CCL — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

Factory: Duggirala, Guntur Disi. - 522330, A.P., India.

February 14, 2019 · \I’\NIRMAL BANG

\I’\NIRMAL BANG

uuuuuuu . ((((( · a relationslup beyond bvnkmg

a relationslup beyond bvnkmg

MR. MOHIT KHANNA · - NIRMAL BANG EQUITIES

NIRMAL BANG EQUITIES

PRIVATE LIMITED · MR. CHALLA SRISHANT— MANAGING DIRECTOR

MR. CHALLA SRISHANT— MANAGING DIRECTOR -

CCL PRODUCTS (INDIA) LIMITED · Management

MR. KVLN SARMA

— CHIEF OPERATIONAL · OFFICER

OFFICER - CCL PRODUCTS (INDIA) LIMITED MR. PRAVEEN JAIPURIAR

— CHIEF EXECUTIVE · OFFICER

OFFICER — CONTINENTAL COFFEE PVT LTD MR. V.

LAKSHMI NARAYANA

— CHIEF FINANCIAL · OFFICER

OFFICER — CCL PRODUCTS (INDIA) LIMITED MR. P.

RAO

— CONSULTANT COMPANY · SECRETARY

SECRETARY — CCL PRODUCTS (INDIA) LIMITED MS. SRIDEVI DASARI

CCL PRODUCTS (INDIA) LIMITED · Management

é PRODIIOYS

Moderelor

Mohil Khenrle.

Chane Srishanl

Moderelor.

Nihil Perekh.

CCL PRODUCTS (INDIA) LIMITED · Management

(India) Limirzd szmary I4, 2019 Ladies and genllemen, good day and welcome lo lhe CCL Pmduds India Limiled Q3

(India) Limirzd szmary I4, 2019 Yes fissi 1hing fir5| one fundamamal 1hing 1ha1 yon need 1o undarsmid abon11he camvany is we “Eva 1ook a1 bnsinesson quanarmfluanar basis, ifyuu 1ook a|uur businassjufl 1o giye an Examvla 1wo yEars ago on Q3 was basi varfun'ning onanes, 1as1 yaar on Q4 was 1he bes1 varfcrrrning onanes, 1his yaar Q1 and Q2 i|salf we have shown 40% gmw|h so we nonnaiiy 1ook a1 ii on yaarrmryaar basis, we do our Emira planning for 1he yaar and bndgeiing eyesyihing based on 1he ardar vusificm 1ha1 is |haa wi|h ns so because we have Exacmad 1heconnac1s in Q1 and Q2,1heses1onheconnac1s ara a1so being Exacmad in 1his Q3 And Sir ifyuu can Shara some 1hongh1s on 1he Expansion plan, |hara is SEZ piani, which is coming on sneam in 1he llEx| few monihs so is 1ha1 on1ine and wha1 is 1he kind ufuufluuk 1ha1 we ara 1ike1y 1o see for 1he coming yaar 1ha1 is financial yaar 2019720207 The SEZ niani 1he ins1a11a1ion work eyesyihing has been comnieiad and we am in 1he vmcass of doing 1he nacasiary niais oyes 1hese, we ara 1aking a niai vmdudiun oyes |hara now We wane schedniad 1o come in1o carnrnarcial vmducfiun fmrn April 1, 2019 and we am 100% on hack for 1ha1, cavachy u|iliza|icm 1he gnidance 1ha1 we have giyen is avgmximamly around 50% in 1he fim yaar and we ara oniie confideni 1ha1 we win be ab1e 1o achieve1ha1 And Sir if yon can a1so ”now some 1igh1 on 1he Viamarn Expansion and 1he apEraAiuns 1here7 Yes Vialuam 1his yaar wi11 be, we ara apEtaAing c1oses a1 abon1 80% cavachy u|iliza|iun and by llEx| yaar we are planning and going in for some addiiionai Expansion by llEx| financia1 yaar We wi11 enhance1he cavachy for anmhar avgmximamly 3500 1onnes Snse Tha1 was vary halvful Sir Thank yon so much Thank you The nex1 ones1ion is from 1he1ine of Lokesh Manik from Valium Cavi|al Advisors Please go ahead Thank yon for 1he apvammhy Sir my onasiion is mainiy on 1he biand so yon haye meniioned in your vraviuus cunfaranca ca11 1ha1 1he USP of 1he company 1ies in 1he biands cseaied fmrn 1he 1(ch affans oyes 1he yEars and decades, so 1 Ju5| wanied 1o nndessiand how easy or difficuh wonid i1 be for acumvamm 1o ravasa Engineer on b1ends, a pmcass, which iscomrnon in o1hercommodi1y businass’7 é PRomIcrs Chalk!

