CCL PRODUCTS Q2FY23 Earnings Call Highlights
Next year, adding another 16,000 tonnes to already existing capacity of 37,500 and the subsequent year, which is in '24, will add another 16,000 tonnes. So it will be done in a phased manner.
From the last 3, 4 quarters, have been growing at a healthy volume growth of around 20% to 25%, and that's the growth momentum look to maintain and to maintain this growth momentum, will require these capacities to be up and running in this base manner. That's the reason have been aggressively expanding capacity.
This growth is actually quite a well-rounded growth and it is coming from all quarters. Growth is coming from U.S. markets or European markets,the Southeast Eastern markets, etc.. and has enabled co to gain market share and add to it the domestic volumes are also growing at a healthy pace.
Getting growth with bulk customers. Also adding a lot of departmental stores, and the domestic market is growing. Supplying to the top guys who use coffee. So the top cold coffee brand or the top confectionery brand, these are all buyers of CCL’s coffee.
From next quarter, will start doing some clients and also expect to get some commercial volumes also.
Getting approximately 25% to 30% additional top line because of the coffee bean prices.
As far as the product mix is concerned, don't see a lot of changes happening here. The coffee prices are still high. There is a lot of demand. Fundamentally, the margin profile looks to be or will be similar in the coming quarters.
Because volumes have increased with certain customers who like that in the U.S. are some of the major clients that are dealing with, they call on credit basis and these partners are highly reliable and more of a long-term business. So when the volumes were increasing with these inventory days also was increasing. But going forward, there's going to be more volume growth coming in from other customers as well where we are working on a CAD basis.
Used to have single play in products with either America or making a finished product and supplying to stores. But over the years, developed the capabilities to such an extent that to offer the entire wave of potential product, like new specialty products, like special coffee or in instant format, cold brews, functional coffees, flavored coffees, you name it. So any pertaining to coffee, ccl can do it.
Have continued to grow at around between 30% to 40% in domestic market. Looking to maintain this mentum at least for some period to come. Now expanding network in the other zones like East and West, which are quite not as big as South.
Retail touch points, now directly servicing to almost 1 lakh 20,000 outlets, out of which now 80%, with almost a lakh outlet is still in South. Have added around 20,000, 25,000 outlets in the rest of the zones, Northeast and West and are looking to end up close to 135,000 to 140,000 outlets, which will be directly servicing.
Small pack is around 20% of portfolio. U.S. market is also approximately out of almost 15% to 20% of portfolio.
It takes 2 to 3 years minimum to go to around 80%, 85% utilization. Vietnam will have 4 to 6 quarters of head-start.
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