Standalone net sales grew by 4.2% YOY to Rs132.6 crs driven primarily by volumes. Volumes were up 9.6% to 3125 MT from 2850 MT corresponding quarter last year. Vietnamese operations picked up passed with production of ~1150 MT this quarter and volumes sale of ~900 MT. Accumulate.

1. India Research
Sector: FMCG
CCL Products Ltd.
The company recently released its Q1FY15 results. The results are a
testimony to the management’s strategy of profitable growth. The
company has enumerated the following focal points which will drive
growth in the future:
o Firstly in domestic markets the company plans to expand its
presence of its retail brand ‘Continental Coffee”. Priced at a
premium this is offering is not a head along war with Nestle & HUL.
The product is a freeze dried offering as compared to the existing
offerings of instant coffee in India (are primarily spray dried coffee).
Over the next 2 to 3 years CCL wants ~ 15% of the existing capacity
in India to be used for domestic markets.The domestic markets are
much more profitable as well.
o Secondly, in Vietnam the company is expected to reach 50% capacity
utilization in FY15. Strong Demand coupled with cost savings on
account of local procurement of raw bean has enabled the company
to be competitively present in the market. Q1 saw profit out of
Vietnam operations. These operations enjoy a 4 year tax holiday and
as the contribution from this region increases going forward the tax
saving will enable profits to grow at a higher rate.The company plans
to double the capacity to 20,000 MT for the Vietnamese operations
next fiscal with minimum capex as the foundation was already setup
when the first has was being setup. This too will add volumes and
scale to CCL operations over the next 2 years.
Result Highlights:
Standalone net sales grew by 4.2% YOY to `132.6 crs driven primarily by
volumes.Volumes were up 9.6% to 3125 MT from 2850 MT corresponding
quarter last year. Being a lean quarter (summer months globally) the mix
was tilted towards the sub-premium quality of coffee. Realizations per kg
were 5% lower at `424/kg vs. `447 per/kg. On a consolidated basis net
sales grew by 29.5% to `175.6 crs. Subsidiaries sales were up 400%YOY to
`43 crs. Vietnamese operations picked up passed with production of
~1150 MT this quarter and volumes sale of ~900 MT. Realizations were
in the range of `400-440/ kg in Vietnam. For FY15 the company expects
consolidated volumes of ~20,000 MT in which Vietnam will
contribute ~5000 MT. We expect topline to grow at ~20-22% CAGR
over the next 2 to 3 years.
On the operating level the mix adversely impacted the margins. Operating
profit in standalone operations was down from `27.7 crs to `25.3 crs.
Operating margins contracted by 280 bps to 19%. Seasonality in demand in
export markets as well as Re./$ translation impacted profitability growth. .
Consolidated EBIDTA for Q1FY15 grew by 19.5% to `36 crs with margins
contracting by 170 bps to 20.5%. Margins in the subsidiaries were at ~25%
with absolute level operating profit at ~`10 crs. On the PAT Level
standalone operations was flat at `15.7 crs as tax rate for the quarter was
Result Update Q1FY15
Date 30th July 2014
CMP `69.2/-
52 week High / Low `75.7/`24.1
Equity Cap (current) `26.6 crs
FaceValue `2/-
Mkt. Capitalization `920 crs.