Srishanl: Lokesh Munik.

Chalk!

Srishanl: Lokesh Munik.

Chalk!

Srishanl: Lokesh Munik.

(India) Limirzd szmary I4, 2019 0na liring you naad lo undarsland is lira majcir companias loday lira biggar brands liral iraya manufachfling capabililias, liray may iraya lira lacirnology and knowirow lo rayarsa anginaar lira blands liral wa ara doing, bul wa would normally nol do liral bacausa lirair businass modal is lo sall ona singla brandad producl Our USP is wa suppliad lo brands across lira world and wa coma up wilir unioua blands for aacir of our cuslomars Now for anolirar priyala labal company lo do lirisis nol yary aasy bacausa you iraya lo inyasl subslanlially in R&D, yon naad lo inyasl in lira rigirl aouipmanl and lira rigirl laam and Evarimau wilir mullipla raw malarials irom mullipla origins, noliring is impossibla if yon iraya lira nacassary rasourcas and lira lacirnical knowirow H is liraoralically possibla lo raplicala Exacfly wiral wa ara doing, bul il is nol yary aasy ailirar Wa iraya grown in an organic mannaroyar lira yaars so wiranayarour cuslomars iraya askad us lo dayalop blands wa iraya inyaslad in liral R&D and wa iraya commarcializad liran and lirara liral is irow wa iraya baan abla lo grow and bacausa wa iraya baan abla lo craala unioua blands for cnslomars and bacausa wa work in a lransparanl basis wa iraya baan abla lo ralain our cuslomars also for lira longlima and wa iraya also baan abla lo grow our cuslomar basa accordingly Okay and do wa possass soma iradga in lanns oi lira procass liral wa iollow wirila wa ara craaling lirasa blands, ara liray diiiaranlialad on liraprocassas or liracounlry oiorigin oiraw malarials or would il ba a mix of bolm H is aclually a combinalion oi liris plus a coupla oiolirars lirings as wall slarling wilir lira origin ufraw malarial basad on lira soil condilions, lira laslaprofila oi lira raw malarial i|salf yarias, aflar you gal lira raw malarial basad on lira roasling profila, lira roasl profila will dalannina lira oulpul oualily liran lira Ex|rac|iun procass, aroma racoyary lirara ara mullipla olirar produclion paramalars liral wa iraya lo kaap in mind wiran wa ara producing lira producl Nolraally an aasy lask for acompalilor Exacfly and also ona oi lira biggasl slranglir liral wa iraya is, wa iraya lira abilily lo imporl raw malarials fmrn anywirara alsa in lira world if you look al counlrias lika Brazil liray ara lira largasl manufacmrars oi lira inslanl cuffaa in lira world, bul liray ara obligalad lo usa only domaslically grown graan coiiaa, wiricir maans liral is kind of producl liral liray can produca gals raslriclad a lol Wa do nol iraya any sucir raslriclions liral also anabla us lo sourca ciraapar raw malarials irom olirar origins and craala blands for cuslomars Okay Sir anolirar ouaslion is a bil macro, so as you also manlionad liral lira consumplion oi inslanl coffaa in lira dayalopad aconomias liral lira growlir is nol quila wall and wa hava also é PRODIIOYS

Challa Srisham

Lokesh Manik.

Moderator.

Nishil Shah.

