Vintage Coffee & Beverages: Brewing Strong Growth and Strategic Expansion in Q2 FY26

Vintage Coffee & Beverages Limited, an Indian coffee powerhouse, has delivered an outstanding performance in the second quarter of Fiscal Year 2026, showcasing robust growth across key financial metrics. The company reported a consolidated turnover of ₹135.61 crore, marking an impressive 89.52% year-on-year increase. This strong revenue growth translated into significant profitability, with EBITDA soaring by 106% to ₹23.73 crore and Net Profit After Tax (PAT) climbing by 137% to ₹17.83 crore. These figures underscore a period of sustained operational excellence, as the company has consistently delivered strong results for nearly six consecutive quarters.

The company's strategic focus on expanding its market reach and enhancing its product mix has been a critical factor in its success. Vintage Coffee & Beverages operates in various geographies, including Southeast Asia, Europe, Africa, Russia, CIS countries, Latin America, and China, with plans to explore new markets like the USA, New Zealand, and Australia. The product portfolio primarily includes instant coffee (spray-dried and agglomerated) and instant chicory, with a significant move towards value-added products and private labeling. The management highlighted a shift towards agglomerated coffee in consumer packs, which offers higher margins compared to bulk spray-dried coffee, contributing positively to the bottom line.

Strategic Capacity Expansion and Product Diversification

Vintage Coffee & Beverages is not resting on its laurels; it is actively pursuing ambitious expansion plans to fuel future growth. A brownfield project to add 4,500 metric tons to its instant coffee capacity is underway, expected to be completed by March 2026. This expansion will increase the company's total instant coffee production capacity to 11,000 metric tons. Management expressed high confidence in quickly achieving 70-80% utilization of this new capacity, citing strong demand from existing customers and the introduction of new brands. This expansion is anticipated to improve EBITDA levels by distributing fixed costs more efficiently.

Further demonstrating its strategic foresight, the company is venturing into the freeze-dried coffee segment with a new greenfield plant. This facility, with an installed capacity of 5,000 metric tons, is projected to be commissioned by March 2027 (or Q1 FY28). The freeze-dried coffee market is growing at an impressive 10-12% year-on-year, and margins in this segment are significantly higher, estimated to be 30-40% above agglomerated/spray-dried coffee, with an EBITDA level of 22-25%. This move is expected to be a substantial driver of future profitability and market share.

Operational Efficiency and Market Penetration

To support its growth ambitions, Vintage Coffee & Beverages has also invested in enhancing its operational capabilities. A fully automated packaging line commenced commercial production on October 31, 2024, ahead of its planned January 2025 timeline. This initiative is crucial for boosting consumer pack exports by 25%, leading to higher realizations and strengthening the company's presence in lucrative markets such as the Middle East, Europe, Russia, and West Africa. This focus on consumer packs signifies a strategic shift towards higher-value offerings and direct market engagement.

In a notable move to connect directly with consumers, the company opened its first Premium Café Lounge in Navi Mumbai on September 14, 2024. This initiative marks a strategic pivot from a purely business-to-business (B2B) model to include direct-to-consumer (D2C) engagement, allowing Vintage Coffee & Beverages to tap into India's burgeoning coffee culture and build brand loyalty firsthand. The lounge offers a space for coffee lovers and business professionals to experience plantation-fresh, expertly blended brews.

Financial Summary

Outlook and Sustainability

The management's guidance indicates a target of achieving approximately 20,000 metric tons of production facilities within the next 3 to 4 years, with an estimated revenue potential of around ₹2,000 crore, though this is subject to product mix variations. The company also anticipates stronger sales volumes and turnover in Q3 and Q4 FY26, driven by confirmed orders and seasonal demand.

Vintage Coffee & Beverages is also deeply committed to sustainability and corporate social responsibility (CSR). Its 'Go-Green' initiatives include operating a large ETP plant with zero liquid discharge, implementing rainwater harvesting, using LPG gas in roasters for clean burning, and utilizing spent coffee and rice husk as biofuels. These efforts not only contribute to environmental protection but also enhance operational efficiency and reduce costs. The company's consistent performance, strategic expansions, and commitment to sustainability position it for continued growth and value creation in the dynamic global coffee market.