CCL Products

The capacity addition plans for CCL provides good visibility for potential growth in the coming years:-

1. Currently at 37500 Tons, they are planning to add 16000 Tons in Vietnam (coming on line this quarter) and 16000 Tons in India (coming on line end of calendar year 2023). Additionally, they have also added 6000 Tons of Freeze Dried Capacity in Vietnam (in 2024). In total, this will take them up to ~76000 Tons from 37500 Tons in the next ~1.5/2 years

2. This is a cost plus model and if coffee/prices go up/down it does not really matter. They make money on more volumes as they charge in EBITDA/Ton. The management is guiding 15-20% growth for next year in volumes with the new added capacities.

3. This quarter should be the first one where we will see the effect of the first new capacities coming on board. Vietnam additional capacity was commissioned in Q3 as per the concall, and we should see commercialisation in Q4 FY 23. Additionally, they took some plant shutdowns in Q3 to put the lines in place, and hence hopefully Q4 should be much better than Q3 in terms of volumes/EBITDA.

4. Consumer business setup is also an interesting part of the story covered in detail in above thread. As per last concall, it is growing and has broken even now. It will be interesting to see how this element plays in and supports the potentially strong growth in the the B2B business.

5. Valuations/charts all reflecting strong growth expectations. Will be interesting to see if they can deliver.

Disclosure: I am invested and biased. This is not investment advice, I am not a registered advisor.