CCL PRODUCTS (INDIA) LIMITED · Management

(India) Limirzd szmary I4, 2019 focusing on developing economies for lhe same so would il be fair lo assume lhal lhe demand would be more for Robusla as compared lo Arabica given lhe price diffaranca” Yes lhere are lwo vans lha you have asked The developing counlries yes lhere is a decline, bul lhere is a decline in consumvficm because of lhe decline in vapulafiun, ii is nol because of lhe reduclion in coffee cansumvficm var parse“ ii is only because of lhe decline in populaion Davaluving counlries wilh lhe increase in younger vapulaficm lhal is lhal lhe coffee consumvficm is also increasing lhal is also one of lhe reasons why we are focusing more on lhe developing counlries asofnow As far as cansumvficm of whal |ypE ofoualily is concerned lhis compleely changes from region lo region, bul on a broad leyel ifyou look al our vanfuliu I say aboul 85% lo 90% of whal we do is Robusla modud nredominanlly Robusla vmduds because lhere is a cosl adyanlage oyer here Again if you camvara lo Brazil, which is lhe main cumvamur and Arabica, which ilself is much more axvansiva Righl Thai is all from my side Sir Iwill come back in lhe oueue Thank you so much Thank you The nexl oueslion is from lhe line of Nishil shah from Edelweiss Please go ahead Good aflernoon Sir Thank you for lhe uvvm|uni|y Ihad a oueslion regarding lhe macro vicmra so in 2018|hare was a slow down in lhe coffee Expafls, bul in lhe firs| lwo hours we were able lo grow by ouilea bil so whal is lhe reasons for lhe same and going forward whal is your oullookv 5o aclually erviuus year ilselfI had menlioned lhal earlier or lwo years ago we were nol really focusing loo much on lhe yolume growlh, bul lasl year onwards we changed our snalegies for rnuhivla reasons we decided lo focus on lhe yolume growlh so lhal is lhe reason lasl year, lhis year also lhere was a subslanlial yolume lhis financial year and lhere is a yolume growlh and nexl year also lhere will be a good yolume growlh because of lhe new cavaci li es lha we are adding Okay and anolheroueslion was regarding Vielnam so for Vielnam in lhis ouarler on Yov basis lhe revenue has gone down ouile a bil so whal could be lhe reason for lhe Sal-11E” If you look al il on a nine monlh basis, lhere is a subslanlial increase nol a small increase more lhan 40% increase in am nol mislaken Jusl for lheouarler for Q37 é PRODIIOYS

Challa Srisham

Nishil Shah.

Moderator.

Suresh Kamauz

Lahhmi Narayaua.

CCL PRODUCTS (INDIA) LIMITED · Management

(India) Limirzd szmary I4, 2019 As I menlioned al lhe beginning ilself looking al il ou a quanarrmfluanar basis would nol giye you a clear piclure because specifically lhere is a cuslomer who would have laken coffee laslyear in Q3 and Q4 lhis lime he may have laken il in Q] and Q2 Okay so basically lhe oullook for lhe llEx| year remains lhe same and we would conlinue lo grow as guidancev Exacfly lhal is il Okay lhanks a lol Thai is il from my side Thank you The nexl oueslion is from lhe line of Suresh KamaIe who is an Individual In yeslor Plaasa go ahead My ouesliou is your branded coffee business is a lhreaI lo a priyale leyel markel share of CCU The branded coffee business righl now is yery small and we are focusing ouly ou lheIndian markel In India we have lwo yerlicals, one is priyale label and lhe secoud is branded business, lhe priyale label we are supplying lo lhe supennarkels le il be Ralianca, Spencer, Big Bazaar, all lhese arepriyale label cuslomers We sell our brand lo lhe samesupermarkel Ju5| lhe way our compelilors also sell lo lhe same supennarkels so lhere is no confiicl oyer here We are now supplying lo any of lhe olher big brands, so we are nol compeling wilh anybody The blend whal priyale labels use and whal branded under blends comes in lhe differenl |Ean’l'7 We have lo mainlain lhe difference so lhal cusmrnErs also can easily make us lhal ii is significamly differenl, so many blends are giying lwo differenl blends is nor a big deal for us Okay so my llEx| oueslion whal would be your nel assel lumoyer ralio for Vielnam and lhis plan separalelyv Thal I lhink our CFO can answer Yes genllemen ii is l.l é Pnonvcrs Suresh Kummz Chalk; Srishanl:

Suresh Kamale

Moderator.

