#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.
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.
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#SECTOR #POTENTIAL
โข Coffee Industry - With ~2.25 billion cups consumed worldwide daily, coffee ranks as the second most traded commodity worldwide. The sector is not only large but also exhibits continuous growth in both local currency values and volumes, making it an attractive category for investors. Additionally, coffee consumption tends to remain steady even during economic downturns, highlighting its resilience. โข Indian Coffee market - Indiaโs total instant coffee market stands at โน60 bn, with ~70% of the market in South India. The market is evolving rapidly, driven by a shift in consumer preferences and the rise of cafรฉ culture. Traditionally a tea-drinking nation, India is specialty coffee, the proliferation of branded cafes. โข Global โข Raw seeing rising coffee consumption, particularly among the younger generation in urban areas, largely fueled by the popularity of Coffee market - The global retail coffee market was estimated at $106 bn in 2023 and has grown at a CAGR of ~3% in the last 5 years. Moreover, the coffee market is split between the Roast & Ground (R&G) segment and the Instant Coffee Segment. The R&G segment is a much bigger segment, contributing ~68%, and instant coffee represents ~32% of the industry value. Regionally, European countries are the largest consumer of instant coffee, followed by Russia, the US, Japan and Asian countries. materials - The primary ingredient for producing instant coffee is green coffee beans. On an average, it takes ~1.6 kgs of green coffee beans to produce one kg of instant coffee. The global production of green coffee is primarily composed of Arabica beans (60%) and Robusta beans (40%). Brazil, Colombia, and Ethiopia are the top producers of Arabica green coffee, while Vietnam, Brazil, and Indonesia lead in Robusta green coffee production.
โข Coffee Industry - With ~2.25 billion cups consumed worldwide daily, coffee ranks as the second most traded commodity worldwide. The sector is not only large but also exhibits continuous growth in both local currency values and volumes, making it an attractive category for investors. Additionally, coffee consumption tends to remain steady even during economic downturns, highlighting its resilience. โข Indian Coffee market - Indiaโs total instant coffee market stands at โน60 bn, with ~70% of the market in South India. The market is evolving rapidly, driven by a shift in consumer preferences and the rise of cafรฉ culture. Traditionally a tea-drinking nation, India is specialty coffee, the proliferation of branded cafes. โข Global โข Raw seeing rising coffee consumption, particularly among the younger generation in urban areas, largely fueled by the popularity of Coffee market - The global retail coffee market was estimated at $106 bn in 2023 and has grown at a CAGR of ~3% in the last 5 years. Moreover, the coffee market is split between the Roast & Ground (R&G) segment and the Instant Coffee Segment. The R&G segment is a much bigger segment, contributing ~68%, and instant coffee represents ~32% of the industry value. Regionally, European countries are the largest consumer of instant coffee, followed by Russia, the US, Japan and Asian countries. materials - The primary ingredient for producing instant coffee is green coffee beans. On an average, it takes ~1.6 kgs of green coffee beans to produce one kg of instant coffee. The global production of green coffee is primarily composed of Arabica beans (60%) and Robusta beans (40%). Brazil, Colombia, and Ethiopia are the top producers of Arabica green coffee, while Vietnam, Brazil, and Indonesia lead in Robusta green coffee production.
