GICS Industry: Food Products l Sub Industry: Packaged Foods & Meats l Website: www.cclproducts.

com

CCL Products (India) Ltd

Key Stock Indicators
NSE Ticker: Bloomberg Ticker: Face value / Share: Div. Yield (%): CCL CCLP:IN 10.0 0.6 CMP (as on 05 May 2011 Rs/Share): 52-week range up to 05 May 2011 (Rs) (H/L): Market Cap as on 05 May 2011 (Rs Mn): Enterprise Value as on 05 May 2011 (Rs Mn): Div. Yield (%): 0.0 241.2 380.55/157.65 3,208 5,512 Shares outstanding (mn): Free Float (%): Average daily volumes (12 months): Beta (2 year): 13.3 69.7 46,407 1.1

CCL Products (India) Limited (CCLPIL) was incorporated in 1961. The company is promoted by Mr. Challa Rajendra Prasad. The company is engaged in the processing of coffee and its plant is located in Andhra Pradesh. It manufactures instant and soluble spray dried coffee, agglomerated and granulated coffee, as well as freeze dried coffee and chicory mix.

Key Financial Indicators

Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m.: Not meaningful

KEY HIGHLIGHTS
Plans to launch its own coffee brand in FY11 CCLPIL plans to launch its own brand of coffee in India in FY11. The company plans to initially sell the product in south India, where coffee demand is highest in the country. Depending on the demand during the test launch, the company will launch the product in four states Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. The company is equipped with a 14,000 tonnes per annum (TPA) capacity. CCLPIL has already established a presence in the international markets in the traditional spray dried instant coffee segment. Setting up plants in Switzerland, Vietnam CCLPIL is setting up instant coffee processing plants in Switzerland and Vietnam. The Switzerland factory would help reduce global delivery time. The Vietnam plant, coming up in the Central Highland province, is under construction. The plant would cater to the Vietnamese demand as well as the export market; it is likely to start commercial operations by FY12. The company plans an initial investment of US$20 mn for the Vietnam plant.

Mar-08 4,124.2 13.9 355.3 8.6 1.3 26.7 5.2 1.1 12.3 22.6 7.0

Mar-09 4,670.8 11.9 174.1 3.7 1.3 13.1 5.1 0.5 10.2 10.0 5.7

Mar-10 4,385.4 14.2 282.8 6.4 1.2 21.3 11.3 1.6 11.2 14.8 8.8

Shareholding (As on March 31, 2011)

Others 54%

KEY RISKS
Volatility in the prices of green coffee, etc Exposed to currency fluctuations as exports contributed ~62% to FY10 revenue Changes in tastes and preferences of consumers
DII 10%

Stock Performances vis--vis market

Returns (%) YTD CCL NIFTY
Note: 1) YTD returns are since Apr 01, 2010 to May 05, 2011. 2) 1-m, 3-m and 12-m returns are up to May 05, 2011.

1-m 5 -8

3-m 11 1

12-m 26 7

FII 6%

Promoter 30%

3 3

Indexed price chart

(index) 250 200 150 100 50 0 Nov-10 Dec-10 Aug-10 Sep-10 Feb-11 May-10 Mar-11 Apr-11
NIFTY

('000) 1200 1000 800 600 400 200 0 Jun-10 Oct-10 Jul-10 Jan-11
CCL

Volumes (RHS)

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CCL Products (India) Ltd

BACKGROUND
CCLPIL was incorporated in 1961 as The Sahayak Finance & Investment Corp Ltd. The company's business was related to hire purchase financing activities. In 1994, it diversified to coffee, instant coffee and related products and was renamed Continental Coffee Ltd. Currently, the company manufactures soluble instant spray dried coffee powder, spray dried agglomerated and granulated coffee, freeze dried coffee, as well as freeze concentrated liquid coffee. Its products are available in various packs, such as glass jars, tins, sachets and pouches. The companys soluble instant coffee manufacturing plant is located at Duggirala Mandal in Guntur district of Andhra Pradesh, and has a capacity of 14,000 TPA. The company exports soluble coffee products to more than 58 countries around the globe. Exports contributed ~62% to FY10 revenue.