Binoy Juniwnlu.

Chalk; Srishanl: Pruyeen Juipunisr.

Binoy Juniwnlu.

Pruyeen Juipuniun.

Binoy Juniwnlu.

Pruyeen Juipunisr.

Binoy Juniwnlu.

CCL PRODUCTS (INDIA) LIMITED · Management

(India) Limirzd szmary I4, 2019 My final oueslion is in look al nine monlh lo nine monlh mplina gsowlh, ii is almosl fla| so do you see lhe same fla| eyen in Q4 ifI lalk FY by FY” Yes because lhe gseen coffee vricas have come down fmrn lasl yaar lo lhis yaar and 70% of our vmdud cosl is raw malesial, so we nonnall y do nol focus loo much on lhe |umuvar only because of lhis season, one yaar lhe gseen coffee vricas could eyen double and one yaar il could come down lhal is lhe demand and supply changEs maally on a minule lo minule basis grEEn coffee vricas so whal is meta impunam as an indicawr is a bouomline gmw|h Thanks Thank you The “en dueslion is from lhe line ofBinoy Jariwala from Sunidhi Sacurifia Plaasa go ahead Thank you for lhe apvununhy Iwould like your lhoughlson how am |hacun|inal|al coffee ra|ail sales doing bolh B2B as well asB2c side ofil and am you on nack lo meaing aboul Rs 100 cioresofsalas in |hisyaar7 I will Ju5| pass on lhis oueslion lo Mr Pravaan Jaipuriar, CEO who is in charga of lhe domeslic markel Branded business and lhe bulk domeslic business bolh of lhem vu| |uga|har lhal you asked will mach a figura of anmokimalely Rs 30 (Items lhis yaar We have done erfly well in lhe branded businessyusl lo giye you an idea lhe branded mail pan of ii, lasl yaar we had done a business of around Rs 9 Cruras, which we louch a |umuvar of around Rs as Cruras lhis yEar, which is almosl four limes a “Arum/Er of lasl yaar and lhe tag of ii is including bulk suppliesnsiyale label and army suwlias so lhal has been lhe business oullook for lhis yaar Okay and whaA is lhe sales alraady done for nine monlhsv So we have alraady done Rs 55 CrarEs for lhe nine monlhs And onhis how much would be |haraail yam The mail van is avgmximamly Rs 23 Craras In half yaar we have done aboul R544) CrarEs and in lhis quana we have done anmha Rs 15 odd Crores, would we be on Irack lo make lhis even Rs 80 Crores |argE| or do you lhink lhere could basama” é PRomIcrs Pruyoor.

Juipurisr.

Binoy Juriwulu.

Pruyoor.

Juipurisr.

Binoy Juriwulu.

Pruyoor.

Juipurisr.

Binoy Juriwulu.

Chalk.

Srishanl.

Binoy Juriwulu.

Chalk.

Srishanl.

(India) Limirzd szmary I4, 2019 While wa hava givan au iudicaliou olksAOCroras, il was acmally arouud Rs 37 eras |ha final figuras duriug |ha half yaar aud wa ara many confidam bacausa Jauuary ilsell wa hava dana a businass of arouud Rs 7 Croras so we ara alraady uow al Rs 52 Croras lo Rs 53 eras so uaxl lwo moull.s aud |hara is au army mdar as wall so all of ”mm vu| |uga|har wa will defiuilaly do Rs XOCroras Sura aud lasl |irna you mauliouod ll.al wa hava roceiyad au Enquiry fmrn DMan for |ha vriva|a laaal ausiuoss is |hara auy lracliou ou ll.al, hava waslarlod supplying ll.aml WE slill hava uol closod |ha daal for |hair vriva|a labal businass Okay is il Exvadad lo clusa iu ll.is ouarlar, nax|quar|ar auy ll.ougl.lsou |haA’7 WE ara ac|ivaly pursuing il a lol davands ou ”la kind of ralas, margius aud a lol of ll.iugs will go iulo il so while wa ara ac|ivaly pursuing il wa ara kaaving our fingars crossod il may havval, il may uol havvan, bu| wa ara canfidam ll.al il will go ll.rougl.

