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Base Effect Moderates Top-Line Growth; Guidance Intact Est. Vs. Actual for Q2FY27: Revenue – MISS ; EBITDA – INLINE; PAT – MISS Changes in Estimates post Q2FY27

FY27E/FY28E: Revenue: -8%/-13%; EBITDA: -10%/-12%; PAT: -22%/-17%

Recommendation Rationale

* Volume-led Growth; FDC Mix Supports Margins: CCL Products reported 7.5% YoY revenue growth, driven by double-digit volume growth of 10-15%, although lower coffee prices weighed on realisations. Gross margin expanded by 339 bps to 37.9%, supported by a favourable FDC mix, while EBITDA grew 7.6% with margins stable at 17.5%, as higher freight and insurance costs offset gross profit gains. Management expects to recover the incremental costs through price revisions. Demand for FDC continues to outpace SDC, supported by premiumisation and new customer additions. With its 17,000 MT FDC capacity approaching full utilisation over the next year, management expects to update its expansion plans by end-Q4FY27 or early Q1FY28, potentially through a strategic partnership. Improved coffee price stability has also enabled the resumption of longer-term customer contracts, enhancing demand visibility. Near-term performance will depend on cost pass-through, coffee price movements, and timely capacity expansion.

* Branded Segment Maintains Momentum: Brand momentum remains strong, with 25% YoY growth driven entirely by volume gains across key channels, including e-commerce, modern trade and general trade. Domestic turnover reached Rs 210 Cr, of which branded sales contributed Rs 140 Cr. Management has guided for full-year branded sales of Rs 550- 600 Cr, with performance expected to accelerate in H2, supported by favourable seasonality in the Indian market. Management aims to sustain the 25% growth momentum going forward.

* Commodity Prices to Remain Steady: Green coffee prices remain steady within the US$3,400 to 3,800 per ton range, exhibiting limited volatility prior to the upcoming harvest. The market trajectory hinges on the Vietnam crop arrival scheduled for November– December, which is anticipated to influence future price movements.

* Management Maintains Guidance: Management has reiterated its FY27 guidance of 15% volume and EBITDA growth, supported by strong expectations for H2 performance. Customers are currently deferring commitments until the Vietnam harvest materialises, with order inflows expected to accelerate from Nov-Dec onwards. Meanwhile, EBITDA/kg is expected to remain stable at Rs 135-140

Sector Outlook: Positive

• Company Outlook & Guidance: Although we have cut our estimates, we maintain our BUY rating, supported by the company’s intact long-term growth prospects and the recent correction in the stock price.

• Current Valuation: 23x Sep’28E EPS (23x Jun’28E EPS ) Current TP: Rs 1,255/share (Rs 1,425/share)

Recommendation: We maintain our BUY rating on the stock, implying an upside of 25% from the CMP.

Financial Performance:

CCL Products’ consolidated revenue for Q2FY27 stood at Rs 1,211 Cr, registering a 7.5% YoY growth. Gross margins stood at 37.9%, expanding by 339 bps. EBITDA increased by 7.6% YoY and EBITDA margins expanded by 2 bps to 17.5%. The company's PAT stood at Rs 130 Cr, up 29% YoY.

Outlook & Recommendation

CCL Products has delivered steady performance and is well-positioned as a preferred partner, supported by the following factors:

1) Its manufacturing facilities in Vietnam and India provide geographic diversification compared with Brazilian peers that operate largely within their home markets. This has helped CCL strengthen its international presence, gain market share, and access new business opportunities, with further investments being evaluated in the UK and US. The company is targeting a global market share of approximately 15% over the next few years through

2) its cost-efficient business model

3) capacity expansion across Vietnam and India, with plans to double capacity

4) expansion in value-added segments such as FDC and small packs in Vietnam

5) aggressive scaling up of its domestic business, led by the branded segment. We continue to value the stock at 23x Sep’28 EPS and maintain our BUY recommendation, with a TP of Rs 1,255/share, implying an upside potential of 25% from the CMP

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