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#COMPANY #OUTLOOK
โข Overall growth & profitability - They expect growth to be largely driven by rising volumes and value accretive businesses which will also drive EBITDA growth for the company. CCL witnessed a high-single digit of ~10% volume growth YoY at a group level. Further, the company expects the volume growth to be in the range of ~10%-20% as the customers are placing orders with lower volumes to match market prices in the upcoming quarters. โข Domestic business โ The business has been witnessing good momentum. For FY25, they expect the branded business to record an exit-revenue of ~โน300 cr. The company has been taking more price increases than price cuts towards the segment. โข Indian year and 80% in the third year of operations. โข Vietnam operations - They expect the Indian plant capacity addition to commence operations in the ongoing quarter (Q3 FY25) as major trials are through. They expect utilizations to kick in as per their thumb rule which is 30% in the first year, 60% in the second operations - Given the trials and matching of blends takes time, the proposed capacity addition (~5,500-6,000 MT) is expected to commercialize in Q3 FY25. Generally, the thumb rule for FD hovers around in the range of ~30%-35%; however, it expects the same to be in the range of ~40%-45% in its first year of operations. โข The company has acquired several brands from the Lofbergs Group of Denmark, including Percol, Rocket Fuel, Plantation Wharf, and The London Blend. These brands are owned by Food Brands Group, a subsidiary of Lofbergs Group. The goal is to utilize their CASE STUDY expertise and resources to scale the acquired brand into a โน150 cr business within the next 3-4 years
โข Overall growth & profitability - They expect growth to be largely driven by rising volumes and value accretive businesses which will also drive EBITDA growth for the company. CCL witnessed a high-single digit of ~10% volume growth YoY at a group level. Further, the company expects the volume growth to be in the range of ~10%-20% as the customers are placing orders with lower volumes to match market prices in the upcoming quarters. โข Domestic business โ The business has been witnessing good momentum. For FY25, they expect the branded business to record an exit-revenue of ~โน300 cr. The company has been taking more price increases than price cuts towards the segment. โข Indian year and 80% in the third year of operations. โข Vietnam operations - They expect the Indian plant capacity addition to commence operations in the ongoing quarter (Q3 FY25) as major trials are through. They expect utilizations to kick in as per their thumb rule which is 30% in the first year, 60% in the second operations - Given the trials and matching of blends takes time, the proposed capacity addition (~5,500-6,000 MT) is expected to commercialize in Q3 FY25. Generally, the thumb rule for FD hovers around in the range of ~30%-35%; however, it expects the same to be in the range of ~40%-45% in its first year of operations. โข The company has acquired several brands from the Lofbergs Group of Denmark, including Percol, Rocket Fuel, Plantation Wharf, and The London Blend. These brands are owned by Food Brands Group, a subsidiary of Lofbergs Group. The goal is to utilize their CASE STUDY expertise and resources to scale the acquired brand into a โน150 cr business within the next 3-4 years
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CCL PRODUCTS LIMITED 500-620
Expected level 800
Support 400
Expected level 800
Support 400
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Godrej Properties Limited details report
Godrej PropertiesGodrej Limited is the real estate development arm of Godrej Group, which was started in 1897 and the company was established in 1990. It is engaged primarily in construction and real estate development. It focuses on developing residential, commercial and township projects. The company is headquartered in Mumbai and is present in 11 cities in the country. The company maintains an asset light model through joint development and joint venture projects. As of March 31, 2024, the company had 102 active and upcoming projects with a combined developable area of ~223 million square feet with a focus on four core region- Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Pune and Bangalore. It has delivered ~47 million sq ft of real estate since FY18. It has added 66 residential projects with ~136 million sq ft of saleable area since FY18. It has added 10 new residential projects with a saleable area of ~18.9 million sq. ft. and with an estimated booking value of ~โน21,225 crore in FY24. It entered Hyderabad market with 2 land deals with estimated booking value of ~โน5,000 crore. They have ventured into hospitality development via Taj The Trees at Vikhroli (151 keys). The company recognizes revenue upon transfer of control of promised products to customer in an amount that reflects the consideration which the group expects to receive in exchange for those products.