Sura Nan quasficm is for Srislaul, Srisham I would like your ll.ougl.ls ou Nasfla l.as acquirod |ha oul of llama businass of S|arbucks globally aud will. ll.isdo wa saa auy imvad on our businass will. ll.am7 H is acmally a good ll.iug for us also becausa rnclra cuffaa cansumvfiun will |aka placa across |ha world, oua of |ha ll.iugs ll.al wa hava lo ackuowlodga claarly is ll.al Nasfla l.as baa" |ha markal laadar for cuffaa globally for sayaral yaars fmrn |ha cuffaa loclmology ouwards ayarylliug ll.ay ara |ha markal laadas for sayaral yEars aud by doiug wha|avar ll.ay ara doiug |heir ubjad is also lo incraasa cuffaa Salas becausa ll.ay kaav Exnamaly l.igl. margius Evan S|arbucks for ll.al manar, S|arbucks kaevs may as mucl. much highar margius aud Evan Nasfla so if ll.ay kaav expanding |ha markal |hal il is acmally vary good for campanias like us becausa wa hava a hugE araa lo play arouud wall Aud isour associaliou will.

Naslle, whora wa also associalad will.

S|arbucksuna and in our associaliou will.

Nasfla only for canal" markels or is il for all |ha markels globally” WE wara associalod will.

Nasfla lill 1997,bu|5ubsaquan|ly wa slarlod doiug rnclra oluriyala labal businass cumvfling will.

Nasfla suwlying lo Nasfla‘s compaluors so fmrn l997 ouwards ll.ara is no dirocl ralaficmshiv will. |harn aud as far as S|arbucks is coucaruod |hara is sama small businass ll.al wa am doiug will. ll.am, bu| agaiu il is ouly a small ouaulily ll.al wa do é PRODIIOYS Binoy Jariwala.

Chalk; Srishanl.

Binoy Jariwala.

Moderator.

Kanwalpreel Singh.

Chalk; Srishanl:

(India) Limirzd szmary I4, 2019 So |han DE!

Chalk; Srishanl: Kanwalpreel Singh.

Chalk; Srishanl: Kanwalpreel Singh.

Praveen Juipurirnr.

Kanwalpreel Singh.

Chalk; Srishanl:

(India) Limirzd szmary I4, 2019 So on 1he 1321; business 1e1 us say if we divide 1he business in1o priyaie 1abe1 so priyaie 1abe1, 1here is a growih, 1here is ac1ua11y 10% 1o 12% grow1h on priya1e1abe1 and on 1he bulk business 1here is a grow1h of around again 15% 1o 20% is no1 1ha1 1here is a s1ow down, 1he on1y€ac1is1ha11he branded business since we are focusing a 1o1 on 1ha1, 1ha1 has gone up four 1imes since 1as1 year In army business because i1 is a 1ender based business 1ha1 is s1agnan1 eyery year because 1hey order for fixed ouan1i1y so 1ha1 par1 onhe business is s1agnan1 for 1as1 some years We are noi coun1ing i1 as branded business Righi 1ha1wou1d no1 come under 1he con1inen1a1 brandv I1 is under con1inen1a1 brand. bu1 we are no1 coun1ing i1 under 1he branded B2C sales, bu1 wha1ever numbers Prayeen hasmen1ioned 1hough 1his is branded sale because i1 is a 1ender based sale. he is no1 including 1his as a B2C 5113 Okay righ1 so wou1d i1 be possib1e for you 1o share some son of 1arge1s, which you have for your con1inen1a1 B2C business for nexi yearv Beuer 1ime wou1d be when we end 1his ouarier because 1hings are fluid, we have s1ar1ed adyeriising 1hree mon1hs ago and we arajus| seeing, because 1hree mon1hs is a yery shor1 1ime 1o assess 1he kind of omakes 1ha1 are happening in 1he markei in an 1ike1ihood when we end March we win be ab1e 1o enyisage i1 beuer 1ha1 wha1cou1d be our 1arge1 for "an year Righi of course and 1as1 ouesiion of course B2C business is yery sma11 righ1 now and I guess fmrn whaA 1 had read in1he1as1€ew conca11s you said 1ha1 i1migh1no1 flow down 1o PAT for 1he "an 1hree 1o four years 1o bui11 i1 because 1here wi11 be a 1o1 ufrnarkafing in adyeriising ironi, bu1 ifyuu |aka 1onger |Errn yiew wou1d you be ab1e 1o share any 1hough1 ufrnargin guidance on 1ha1 compared 1o your 1321; business, which you have presen1in LungJarm definiieiy 1he margins wou1d be much, much significamly beuer 1han 1he B2B business,1his wi11 be consumer sa1es As you righ11y said 1he "an 1hree 1o four years wi11 be abou1 bui1ding 1he brand and a 1o1 of margins in fad an of i1 probab1y wi11 be reinyesied back in1o1he brand so we wi11no1ge11he adyan1ages for 1he nexi may be 1wo or 1hree years, bu1defini1e1y beyond 1ha1 poin1 1hen wha1 wi11 happen is because if 1he margins wi11 be significamly higher and wha1 wi11 happen is 1ha1 as we s1ar1bui1ding1he brand, our abi1i1y 1o ge1 more margins and beuer margins wi11 a1so improye on 1he branded business, so may é Pnonvcrs Kanwalpreel Singh.