COMPETITIVE POSITION
Peer Comparison

CCL Products Apeejay Tea Ltd. India Ltd. Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful

Asian Tea & Exports Ltd. Mar-10 1,310.2 4.9 12.3 0.9 1.4 1.7 14.7 1.1 7.4 5.8 8.1

Tata Coffee Ltd Mar-10 12,932.8 20.9 737.5 5.7 n.m. 39.5 17.2 n.m. 54.9 7.4

Mar-10 4,385.4 14.2 282.8 6.4 1.2 21.3 11.3 1.6 11.2 14.8 8.8

Mar-10 1,702.2 15.4 161.7 9.5 1.1 -11.0 n.m. 0.9 17.2 23.2 3.0

FINANCIAL PROFILE
Top line decreases, but EBITDA margin and PAT improve Top line decreased ~6% year-on-year in FY10 on a consolidated basis and stood at Rs 4.38 bn, vis--vis Rs 4.67 bn in FY09. Decrease was largely on account of lower sales in domestic market. Export sales rose ~14% in FY10. EBITDA margin increased 230 basis points to 14.2% in FY10. Increase in margin despite a drop in revenue was primarily because of lower raw material cost, lower manufacturing, administration and selling expenses as a percentage of sales. PAT stood at Rs 282.8 mn in FY10 vis--vis Rs 174.1 mn in FY09. This was possible because of better operating profit and lower interest charges (repayment of debts) and forex gains.

Key Financial Indicators Units Revenue PAT PAT ma rgins EBITDA growth PAT growth Gea ring RoCE RoE Rs mi ll ion Rs mi ll ion Per cent Per cent Per cent Times Per cent Per cent EBITDA ma rgins Per cent

Mar-08
4,124.2 13.9 355.3 8.6 5.8 5.7 -6.6 1.3 12.3 22.6

Mar-09
4,670.8 11.9 174.1 3.7 13.3 -2.8 -51.0 1.3 10.2 10.0

Mar-10
4,385.4 14.2 282.8 6.4 -6.1 11.9 62.5 1.2 11.2 14.8

Revenue growth Per cent

INDUSTRY PROFILE
Coffee The global market for coffee is estimated at 7,423 million kg in 2009-10. India is the sixth largest producer in the world with a share of 3.9 per cent. Around 75 per cent of India coffee production is exported and the balance is consumed domestically. Coffee production in the country is concentrated in the three southern states of Karnataka, Tamil Nadu and Kerala constituting over 95 per cent of the total coffee production. Indian coffee production for the period 2009-10 is estimated at 308 million kg, a 6 per cent increase y-o-y. Domestic auction prices of coffee are largely determined by the global trends, which in turn are dependent on supplies from Brazil (it being the worlds largest coffee producer). Although on a y-o-y basis international bean prices have declined 7 per cent (2009-10 over 2008-09), they have grown at a CAGR of 14 per cent since 2004.

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CCL Products (India) Ltd

ANNUAL RESULTS

Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No. of shares (Mn No.) Earnings per share (EPS) Cash flow (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flow from operating activities Capital Expenditure Investments and others

Mar-08 4,124.0 4,124.2 573.0 13.9 120.8 94.9 10.6 386.4 355.3 8.6 13.3 26.7

Mar-09 4,657.3 4,670.8 557.1 11.9 143.6 205.9 10.3 219.8 174.1 3.7 13.3 13.1

Mar-10 4,373.5 4,385.4 623.6 14.2 143.0 124.7 8.9 375.2 282.8 6.4 13.3 21.3

Balance sheet (Rs million ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Current assets Receivables Inventories Cash Total assets Ratio

Mar-08 133.0 1,570.0 1,703.0 97.5 1,285.9 961.3 2,247.2 316.0 90.1 4,453.8 2,736.4 2,527.3 0.2 1,926.2 668.8 791.1 91.2 4,453.7

Mar-09 133.0 1,652.2 1,785.2 143.8 1,149.9 1,239.3 2,389.2 210.9 21.6 4,550.7 2,861.2 2,612.9 104.1 1,833.8 782.5 727.7 92.4 4,550.8

Mar-10 133.0 1,907.6 2,040.6 175.8 931.1 1,434.8 2,365.8 223.8 48.4 4,854.4 2,873.4 2,913.3 1.6 1,939.6 723.4 858.5 61.6 4,854.5

