CCL Products - Rationalising Valuation Multiple In A VUCA World: Nirmal Bang

Nirmal Bang Report

We cut our target price-to-earning multiple for CCL Products India Ltd. to 21 times i.e. five-year median (from 25 times) on FY26E earnings to factor in the potential uncertainties with respect to all-time high coffee prices (refer our note) and demand over next one year.

While the near-term performance should be a function of contracts entered into by CCL Products last year, future contracts’ durations could be lower, say three-six months as against one year considering the price movement in Robusta on a daily basis.

We don’t see a scenario wherein coffee demand goes down materially and continue to believe that CCL Products should further gain market share in tough times.

While we remain positive, relatively lower demand visibility and working capital debt overhang might offer a better entry point to investors in the near term, in our view.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.