CCL Products

CCL Products reported a topline of Rs. 267 cr in Q4 FY20 up 1% Y-o-Y basis with no impact of Covid-19. The company reported EBITDA of Rs.70 cr with EBITDA margin of 26.73%. EBITDA margin improved y 610 bps on Y-o-Y basis mainly on account of favorable product mix. Net profit for CCL Products rose 18.35% to Rs. 42.18 cr in the quarter ended March 2020 as against Rs. 35.64 cr reported in the quarter ended March 2019.

For the year ended March 2020, CCL Products reported a topline of Rs. 1,143 cr with an EBITDA of Rs. 286 cr and EBITDA margin of 25.09% and PAT of Rs. 166 cr.

CCL Products continued focus of increasing in-house brand will have fruitful result over the long term. For the short term growth company is increasing its capacity in Vietnam plant where it enjoys tax break (0% tax). Focus on volume growth, branded business and better product mix will aid profitability and EBITDA margins in FY21. However, falling green coffee prices would affect the topline and should be tracked closely. CCL Products trades at 19x FY20 earnings of Rs. 166 cr which is fairly valued. We opine to Buy on Dips as the business fundamental remains strong with the company sailing through the Covid-19 situation with ease.