Buy CCL Products India Ltd., target Rs 304: Edelweiss Financial Services

Edelweiss Financial Services has a buy call on CCL Products India Ltd. with a target price of Rs 304. The current market price of CCL Products India Ltd. is 246.65. Time period given by analyst is year, when CCL Products India Ltd. price can reach defined target. Edelweiss believes FY16 was a challenging year for CCL Products India due to falling coffee prices. Despite this, CCL managed to deliver EBITDA and PAT growth of 20% and 28% YoY (excluding export incentives), respectively. We estimate volume CAGR of 14% over FY16-18 (17% during FY10-16) led by capacity expansion in India and better capacity utilisation in Vietnam (from 58% in FY16 to 85% in FY18). The stock is currently trading at P/E of 21.2 FY17E and17.1FY18E, respectively.