CCL Products

Some business updates after Q2 2024 concall: Information is best of my knowledge, excuse for any inaccuracies

• New Vietnam production line got impacted due to machine breakdown, still assessing the exact revenue or volume loss, will be updating once survey is completed.
• In this quarter, 12 or 13% volume growth & 20% value growth.
• Will get to know the coffee prices trend by December 2023, as new crop supply comes out from Vietnam & India
• Capex for whole is likely to be around 650 Crore, out of that 260 crore is utilized in H1 and rest will be gaining pace in second half.
  • India Capex – 400 Crore – To be completed by March 2024
  • Vietnam Capex – 250 Crore – To be completed by H1 FY 2025.
• Overall for the Year – Capacity available till FY23 is running at 100% utilization & new capacity will be utilized close to 50%
• Thumb rule: Usually for any new capacity – we will utilize close to 30 – 35% in first year, 60-65% in second year & close to 85% in third year.
  • But for vietnam’s new lines, we have started utilizing 50% from first year.
• Peak debt is likely to be around 1800 Cr and all should be done by March 2025, after which repayment would gain pace. By H1 FY25 all capacity expansion capex should be completed & commercialized.
• Pure brand business is going to be around 200 Crore by end of this year, which will be less than 10% of overall topline of FY24. Looking to grow this business around 30 – 35%. For next couple of years looking to push more on the topline and not much on the EBITDA for branded business, which we will start realizing from third year.
• Margin guidance at group level to be around 18 – 20%, as there are segments that will be accretive & dilutive with new capacities & initiatives.
• Speciality segment is close to 2% of overall volumes. There is some exciting development or innovation is happening around it & there is lot of traction from clients
• On bottom line, because of interest & depreciation kicking in EPS growth is likely to be impacted & lower than Top line & EBITDA growth for 4-5 quarters – My Understanding
• On consolidated basis, Effective tax rate is going to be around 12%.