CCL Products (India) has secured board approval for a ₹2 billion guarantee to JP Morgan Chase Bank, marking a significant corporate finance decision. The guarantee has been specifically approved for Continental Coffee SA, the company's subsidiary operating in Switzerland.

Board Approval Details

The board's decision represents a substantial financial commitment, with the guarantee amount reaching ₹2 billion. This approval demonstrates the company's strategic support for its international subsidiary operations.

Strategic Implications

The guarantee approval indicates CCL Products' commitment to supporting its Swiss operations through established banking relationships. Continental Coffee SA, as the beneficiary subsidiary, will have access to this guarantee facility through JP Morgan Chase Bank, one of the leading global financial institutions.

This corporate decision reflects the company's approach to managing its international subsidiary financing requirements and maintaining strong banking partnerships across different geographical markets.

CCL Products (India) Limited , a leading coffee manufacturer, has reported a strong financial performance for the second quarter, with significant growth across key metrics and expansion into new product categories.

Financial Highlights

The company achieved a 52.7% year-on-year growth in revenue, reaching INR 1,128.21 crores in Q2 compared to INR 738.74 crores in the same quarter last year. This robust performance was accompanied by substantial improvements in profitability:

All figures in INR crores

For the first half, CCL Products reported:

• Revenue of INR 2,186.25 crores, up 44.5% year-on-year
• EBITDA of INR 360.05 crores, a 33.7% increase
• Net profit of INR 173.31 crores, growing by 19.2%

Domestic Market Performance

The company's domestic market showed strong momentum:

• Gross sales of INR 160 crores in Q2 and INR 310 crores in H1
• Branded business contributed INR 210 crores in H1
• Volume growth exceeded 20% for the quarter

Operational Insights

• Capacity Utilization: The company reported a blended capacity utilization of 65-70% for the quarter, with new capacities operating at 15-20% utilization.
• EBITDA per kg: Improved to approximately INR 130, up from INR 120 in the previous quarter, driven by better product mix and operational efficiencies.
• Debt Reduction: The company maintains its guidance of reducing net debt to INR 1,350 crores by December and INR 1,200 crores by March.

Strategic Initiatives

CCL Products is actively pursuing its vision to transform into an FMCG company:

• Expansion into new product categories, including iced tea and snacks
• Test marketing of new products to ensure market fit before full-scale launches
• Direct distribution to 130,000-140,000 outlets, with plans to double this reach in the next three years
• Investment in renewable energy through a 26% stake in Mukkonda Renewables, aiming to meet 50-60% of energy requirements through green sources

Market Outlook

The green coffee market remains volatile, with conflicting reports about crop conditions, particularly in Vietnam. The company is closely monitoring the situation and expects more clarity by December when the new crop starts flowing.

CCL Products maintains its guidance of 15-20% EBITDA growth for the full year, with expectations leaning towards the higher end of this range.

Management Commentary

Praveen Jaipuriar, CEO of CCL Products, stated, "We are seeing strong growth across our business segments, with our branded business and private label operations both contributing significantly. Our strategic initiatives in new product categories and distribution expansion are progressing well, positioning us for sustained growth as we evolve into a comprehensive FMCG company."

As CCL Products continues to diversify its product portfolio and strengthen its market presence, the company appears well-positioned to capitalize on growth opportunities in both domestic and international markets.