Choice Institutional Equities has issued a buy rating on CCL Products India with a target price of ₹1,365, representing a 21% upside potential from current levels. According to the research report dated May 09, 2026, the brokerage remains bullish on the stock following the company's Q4FY26 performance that came in ahead of expectations. The recommendation is based on the company's ongoing improvement in product mix, driven by higher contribution from premium Freeze Dried Coffee (FDC) and increasing salience of small-pack consumer offerings.
Q4FY26 revenue came in ahead of expectations, though margins were impacted due to elevated coffee prices and a higher share of relatively low margin coffee contracts. As reported by Choice Institutional Equities, the key operating metric — EBITDA/kg — remained strong at ₹138/kg (FY26 average: ₹135/kg), reflecting the company's ongoing improvement in product mix. This performance demonstrates the company's ability to maintain profitability despite challenging market conditions in the coffee segment.
Following the sharp increase in coffee prices during CY25, recent stabilisation (down ~17% YTD) is positive, enabling longer duration contracts, lower working capital needs and better demand visibility. According to the brokerage's analysis, this recent price stabilisation is particularly beneficial for the company's operational efficiency and future contract negotiations. The company has marginally increased its FY28 estimates to account for better capacity utilisation, supporting the positive outlook.
Choice Institutional Equities values the company using the DCF approach, resulting in the target price of ₹1,365. The brokerage has marginally increased its FY28 estimates to account for better capacity utilisation, indicating confidence in the company's operational improvements and market positioning. The valuation methodology reflects the company's strong operational metrics and improving business fundamentals in the coffee processing sector.
