Mixed quarter with strong revenue growth offset by weak margins; remain positive on the stock given attractive valuations and strong FY22-24 earnings visibility
- Result summary - 3Q revenue/EBITDA/PAT growth of 41.2%/28.2%/24.1% led by weak base, strong order book and seemingly better realizations. Revenue growth came in well ahead of our estimate of 25% growth.
- Topline - Overall Revenue growth of 41.2% yoy to Rs 4.2bn, standalone business grew 38.2%, subsidiaries grew 46.3% despite a high base of 41% indicating strong offtake from Vietnam and domestic branded business.
- Margins - Gross margin fell 730bps due to sharp 930bps fall in standalone business margin given the sharp rise in coffee prices. EBITDA margin fell 220bps to 21.9% with standalone margins decreasing 510bps to 16.2% and subsidiaries margins improving 220bps to 30.9%. Margin contraction was partially offset by lower employee and SGA expenses.
- Earnings - PAT came in at Rs58.5cr below our estimate of Rs63cr.
- Dividend - Declared interim dividend of Rs 3/share.
- View - While margin performance was disappointing (but transient in our view), growth momentum seems to be picking up well which should help sustain the ongoing re-rating journey for the stock. We currently have a BUY rating with a TP of Rs 500, we will revisit our estimates post con call tomorrow at 10:30am. Con call details - 022 6280 1304.
Shares of CCL Products (India) Limited was last trading in BSE at Rs. 436.05 as compared to the previous close of Rs. 431.35. The total number of shares traded during the day was 27487 in over 1758 trades.
The stock hit an intraday high of Rs. 439.70 and intraday low of 425.05. The net turnover during the day was Rs. 11913573.00.
Source : Equity Bulls