Cafe Coffee Day – Will you Date?

My first post here fellow investors. Comments & Criticisms invited. Thought I’ll start with something simple, a beverage firm.
Disclaimer:
No buying or selling advice, but I am invested.

CCD, Coffee Day Enterprises, My reasons to get-in.

1. Though Coffee is extremely common in South, it is however, an Aspirational Drink for other 3 regions. CCD’s sector, QSR, in India, is expected to grow at 20%+ CAGR in the next decade, with the changing food habits & an exponential rise in disposable incomes of the Middle Class.
   Many within the present 15-30s age cohort, who’ve seen MBA-Chaiwala, ChaiS Bar, Chayos etc as their go-to hangout place, some of whom would eventually gravitate towards a higher-brand, ready to pay that little extra as Premium. Consequently, they’ll either go to CCD, city-level boutique Coffee-Shops, Starbucks(scant presence, high prices) etc. Similarly, the 30-60s age-cohort, which has basically grown up on CCD & is emotionally attached, will continue to keep getting back to it. So, the growth-potential for CCD, if/once it survives & starts posting profits remains high.

2. There is a significant Debt reduction(~7800 Cr to 1800Cr). Though a lot of stores/assets are gone, but QSR Segment doesn’t run all stores in profits either. 80/20 Rule is of high significance in this space. Tata’s during their 2021 buy-out proposal were against running up of some of their subsidiaries, which over the months, CCD has tried to get away with. A step in the right direction. Meanwhile RIL acquired Subway-India, thereby spilling signs of Buy-Out possibilities in QSR space. No point ruling CCD’s own takeover (murmurs of D-Mart/RIL/Tatas), given the zeitgeist of present economy, though remains a wishful thought.

3. Till last Qtr, accounting for reserves, CCD is discreetly profitable, with only depreciation eating the profits in reality. With a book-value of around 171, if the firm simply sticks to survival/profit route, it has all the reasons to aspire for those levels.

Either I win, or I don’t loose approach.
CCD will either be bought(a win) or will survive & revive for a better growth, aspiring for it’s book value, a 3x from here. If one can patiently wait for 2-3 years, this under-rated, undervalued gem can still make a lot happen over coffee!

Assuming we understand the events that happened around 2019, Coffee Day Enterprises, ie. #CCD, #CafeCoffeeDay has the folliwing potential. Would encourage people to ready/watch why CCD collapsed at the first placem to understand what is already priced-in.