CCL Products Q2 Results: Revenue Soars 52% to a Record ₹1,128 Crores

Introduction: A Record-Breaking Quarter

CCL Products (India) Ltd. has delivered a stellar performance in the second quarter, posting its highest-ever quarterly revenue. The company's consolidated turnover for Q2 FY26 surged by an impressive 52.7% year-on-year to reach ₹1,128.21 crores. This robust growth was supported by a significant increase in sales volume and improved operational efficiencies, signaling strong market demand and effective execution of its business strategy. The strong quarterly results have reinforced investor confidence, with the company's stock trading near its 52-week high.

Deep Dive into Financial Performance

The financial results for the quarter ending September 2025 highlight broad-based growth. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q2 stood at ₹198.61 crores, a 44.3% increase compared to the same period last year. Net profit also saw a healthy rise, growing by 36.4% year-on-year to ₹100.86 crores. For the first half of the fiscal year (H1), the company's turnover reached ₹2,186.25 crores, up 44.5%, while H1 net profit grew by 19.2% to ₹173.31 crores. While the operating margin for Q2 improved sequentially to 17.50% from 15.06% in Q1, it remains slightly below the levels of the previous year, indicating a strategic focus on volume growth amidst a volatile commodity price environment.

Segmental Strength: B2C and B2B Dynamics

CCL Products' domestic branded business has been a significant growth driver. The segment recorded sales of ₹110 crores in Q2 and ₹210 crores for H1. The company has successfully captured a double-digit market share in e-commerce and modern trade channels across India, reflecting strong brand acceptance. The B2C segment operates on an EBITDA margin of 5-6%, with profits being reinvested to fuel further growth. In contrast, the B2B segment commands higher net margins due to lower marketing expenditures. The company's EBITDA per kilogram improved to the ₹130-132 range, attributed to a better product mix, operational efficiencies, and a higher contribution from freeze-dried coffee.

Operational Efficiency and Capacity Utilization

The company's strong performance is underpinned by solid operational metrics. Volume growth in Q2 exceeded 20%, with a blended growth of approximately 15% for the first half of the year. CCL Products operates with a total manufacturing capacity of around 77,000 metric tons, split between its facilities in India (40,000 MT) and Vietnam (~37,000 MT). The blended capacity utilization currently stands at a healthy 65-70%, providing sufficient headroom for future growth. Management has attributed improvements in working capital and debt reduction to enhanced operational efficiencies, including better inventory management and renegotiated contracts.

Financial Health: A Strengthening Balance Sheet

An analysis of CCL Products' balance sheet reveals a consistent strengthening of its financial position. The company's reserves have grown steadily from ₹765.81 crores in March 2020 to ₹1,087.57 crores in March 2024. During the same period, total assets increased from ₹1,347.93 crores to ₹2,040.72 crores. A key highlight is the company's effective debt management. Borrowings have seen a significant reduction, and as of September 2025, net debt stood at ₹1,580 crores. Management has provided clear guidance to reduce this figure to ₹1,350 crores by December 2025 and further down to ₹1,200 crores by March 2026.

Stock Performance and Valuation

CCL Products has been a significant wealth creator for its investors. The stock has delivered a return of 39.37% over the past year and an exceptional 299.08% over the last five years, substantially outperforming the Sensex. Following the announcement of its Q2 results, the stock surged to trade near its 52-week high of ₹1,002.00. However, this strong performance has led to a premium valuation. The stock trades at a trailing Price-to-Earnings (P/E) ratio of approximately 38x, which is considerably higher than the FMCG sector average of 23x. This premium reflects the market's high expectations for sustained growth and execution.

Future Outlook and Management Guidance

The management remains optimistic about the company's future prospects, maintaining its guidance for 10-20% volume growth and 15-20% EBITDA growth for the fiscal year. The long-term vision is to transition CCL Products into a broader FMCG company, leveraging its expanding distribution network, which currently reaches about 140,000 outlets with a target to double it in three years. The company is also making strategic investments in green energy through its stake in Mukkonda Renewables. The key factors to monitor ahead are the stabilization of margins, improvements in capacity utilization, and the successful execution of its deleveraging plan.

Conclusion

CCL Products has delivered a powerful performance in Q2 FY26, setting new records in revenue and demonstrating robust growth across key financial metrics. The company's strategic focus on expanding its branded business, improving operational efficiencies, and prudent debt management positions it well for the future. While the premium valuation calls for continued flawless execution, the clear growth trajectory and management's confident outlook provide a compelling narrative for investors.