CCL Products

(Vaibhav1512) #63

There is 5cr sales which could not be realized in this quarter due to invoicing issues. So the sales would have been around 240 cr. To asses how much this contributes to PAT, and if you take into account export incentives by govt which can only be realized with sales realization, it can boost PAT upwards by ~3 cr to make PAT ~ 33 cr. May be that is the reason management is trying to justify their stand.

(Gurjot) #64

Personally found NOTHING wrong with the management interview.

He compared 1st Half’15 figures with 1st Half’16 figures and said there has been a growth in the numbers instead of a decrease which is true as well.

I don’t think there is any denial mode in the management’s comments. They are extremely confident about achieving their guidance numbers of 1000 cr yearly revenue (which is 20-25% growth and not a very high target).

Senior management of businesses are not sitting puppets to simply accept the biased/twisted views of the TV analysts. They can easily have the same lens of the management but would rather focus on all the negative aspects. (weak numbers, de-growth, etc)

Personally, would love to hold a big chunk of CCL in my portfolio but current valuations mean the growth story must continue for quite a few years for good returns. Waiting for it to cool down or as BM says “The stock market is a flowing river with plenty of good fish”

(Quest4Value) #65

The valuation does seem stretched.Mr Market seems to anticipate an outstanding growth or has a high degree of confidence on future earnings.In my opinion this is a good company but currently does not offer any margin of safety.

(Gurjot) #66

Q3 Results

Absolutely flat results with no growth in revenue (standalone or consolidated).

Pretty poor set of numbers IMHO. The Chairman was dismissive of all arguments about their growth after Q2 results.

After providing a guidance of more than 1000 cr topline for the year, they are only at 657 cr after 9months.

Eagerly awaiting the concall/management interview.

Disc - Initiated a small position in the recent fall and was looking to double up before the results itself…started trending upwards viciously over the last 2 days and I backed out, lucky me!!!

(Vaibhav1512) #67

i dialled in CCL’s conf call. plz find below my notes

  1. the lower sales was due to a) declin in green coffe prices by around 20% b) plant shutdown for 10-15 days c) deferment of few orders from customers d) no export incentive recognised in the qtr
    2 CCL did not recognise export incentive in Q2 also. the export incentive receivable is now 14cr. co will book incentive only once it receives from govt. there was some technical glitch due to which they have not received export incentive. i think this export incentive will directly flow into bottom line post tax. so impact on profits post tax will be around 10 crs.
  2. the mgmt has maintained the guidance of 25% pat growth. they expect around 195 cr Ebitda for FY16. this does not include exports incentive.
  3. deferral of orders is on request of few customers. however, this customers have given assurance of procuring higher volume in FY17. these customers are mainly based out of Russia. there are queries from other players in russian market.
  4. continental is being launched in 4 more states. Goa, Kerala, UP are the states in which it is recently launched.
  5. the mgmt also expects US mkt to open up in a year or so. the mkt of instant coffee in US is 75,000 tonnes ( more than 3 times CCL’ current capacity)

disc: invested

(Gurjot) #68

The market seems to agree with my assessment of poor numbers with a good 8% gash!

So after listening to the concall yesterday I’m fairly bullish with the medium term outlook of this company (have so many options for growth), got a good opportunity to add some more today :grinning:

I’m really anxious about Q4 with all the following managements now:
CCL (still guiding a comfortable 25% PAT growth for the year)
MPS (asking us to forget QoQ performances and silently promising a very good Q4)
Kitex (promising a much better Q4 making up for lost sales in Q3)

I wonder how many people trust these managements’ speak!

(Rohit Balakrishnan) #69

The promoter spoke about US being a big market for them. Any idea who are the major suppliers in the US market currently?

(Gurjot) #70

I remember them clearly stating that most of the suppliers to the US market (75000 tonne) are currently from Brazil and they are dominating the US market. However, the Brazilian suppliers don’t have the level of stringent manufacturing quality that CCL currently has. So with the US FSMA legislation expected to be enforced in 6-9 months, they are confident of getting deep into the US market. Also gave examples of a number of US customers already inquiring about CCL’s products (not sure if they have also sent them samples) because they need to ready with the high quality imported coffee the day FSMA is enforced or those customers stand to lose out in the US market. The management gave the example of the time when such a law came into force in Europe, how they were able to capture market share.

(Rohit Balakrishnan) #71

Yup. I was on the call too. Wanted to corroborate this and check who are the leading suppliers to the US markets. That will help us validate this argument that the management claims.

(Anil) #72

Hi Rohit, Gurjot,
I’m a new / infrequent visitor who just read your posts. I have covered Tata Coffee in the past. They have a big instant coffee export business, as well as own consumer brands in the US. Not sure if they export to the US, but given their footprint it would be quite likely that they do.

Disc: Not yet bought

(Ravenrage) #73

CCL Products is selling through

(manjushree) #74

It seems to be selling soup also. I never knew about it.

(Vaibhav1512) #75

Soup is not of CCL products, if you see the product details, the continental soup is of HUL.

(mukul aggarwal) #76

Q4 results out:

(mukul aggarwal) #77

Management interview:

(manjushree) #79

The coffee sachet are being given while travelling in trains. Recently, when I was travelling from Mumbai to Vadodara, and had asked for coffee - it was “Continental Speciale” sachet. Earlier it used to be Nesacafe.
So it has started making inroads in railways. How much impact it will have going forward?

(Saji John) #80

Did you like the taste?

(manjushree) #81

It was okay. Nice…at par with Necafe.

(Hitesh Patel) #82

I had ordered a couple of variants of Continental Coffee from amazon and really liked the taste. I think taste wise its as good as or probably better than nescafe.

They need to set up proper marketing network and get some ad support for their products.

(Ayush Mittal) #83

I have been regular user of CCL coffee…i order it from Amazon and have stopped using Nescafe. Same taste at cheaper price :slight_smile: