Revenue Mix

#SALES #GROWTH

In FY24, the company had salecof ₹5,014 cr and it increased by 11.9% YoY. Electrical cable constituting ~85% of revenue mix, has ₹4,000 cr revenue from different types of wires and ~₹200 cr from cables. Wire volumes increased by ~15% and cable by ~26% YoY, driven by increased activity in the real estate, automobile, and communication sectors; volume decline of ~30% was seen in OFC segment. This drop was largely due to the absence of government tenders and finalization of contracts with telecom companies. In 9M FY25, the net sales was ₹3,723 cr v/s ₹3,613 cr in 9M FY24, an increase of 3% YoY. Revenue from EC, CC, Copper rods and Others was ₹3,108 cr, ₹385 cr, ₹1,203 cr and ₹191 cr, respectively. EC and others grew by 3% and 19% respectively, while, CC and copper rods de-grew by 5% each. For Q3 FY25, in volume terms, electrical wires contracted by 15% while metal-based products within the CC segment saw a 5% decline. Optic fiber cable volume grew by 7% YoY.

#EBITDA #GROWTH

In FY24, the EBITDA was ₹588 cr and expanded by 15.5% YoY. The rise was mostly owing to increased sales, and favorable gross profit. In 9M FY25, the EBITDA was ₹370 cr v/s ₹427 cr in 9M FY24, and de-grew by 13% YoY. This decline can be attributed to lower sales and high cost inventory. Business sentiments and electrical wires sales were impacted by declining copper prices for most of the quarter, high-cost inventory carried over from the previous quarter, and destocking at trade levels.

#PAT #GROWTH

In FY24, the net profit was ₹506 cr and grew by 16.4% YoY. Increase can be attributed to higher sales and expansion in other income owing to gain in mutual funds. Tax rate stood at 24.6% for the year. Finolex Industries, being an associate company of Finolex Cables, impacts the share of profit from associates, leading to some fluctuations in the company's consolidated net profit. In 9M FY25, the net profit was ₹326 cr v/s ₹370 cr in 9M FY24, a decline of 12% YoY. This decline was majorly led by operating profits. The share of profit or associate contributed ₹183 cr (stronger performance by Finolex Industries in Q1 FY25) v/s ₹96 cr in 9M FY24.

#EBITDA #MARGIN

In FY24, the EBITDA margin was 11.7%. Margins remained at similar levels of previous year as the optical fibre cable (OFC) segment sales remained low owing to subdued orders. ~1.5% of revenue will be used for marketing spends, going forward. The OFC segment predominantly being in a B2B category and reliant on government tenders and telecom companies, experiences lower EBITDA margins compared to electrical cables/wires. In 9M FY25, the EBITDA margin dropped to 9.9% v/s 11.8% in 9M FY24. The EBIT margin from electrical cables segment was 10.4%, communication cables at 1.7%, 0.3% from copper rods and 1.6% from others during the period v/s 13%, 2%, 0.2% and 1.4%, respectively in 9M FY24.

#PAT #MARGIN

In FY24, the PAT margin was 10.1% and it expanded owing to higher operating profits and other income. In 9M FY25, the PAT margin was 8.8% v/s 10.2% in 9M FY24.

#ROCE

In FY24, the ROCE stood at 18.6%. In wires, capacity utilization was 72%, in cables it was ~50% and in optic fiber cables also it was 50%. Company will look to add capacity in wires after it exceeds 75% utilization. In H1 FY25, in wires, capacity utilization was ~65%. Through backward integration, compounds, copper rods, glass fibers, and other raw materials are produced in-house. This approach provides enhanced control over the availability, pricing, and quality of raw materials, improving manufacturing efficiency and enabling the production of highquality products at competitive prices.

#COMPANY #POTENTIAL

• The W&C industry saw significant growth, rising to ~₹84,500 cr in FY24 from ₹74,800 cr in FY23; of this branded market size is 74% and unbranded is 26%. This expansion, propelled by sectors such as power, railways, and real estate, is projected to continue at a CAGR of 13% from FY24 to FY27, reaching an estimated market value of ₹1,20,000 cr. • The FMEG industry achieved a market size of ~1,02,600 cr in FY24 and is projected to grow at a CAGR of 8% from FY24 through FY28. Of this, fans market size was ₹15,000 cr, lighting ₹24,000 cr, switch & switchgear ₹31,500 cr and home & kitchen appliances at ₹32,100 cr. • The booming real estate market is driving increased demand for high-quality wiring and cabling solutions. As new buildings and complexes are constructed, the need for reliable electrical infrastructure grows, directly boosting sales for W&C. Also, improved for transmission infrastructure, benefiting the sector. road connectivity between rural and urban areas has elevated living standards in rural households, significantly increasing demand for basic electrical needs. While seven states have achieved full electricity access, over 1.18 million households still lack electricity. • The growth in power generation and transmission, driven by increasing demand and the shift to renewable energy, presents a major opportunity for the wire and cable industry. India’s goal to install 500 GW of renewable energy by 2030 will boost demand • The market size of EHV is estimated to be ~₹3,500 cr, with significant players such as Universal, KEI Industries, KEC International, Polycab India, Torrent Cables, Sterlite Power and LS Cables, a Korean company manufacturing up to 220 kV in India. • The entry of UltraTech Cement and Adani Enterprises into the wires and cables space introduces a new competitive dynamic for the industry.

#COMPANY #OUTLOOK

• The company is planning to achieve ₹500 cr revenue from FMEG segment over the next 2-3 years. • The EHV cables order book stands at ~₹350 cr, with ₹250 cr anticipated to be booked in FY25. The company plans to diversify its product offerings by entering the Railway and Instrumentation cables sectors. • In the electrical cables category, construction wires contribute ~60%-65% towards the segment’s revenue, followed by automobile & agriculture at ~10%-12% each and remaining ~30% from industrial applications. In the communication cables category, OFC contributes ~67% towards sales and balance is from private telecom operators and metal based industries. • The electron beam facility is being set up with two machines (1.0 MeV and 1.5 MeV) to manufacture wires and cables using radiation technology. This will enable the production of high-performance products, such as solar cables, electrical wires for housing, and railway instrumentation cables, with improved temperature ratings (up to 150°C) and resistance to environmental factors and abrasion. The growing demand in the electric vehicle sector will also drive production of EV battery cables. • A capex of ₹500 cr over 18 months has been committed to enhancing manufacturing capabilities at Urse, Goa, and Roorkee. This investment focuses on increasing production capacity for construction, railways, instrumentation, solar power, and automotive sectors, bringing in-house previously outsourced processes, and expanding the optic fiber line. Certain lines commenced operations in Q2 FY25. • The Preform facility structure is nearing completion, with production expected by the end of CY24. This will double fibre capacity from 4 million to 8 million kms and increase cabling capacity from 8 million to 10 million kms, fully aligning with the growing demand for optical fiber cables later in the year. Additionally, auto-cable capacity at the Uttaranchal site is being expanded, with new equipment slated for installation in FY25.

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CCL Products Limited (CCL) company details report

CCL Products Limited (CCL) specializes in a diverse range of coffee products via converting raw coffee beans into instant coffee powders. The company is engaged in the manufacturing of key product categories, including soluble instant spray dried coffee powder, spray dried agglomerated & granulated coffee, freeze dried coffee, roasted coffee, roast & ground coffee as well as freeze concentrated liquid coffee. CCL’s instant coffee is prepared by roasting and processing Arabica and Robusta coffee beans. In addition to this, the company offers a range of in-house products and supplies flavored, decaffeinated, organic, rainforest, fair trade, dual & triple certified as well as chicory coffee mix as per specifications of the customer. It has top private label instant coffee manufacturers across the globe as its clients. The company exports its products to more than 100 countries and supports more than 250 brands with sustainable supplies - both quality and quantity. They have offered more than 1,000 recipes for the clients to choose from. Currently, the company has 4 manufacturing facilities - Duggirala (Guntur District of Andhra Pradesh), Kuvvakolli (Chittoor District, Andhra Pradesh), Switzerland and Vietnam, with an overall capacity of ~55,000 tonne. Having succeeded in placing their coffee on the world markets, CCL launched its ‘Continental Coffee’ brand for the Indian market, which should act as a major growth catalyst, going ahead. The company has been strategically expanding its footprint in the B2C branded coffee market, both domestically and globally. It has further grown its branded business in India, maintaining a strong position in the South Indian market. To enhance its domestic presence, CCL is widening its distribution network by increasing retail outlet coverage, expanding ecommerce channels, and establishing vending machines, cafes, and kiosks.

Company Product list

#SALES #GROWTH 5 Year CAGR 19.7%

FY24 witnessed significant challenges in terms of rising green coffee prices and geopolitical crisis. Despite this, sales grew by ~28% YoY to ₹2,654 cr, backed by ~14% YoY volume growth (relatively lower domestic due to the breakdown of certain units in Q2 FY24). The business witnessed strong performance with a revenue of ₹320 cr v/s ₹250 cr in FY23. Of which, ~₹210 crore was towards pure branded (retail) business and the rest was for bulk & private labels. Revenue for H1 FY25 grew by ~20% YoY to ₹1,511 cr, led by rising volume growth. The domestic business continued its strong performance reporting a gross revenue of ~₹200 cr in H1 FY25. Out of this, ₹135 cr was derived from the retail branded vertical. The company is focusing on expanding its retail business in the domestic market with major focus on southern India.

#EBITDA #GROWTH

Despite volatility in coffee prices, EBITDA increased by ~11% to ₹445 cr in FY24. Further, during Q4 FY24, other expenses rose YoY because of increase in small packaged orders, leading to higher packaging overheads. Major expenses constituted cost of materials consumed 61%, employee benefit expenses 5% and other expenses 19% (largely towards power & fuel and packing materials). In H1 FY25, EBITDA rose by ~24% YoY to ₹267 cr, largely driven by rising volumes and value accretive businesses.

#PAT #GROWTH

During FY24, PAT declined by ~12% YoY to ₹250 cr, impacted largely due to higher interest cost and depreciation as compared to previous year. Finance cost increased significantly due to rising capex for their expansion project. In H1 FY25, PAT grew by ~20% YoY to ₹145 cr. During the period, finance costs rose due to the ongoing projects which is expected to reduce once the two new projects are onboarded. Post commencement of its operations in Vietnam, CCL was granted a tax break (0% tax) for five years until the end of FY18 and post that, a tax exemption of 50% for the following nine years. However, this has now been converted to “no tax” for the entire lifetime of the company if it meets stipulated conditions of minimum employment, environmental governance, etc.

#EBITDA #MARGIN

In FY24, EBITDA margin contracted by 252 bps YoY to 16.8%, led by contracting gross margins by 395 bps during the period and higher operating expenses. Since the company operates on a cost-plus model, EBITDA margin reduced despite an increase in revenue. Small packs yield higher margins, and the company plans to capitalise on that going forward. In H1 FY25, EBITDA margin expanded by 56 bps YoY to 17.7%, on account of certain higher value and margin accretive contracts. Going ahead, the company plans to focus towards scaling up high-margin branded retail business (Continental Coffee, Plant-based meat protein). Also, EBITDA margin for branded business is anticipated to improve in FY25 as compared to 5%-6% in FY24.

#PAT #MARGIN

PAT margin in FY24 contracted by 429 bps YoY to 9.4%. It was impacted due to increased finance cost and reduced operating profit. In H1 FY25, PAT margin contracted marginally by 1 bps YoY to 9.6%.

#ROCE

CCL Products had a healthy ROCE of ~27% up to FY17. However, over the past years, the ROCE has been on a declining trend and for FY24, it stood at 12.4%. The company has witnessed different patterns in its ROCE over the years. During the expansion phase, wherein the company deploys capex, ROCE tends to reduce; however, it is at its peak level when the utilization is at a higher level. Therefore, being a B2B (business to business) model and considering the nature of its business, i.e., supplying coffee to the end customers, it would always be a capex heavy model during this cycle.

#ROE

The company witnessed peak ROE in FY16; however, thereon it started falling. In FY24, ROE for the company witnessed a downward trend to 15.91%, due to declining net profit.