Up 30% in 2 sessions! Analysts lift target price on this small-cap after strong Q4 show. Time to buy?

Stocks to buy: CCL Products (India) share price has rallied 30% over the last two sessions to hit a 4-month high of ₹772 apiece, driven by the company's stellar March quarter (Q4FY25) performance, which came in above Street estimates.

The strong results sparked a surge in demand for the company’s shares on Dalal Street, even as the broader Indian stock market remained volatile amid heightened geopolitical tensions. The impressive Q4 performance also prompted several brokerages to revise CCL Products' share target prices upward, as they believe the company is well-positioned for double-digit volume growth.

This optimism is backed by the ramp-up in Vietnam operations, a rising share of specialty coffee (now 5% of sales), and the company’s cost-efficient business model.

Analysts lift CCL Products' target price higher

Domestic brokerage Axis Securities highlighted the company’s consistent performance despite fluctuations in global coffee prices. It noted that, following supply chain disruptions, many global coffee companies are seeking to de-risk their sourcing by partnering with manufacturers operating in multiple geographies. In this context, CCL Products has emerged as a preferred choice.

Axis pointed to CCL's facilities in both Vietnam and India—unlike Brazilian players that operate solely in their home market—which has helped the company expand its international footprint, gain market share, and access new business opportunities.

The company is also doubling its capacity across Vietnam and India, with a particular focus on value-added products such as freeze-dried coffee (FDC) and small packs in Vietnam. In the domestic market, the brokerage noted, CCL is aggressively scaling up its business, led by its branded segment.

Additionally, CCL Products is looking to invest further in the UK and US markets, aiming for a 15% share of the global market in the coming years.

Considering the long-term growth outlook, the brokerage has increased its FY26/27 PAT estimates by 14% and 13%, respectively, and maintains its ‘BUY’ recommendation on the stock, revising the target price higher to ₹800 per share.

Likewise, LKP Securities also raised its target price on the stock to ₹844 from ₹780 apiece while retaining its 'BUY' call. Systematix Institutional Equities has also revised its target price slightly higher to ₹720 from ₹710 earlier, maintaining a 'hold' rating. However, the stock is trading well above the brokerage's target price.

Q4FY25 earnings snapshot

CCL Products’ consolidated revenue for Q4FY25 stood at ₹836 crore, registering a 15% YoY growth. Despite the volatility in coffee prices, gross margins improved by 133 bps to 44.4%. EBITDA increased to ₹163 crore, up 38.2% YoY, while EBITDA margins improved by 328 basis points YoY to 19.5%. The company's profit after tax stood at ₹102 crore, up 57% YoY.

The management further reiterated that coffee price volatility persists, impacting contract lengths, though recent stability offers some relief ahead of the Brazil harvest.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.