Mar-08 367.9 -5.7 120.8 -139.4 343.6 -247.0 0.0

Mar-09 217.9 0.7 143.6 -79.9 282.3 -229.2 -103.9

Mar-10 364.7 -60.5 143.0 -96.9 350.3 -443.4 102.6

Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days)

Mar-08 5.8 5.7 -6.6 13.9 1.5 8.6 18.9 5.0 128.0 22.6 12.3 1.3 6.0 3.9 1.9 1.4 170

Mar-09 13.3 -2.8 -51.0 11.9 -0.3 3.7 7.9 1.0 134.2 10.0 10.2 1.3 2.7 4.3 1.7 1.2 143

Mar-10 -6.1 11.9 62.5 14.2 16.1 6.4 7.2 1.5 153.4 14.8 11.2 1.2 5.0 3.8 1.5 1.1 161

Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

-247.0 0.0 -19.6 -78.3 9.0

-333.1 0.0 142.0 -16.0 -74.0

-340.8 0.0 -23.4 -23.7 6.7

Cash flow from financing activities Change in cash position Opening cash Closing cash
n.m : Not meaningful;

-88.9 7.7 83.7 91.2

52.0 1.2 91.2 92.4

-40.4 -30.9 92.4 61.6

QUARTERLY RESULTS
Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a ti on PBT PAT Dec-10 3 1,138.5 224.0 42.0 41.1 141.0 120.6 100.0 19.7 3.7 3.6 12.4 10.6 % of Rev Dec-09 % of Rev 3 1,478.6 218.2 44.7 35.8 137.7 137.7 100.0 14.8 3.0 2.4 9.3 9.3 Sep-10 3 1,292.5 172.3 37.3 36.8 98.1 75.3 100.0 13.3 2.9 2.8 7.6 5.8 % of Rev Dec-10 9 2,650.9 520.6 107.1 114.3 299.2 241.0 100.0 19.6 4.0 4.3 11.3 9.1 % of Rev Dec-09 9 3,195.5 491.9 113.7 107.8 270.3 270.3 100.0 15.4 3.6 3.4 8.5 8.5 % of Rev

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CCL Products (India) Ltd

FOCUS CHARTS & TABLES
Rs mn 1,600 1,400 1,200 1,000 800 600 400 200 0 Jun-08 Mar-08

Quarterly sales & y-o-y growth

Per cent 80 60 40 20 0 -20 -40 -60

Rs mn 250 200 150 100 50 0

Quarterly PAT & y-o-y growth

Per cent 250 200 150 100 50 0 -50 -100 -150 Dec-10 Dec-10 Sep-10 Sep-10 Jun-10
NP M

Dec-08

Dec-09

Mar-09

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-09

Jun-10

Dec-08

Dec-09

Sep-08

Sep-09

Jun-08

Jun-09

Mar-08

Mar-09

Sales

Sales gro wth y-o -y (RHS)

Net P rofit

Net pro fit gro wth y-o -y (RHS)

Rs/share 16 14 12 10 8 6 4 2 0 Dec-08

EPS

Per cent 25 20 15 10 5 0

Movement in operating and net margins

Dec-08

Mar-08

Mar-09

Dec-09

Sep-08

Sep-09

Jun-08

Jun-09

Mar-10

Dec-09

Mar-08

Mar-09

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-08

Jun-09

Jun-10

OP M

Shareholding Pattern (Per cent) Jun 2010 Sep 2010 Promoter 30.3 30.3 FII 6.1 6.8 DII 9.5 9.3 Others 54.1 53.6

Dec 2010 30.3 6.5 9.8 53.4

Mar 2011 30.3 6.4 9.8 53.5

Board of Directors Director Name Rajendra Prasad Challa (Mr.) Srishant Challa (Mr.) Jonathan T. Feuer (Mr.) I.J. Rao (Mr.) Zafar Saifullah (Mr.) Vipin Kumar Singal (Mr.) Viplav Sharma (Mr.)

Designation Chairman & Managing Director Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director

Additional Disclosure This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT). Disclaimer This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please contact 'Client Servicing' at +91-22-33423561, or via e-mail: clientservicing@crisil.com.

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Mar-10

Jun-10