Domestic brokerage firm Axis Direct, in its latest note, projects the bull run in CCL Products to continue, setting a target price of ₹1,245, implying a 10% upside from the stock's latest closing price. The brokerage's optimistic view comes on the heels of better-than-expected performance in the June quarter, a strengthening balance sheet, stable coffee prices, and capacity ramp-up, which it believes will help CCL Products deliver robust volume growth over the next 3–4 years.
CCL Products delivered a strong Q1 FY27 performance, with revenue growing 13.7% YoY, driven by robust 20% volume growth and healthy demand across segments. Axis Direct noted that the Continental brand continues to gain market share, supported by expansion into key markets such as Delhi and Mumbai.
With capacity utilisation at around 65%, the company has significant headroom to support future growth. EBITDA grew 21.7% YoY, with the EBITDA margin expanding by 106 bps to 16.1%, supported by the stabilisation of green coffee prices during the quarter.
While near-term margin pressure could arise from the El Niño effect, management remains confident about the growth outlook and has guided for 15% growth in both EBITDA and volumes in FY27, supported by favourable supply conditions in Brazil. The brokerage also highlighted continued strengthening of the company's balance sheet, with CCL Products continuing to deleverage on the back of healthy cash flow generation.
Net debt declined to ₹963 crore in Q1 FY27, down ₹90 crore QoQ. Term loans stood at ₹517 crore, with scheduled repayments of ₹140 crore in FY27, around ₹200 crore in FY28, and the balance in FY29. Continued debt reduction should further strengthen the balance sheet and improve financial flexibility, Axis Direct said.
Meanwhile, the brokerage said that green coffee prices stabilised during the quarter within the ₹3,300– ₹3,800 range, although mild volatility persists. Potential El Niño effects could impact the upcoming November–December harvest in Vietnam, but long-term prices are projected to remain steady, supported by strong Brazilian supply tailwinds.
Looking ahead, Axis Direct expects demand momentum to remain strong over the medium to long term, supported by existing customer traction, new client additions, capacity expansion, and optimal utilisation across plants. Stellar performerThe shares have made significant strides on Dalal Street, barring the recent weakness.
Since March 2025, the stock has delivered a fabulous return of 115%, rising to the current market price of ₹1,130 apiece. Along the way, the stock also reached a fresh all-time high of ₹1,242. Zooming out, the stock, which was trading at ₹174 per share in May 2020, has surged 550%.
Over the last decade, it has delivered a massive return of 359%. This extraordinary rally can be attributed to the company's strong financial performance, supported by increasing demand for its products. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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