CCL Products shares doubles in last four months

A small-cap stock of a listed coffee company in India has been defying the trend of the broader indices. The stock of CCL Products (India) has almost doubled since end March till date.

The Guntur-based company is one of the leading coffee exporters from India. It is an export-oriented firm with the ability to import green coffee into India and export the same - free of all duties. It is a leading private label manufacturer of soluble coffee in the world.

CCL has an established presence in the international markets in the traditional spray-dried instant coffee segment and has made a successful entry in the freeze-dried coffee intending to gain share in the promising market segment of liquid coffee.

The company's key markets in Europe, CIS and Far East have recovered after the financial downturn in 2008. It has set up a 10,000 metric tonnes instant coffee unit in Vietnam with an investment of $25 million to explore and expand in new markets.

For the four quarters ended March 2012, the company's net sales were up 38% to Rs 507.4 crore while its net profit rose 40% to 36.9 crore over the previous year. CCL's average operating margins for the last eight years have been 15% - with the company earning above average margins of 19.4% and 17.9% respectively in the last two consecutive years.

With the prospect for coffee prices being positive - the International Coffee Organisation - expects the prices to remain firm - the outlook for the company continues to remains buoyant. The Vietnamese operations are also going to help the company to meet new demand from Far East markets like Japan, China and other ASEAN countries.