CCL Products Consistent growth and results - Buy

Highlights:

- CCL Products (India) Ltd manufactures Soluble Instant Spray Dried Coffee Powder, Spray Dried Agglomerated and granulated Coffee, freeze Dried Coffee, and Freeze Liquid Coffee.

- In Q1 FY16, Net profit stood to Rs. 302.19 million against Rs. 202.10 million in the corresponding quarter of previous year, an increase of 49.52%.

- The company’s net sales stood at Rs. 2196.50 million in Q1 FY16 from Rs. 1756.15 million over the corresponding quarter of previous year, increased by 25.07%.

- During the quarter, operating profit is Rs. 492.82 million as against Rs. 368.17 million in the corresponding period of the previous year, registering a growth of 33.86%.

- Reported EPS of the company stood at Rs. 2.27 in Q1 FY16 as compared to Rs. 1.52 in Q1 FY15, an increase of 49.52%.

- During the quarter, PBT increased to Rs. 398.43 million as compared to Rs. 258.88 million over the corresponding quarter of previous year, registered a growth of 53.91%.

- Total income of the company stood at Rs. 2202.75 million in Q1 FY16 against Rs. 1764.70 million in the corresponding quarter of the previous year.

- Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 28% over 2014 to 2017E respectively.

Valuation: At the current market price of Rs. 206.00, the stock P/E ratio is at 23.70 x FY16E and 21.43 x FY17E respectively. Investors are recommended to buy this stock for a price target of Rs267.00 for medium to long term investment.

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