Godrej PropertiesGodrej Limited is the real estate development arm of Godrej Group, which was started in 1897 and the company was established in 1990. It is engaged primarily in construction and real estate development. It focuses on developing residential, commercial and township projects. The company is headquartered in Mumbai and is present in 11 cities in the country. The company maintains an asset light model through joint development and joint venture projects. As of March 31, 2024, the company had 102 active and upcoming projects with a combined developable area of ~223 million square feet with a focus on four core region- Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Pune and Bangalore. It has delivered ~47 million sq ft of real estate since FY18. It has added 66 residential projects with ~136 million sq ft of saleable area since FY18. It has added 10 new residential projects with a saleable area of ~18.9 million sq. ft. and with an estimated booking value of ~โน21,225 crore in FY24. It entered Hyderabad market with 2 land deals with estimated booking value of ~โน5,000 crore. They have ventured into hospitality development via Taj The Trees at Vikhroli (151 keys). The company recognizes revenue upon transfer of control of promised products to customer in an amount that reflects the consideration which the group expects to receive in exchange for those products.
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#SALES #GROWTH
In FY24, revenue grew by 35% YoY to ~โน3,036 cr, led by project deliveries totaling ~12.5 million sq ft. The pre-sales improved by 84% YoY to ~โน22,527 cr. Whereas, the sales volume stood at 20 million sq ft i.e., an increase of 31% YoY. marking a 84% year-onyear growth. The average realization during FY24 was โน12,674 per sq ft for group housing and โน4,280 sq ft for plotted lands. The company launched its first ever hospitality development project Taj The Trees in Vikhroli, Mumbai with 151 keys. The company added 10 new projects of business development with estimated booking value of ~โน21,225 cr. In 9M FY25, the company did a booking of ~โน19,281 cr up 48% YoY with a total area sales of 18.21 million sq. ft. It delivered 11.9 million sq ft. Average realization was ~โน10,588 psf. The revenue registered was โน2,801 cr.
In FY24, revenue grew by 35% YoY to ~โน3,036 cr, led by project deliveries totaling ~12.5 million sq ft. The pre-sales improved by 84% YoY to ~โน22,527 cr. Whereas, the sales volume stood at 20 million sq ft i.e., an increase of 31% YoY. marking a 84% year-onyear growth. The average realization during FY24 was โน12,674 per sq ft for group housing and โน4,280 sq ft for plotted lands. The company launched its first ever hospitality development project Taj The Trees in Vikhroli, Mumbai with 151 keys. The company added 10 new projects of business development with estimated booking value of ~โน21,225 cr. In 9M FY25, the company did a booking of ~โน19,281 cr up 48% YoY with a total area sales of 18.21 million sq. ft. It delivered 11.9 million sq ft. Average realization was ~โน10,588 psf. The revenue registered was โน2,801 cr.
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#EBITDA #GROWTH
Cost of material consumed contributes the highest of the total expense which majorly includes Land and development rights, construction, material and labor, architect fees and other costs.Whereas in case of other expenses, project maintenance cost, advertisement and marketing expense and consultancy charges are major contributors. In FY24, the EBITDA loss was of โน129.7 cr. In Q1 FY24, EBITDA adjusted for provision done of โน155 cr for (repair, maintenance and customer claims against one its project Godrej Summit in Gurugram which was found to have high chloride content in concrete, resulting in corrosion of steel. The company has made an offer to buyback the sold units and has bought back 100 apartments so far and spent โน20- โน25 cr till date. In 9M FY25, the EBITDA loss registered was โน65.6 cr.
Cost of material consumed contributes the highest of the total expense which majorly includes Land and development rights, construction, material and labor, architect fees and other costs.Whereas in case of other expenses, project maintenance cost, advertisement and marketing expense and consultancy charges are major contributors. In FY24, the EBITDA loss was of โน129.7 cr. In Q1 FY24, EBITDA adjusted for provision done of โน155 cr for (repair, maintenance and customer claims against one its project Godrej Summit in Gurugram which was found to have high chloride content in concrete, resulting in corrosion of steel. The company has made an offer to buyback the sold units and has bought back 100 apartments so far and spent โน20- โน25 cr till date. In 9M FY25, the EBITDA loss registered was โน65.6 cr.
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