BSE SENSEX 25,991.23
NSE - NIFTY 7,748.70
NSE Code CCL
Bloomberg Code CCL IN
BSE Code 519600
Shareholding Pattern @ 30-06-14
Promoters 44.54%
FII & DFI 9.17%
Public & Others 46.30%
3-MTS 6-MTS 1-YR
CCL 28.1% 57.2% 172.0%
Sensex 15.7% 24.1% 37.6%
Nifty 15.4% 24.5% 39.6%
Brief Financials FY13A FY14A FY15E
Net Sales 650.7 716.8 862.2
Sales growth 10.2% 20.3%
EBITDA 121.3 143.1 180.5
EBITDAM 18.6% 20.0% 20.9%
PAT 47.5 64.4 96.2
EPS 3.6 4.8 7.2
P/E (x) 19.7 14.5 9.6
Nilesh Doshi
Tel: +9122-66638950
Nilesh.doshi@tssl.in
Accumulate

2. CCL Products Ltd. – Q1FY15 2 30th
July2014
India Research
Sector: FMCG
lower. Consolidated PAT grew much faster at 587% to `20 crs. on the ack
of Vietnamese operations breaking even on the PAT level. We expect
Operating profit margins to remain in range of 19-20%. PAT will grow
much faster as Vietnamese operations ramp up and become PAT
positive.The tax holiday will further perk up growth. We expect PAT
to grow by ~35-40% for the next 2 to 3 years.
Outlook &Valuations:
We believe the growth levers for CLL products to be well placed. The
company’s focus on growing its presence in the domestic market with a
strong brand coupled with ramp-up ofVietnamese operations will pave the
road to healthy profitable growth for the next 2-3 years. At the CMP of
````69.2/- the stock trades at 9.6x its FY15E estimated EPS of ````7.2/-.
We recommend investors to ACCUMULATE the stock.
Quarterly Results

3. CCL Products Ltd. – Q1FY15 3 30th
July2014
India Research
Sector: FMCG
(` Cr.)
(YE March 31) STANDALONE CONSOLIDATED
Q1FY
15
Q1FY
14
%
Chg.
FY14 FY13
%
Chg.
Q1FY
15
Q1FY
14
%
Chg.
FY14 FY13
%
Chg.
Net Sales 132.6 127.2 4.2% 611.1 584.8 4.5% 175.6 135.6 29.5% 716.8 650.7 10.2%
Other operational
Income
Total Oper.
Income(TOI)
132.6 127.2 4.2% 611.1 584.8 4.5% 175.6 135.6 29.5% 716.8 650.7 10.2%
Raw Materials Cons. 84.1 72.1 16.6% 357.3 353.3 1.1% 114.1 82.1 39.0% 420.0 396.7 5.9%
% to TOI 63.4% 56.7% 58.5% 60.4% 65.0% 60.6% 58.6% 61.0%
Stock adj. (-)Inc /
(+)Dec
-2.7 -5.8 -53.6% -2.1 -0.4 445.6% -8.5 -13.5 -37.4% 5.1 -12.2
% to TOI -2.0% -4.5% -0.3% -0.1% -4.8% -10.0% 0.7% -1.9%
Net Raw Mat adj. for
stock
81.4 66.4 22.7% 355.2 352.9 0.7% 105.7 68.6 54.0% 425.1 384.5 10.5%
% to TOI 61.4% 52.2% 58.1% 60.3% 60.2% 50.6% 59.3% 59.1%
Personnel 5.1 4.7 7.3% 21.9 17.5 25.2% 6.1 5.5 10.0% 25.8 21.2 21.7%
% to TOI 3.8% 3.7% 3.6% 3.0% 3.5% 4.1% 3.6% 3.3%
Packing Material
Consumed
6.7 7.2 -7.7% 33.0 32.8 0.5% 7.3 7.4 -1.7% 34.6 33.8 2.3%
% to TOI 5.0% 5.7% 5.4% 5.6% 4.2% 5.5% 4.8% 5.2%
Power & Fuel 7.9 7.6 3.5% 38.7 40.0 -3.1% 10.5 8.6 22.3% 45.6 44.1 3.5%
% to TOI 5.9% 6.0% 6.3% 6.8% 6.0% 6.4% 6.4% 6.8%
