What is the impact on CCL due to recent surge in coco prices?
High raw material price would increase working capital needs, hence increased debt and negative impact on p&l due to interest.
I think this is a short term pain and may last until mid FY25.
Fitch ratings revised outlook to negative, this report has more details
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CCL-ProductsâCompany-Updateâ17-Apr-2024.pdf (nirmalbang.com)
âRobusta coffee prices continue to make new highs on a daily basis.
Duration of future orders could be lower, say 3-6 months, thereby indicating lesser visibility than in the past.
While we remain positive, relatively lower demand visibility
and working capital debt overhang might offer a better entry point to
investors in the near termâ - Nirmalbangâs view
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