

2167.72

1908.32

Expenditure

-1988.26

-1957.24

-1751.25

-1531.14

Operating profit

491.61

466.33

416.47

377.18

Interest

-32.94

-33.59

-27.32

-25.68

Gross profit

458.67

432.74

389.15

351.50

Depreciation

-69.36

-68.78

-63.08

-69.39

Profit Before Tax

389.31

363.96

326.07

282.11

Tax

-127.96

-102.87

-110.81

-82.66

Net Profit

261.35

261.09

215.26

199.45

Equity capital

266.06

266.06

266.06

266.06

Face value

2.00

2.00

2.00

2.00

EPS

1.96

1.96

1.62

1.50

Description
Net sales

Ratio Analysis
Particulars

FY14A

FY15A

FY16E

FY17E

EPS (Rs.)

4.84

7.06

7.84

8.83

EBITDA Margin (%)

20.33

19.79

19.54

19.84

PBT Margin (%)

13.89

15.20

15.35

15.93

PAT Margin (%)

8.99

10.67

10.67

11.02

P/E Ratio (x)

37.21

25.51

22.99

20.41

ROE (%)

18.26

22.29

20.67

19.89

ROCE (%)

29.47

33.22

33.20

32.93

Debt Equity Ratio

0.68

0.44

0.31

0.24

EV/EBITDA (x)

17.86

14.66

13.21

11.86

Book Value (Rs.)

26.52

31.69

37.93

44.39

P/BV

6.79

5.69

4.75

4.06

Charts

OUTLOOK AND CONCLUSION



At the current market price of Rs. 180.20, the stock P/E ratio is at 22.99 x FY16E and 20.41 x FY17E
respectively.

Earnings per share (EPS) of the company for the earnings for FY16E and FY17E are seen at Rs. 7.84 and Rs.
8.83 respectively.

Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 25% over 2014 to 2017E
respectively.

On the basis of EV/EBITDA, the stock trades at 13.21 x for FY16E and 11.86 x for FY17E.

Price to Book Value of the stock is expected to be at 4.75 x and 4.06 x respectively for FY16E and FY17E.

We recommend BUY in this particular scrip with a target price of Rs. 205.00 for Medium to Long term
investment.

INDUSTRY OVERVIEW
Tea Industry
India is one of the world's leading producers of tea. The tea produced in India is among the finest in the world
owing to strong geographical indications, heavy investments in tea processing units, continuous innovation,
augmented product mix and strategic market expansion. The main growing regions lie in Northeast India,
including Assam, the Darjeeling district and the Dooars region of North Bengal, and in the Nilgiris in South India.
India is also one of the world's largest consumers of tea. The tea industry is also India's second-largest employer

with over 3.5 million workers employed in over 1,500 tea-growing estates. In the period of April-December in
2013-14, India produced 947.73 million kilograms of tea.
Coffee Industry
Coffee in India is grown in one of the worlds rainiest inhabited region that receives 2,500 to 4,000 mm rainfall
spread over 100 days, followed by more than 100 days of continuous dry period. Indian coffee is grown under a
thick natural shade. This is one of the 25 biodiversity hotspots of the world and is home to a large diversity of
butterflies (331 species), amphibians (121 species), reptiles (157 species), birds (508 species) and mammals
(120 species), and is flanked by orchids and a large number of medicinal and aromatic plants.
India is the seventh largest coffee producer in India and the third largest in Asia. India exports coffee to over 45
countries, over 50 per cent of Indian exports in 2013-14 headed to Europe. Italy is the largest importer of coffee
from India, followed by Turkey, Germany and Russian Federations.
Outlook
Consumption of tea has increased as compared to production and this will help in better price realization.
However, India needs to draw a number of initiatives in order to strengthen the stand in the global market and
tap the potential market by improving the standards of plucking thereby enhancing the quality of the product
sold. The export growth of the tea has been on a decline and this has resulted in lack of competitiveness in the
global market.
New strategies aimed at adding value and reducing production and marketing costs are also needed. Value
addition and diversification for a wide range of tea products need to be developed for balancing the supply
demand scenario.

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This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients investment decision based on this document.

Firstcall India Equity Research: Email info@firstobjectindia.com

C.V.S.L.Kameswari
U. Janaki Rao
B. Anil Kumar
M. Vinayak Rao
G. Amarender

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