Other expenses 6.4 13.6 -53.4% 34.8 34.5 1.0% 10.1 15.3 -34.4% 42.6 45.8 -7.0%
% to TOI 4.8% 10.7% 5.7% 5.9% 5.7% 11.3% 5.9% 7.0%
Total expenditure 107.3 99.5 7.9% 483.6 477.6 1.3% 139.7 105.5 32.4% 573.7 529.4 8.4%
Operating Profit 25.3 27.7 -8.8% 127.5 107.3 18.9% 36.0 30.1 19.5% 143.1 121.3 18.0%
OPM (%) 19.0% 21.8% 20.9% 18.3% 20.5% 22.2% 20.0% 18.6%
Non-Operating
Income
0.4 0.1 278.1% 0.9 1.4 -35.8% 0.9 0.2 356.5% 2.6 1.9 40.2%
Interest 1.9 2.1 -13.5% 7.3 12.0 -39.1% 4.2 3.8 10.0% 17.1 20.7 -17.4%
Depreciation 2.4 3.5 -31.1% 13.0 15.9 -18.4% 6.7 6.8 -2.0% 29.1 28.6 1.6%
PBT before Extra-
ord
21.4 22.2 -3.5% 108.2 80.8 33.9% 25.9 19.6 32.1% 99.6 73.9 34.8%
PBT (%) 16.1% 17.4% 17.7% 13.8% 14.7% 14.4% 13.9% 11.4%
PBT 21.4 22.2 -3.5% 108.2 80.8 33.9% 25.9 19.6 32.1% 99.6 73.9 34.8%
Prov. for Tax- Cur 5.8 6.6 -11.8% 34.5 25.1 37.7% 5.8 6.6 -11.8% 34.7 25.2 37.5%
Tax/PBT (%) 27.2% 29.8% 31.9% 31.0% 22.5% 33.7% 34.9% 34.2%
Profit after Cur. Tax 15.6 15.6 0.0% 73.7 55.8 32.1% 20.1 13.0 54.4% 64.9 48.6 33.3%
Prov. for Tax- Def -0.1 0.3
-
154.7%
0.4 1.2 -62.4% -0.1 0.3
-
154.0%
0.4 1.2 -62.4%
Profit after Tax 15.7 15.3 2.6% 73.3 54.6 34.2% 20.2 12.7 58.7% 64.4 47.5 35.7%
PAT (%) 11.84% 12.03% 11.99% 9.33% 11.51% 9.39% 8.99% 7.29%
Share of Profit/(Loss)
of Associates
Minority Interest
Reported PAT 15.7 15.3 2.6% 73.3 54.6 34.2% 20.2 12.7 58.7% 64.4 47.5 35.7%
PAT (adj. For
extraord)
15.7 15.3 2.6% 73.3 54.6 34.2% 20.2 12.7 58.7% 64.4 47.5 35.7%
Face Value 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Equity Share capital 26.6 26.6 26.6 26.6 26.6 26.6 26.6 26.6
No. of shares (in crs.) 13.3 13.3 13.3 13.3 13.3 13.3 13.3 13.3
EPS (````) 1.2 1.2 2.6% 5.5 4.1 34.2% 1.5 1.0 58.7% 4.8 3.6 35.7%

4. CCL Products Ltd. – Q1FY15 4 30th
July2014
India Research
Sector: FMCG
Team
Analyst Designation Sector Email Telephone
Nilesh Doshi President (Research) nilesh.doshi@tssl.in +9122-6633 8950
ShivaniV.Vishwanathan Sr. Research Analyst FMCG shivani.mehra@tssl.in +9122-6663 8956
Nisha Harchekar Sr. Research Analyst Chemicals nishaharchekar@way2wealth.com +9122-6146 2952
Institutional Dealing Designation Email Telephone
Ajay Prabhudesai AssistantVice President ajay.prabhudesai@tssl.in +9122-4027 8930
Mitul Doshi Senior Executive mitul.doshi@tssl.in +9122-4027 8932
GautamVyas Institutional Sales Trader gautam.vyas@tssl.in +9122-4027 8934
Corporate Office:
3rd Floor, Hincon House,Tower - B, 247 Park, L.B.S. Marg,Vikhroli (W), Mumbai, Maharashtra – 400083, India.
Tel No. 91-22 – 6663 8900 Email: research@tssl.in
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www.way2wealth.com
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