Chane Srishanl

Kanwalpreel Singh.

Moderator.

Akhil Perekh.

Chane Srishanl.

Lakhmi Nereyuua.

Akhil Perekh

Lakshmi Narayana.

Lakhmi Nereyuua.

CCL PRODUCTS (INDIA) LIMITED · Management

(India) Limirzd szmary I4, 2019 be ihree years down ihe line we are looking a| significamly higher margins |han ihe B2B business Righi bui a| |his lime you would noi likeio give numberv Numbers is someihing because direciionally speaking yes we know |ha| i| will be significamly beuer, bui we will have lo see a couple of years |ha| how lo |hings shape up in |his marka| because we know all said and done we have a rough challenge going forward for iwo years Absoluiely okay Thank you so much Sir Thank you The nEx|quEs|icm is from lheline of Akhil Parekh from Elara Capilal Please go ahead Hi Srisham my ouesiion is on ihe Indian operaiion siandalone business, we see a decline of almosi 10% lo 11% of ihe iopline, one of ihe reasons I am assuming is because of ihe declining raw malerial prices, bui |ha| is noi geuing reflecied in our EBFTDA margin, if you look a| EBerA margins YoY basis lhey are flaL so how much lhe decline in lhe lopline is because of ihe drop in volumesv CFO is answering |his ouesiion Because of lhe drop in lhe volume in lemrsof lhe produclion and sales volume ifyou look a| ii, i| is ihe same like nine monihs of ihe previous year and |his year, ihere is no variaiion Ninemonihsommx is same asnine mon|hsuf20|9 in |Errnsufvuluma In ierms of ihe volume, in ierms of ihe value boih is a| ihe same level Bul ouarier wisaI am assuming for ihispariicular ouarier i| would have droppedrighw Yes, as wesiaed earlier, we have lo look a| ihese ihingson yearly basis cannoi be lucraiive on ouarierly basis Bul is ihere any siruciural changes overall in look a| i| ihe India‘s Exvcln volumes have declined for |his pariicular ouarier, so i| will noi someihing specific lo ihe ch phenomena Iam assuming, so was i| specific reason fordeclineinrndian Expo“ volumev é Pnonvcrs Lahhmi Namyana.

Chalk; Srishanl.

Akhil Perekh

Chalk; Srishanl.

CCL PRODUCTS (INDIA) LIMITED · Management

(India) Limirzd szmary I4, 2019 H is noi disecuyseiaied io ihe uvarall Expafl, Indian Expafls VErsusCCL Expafls because as we can see |ha| |hara ara many of ihe iimes when ihe axvuns am down and ihe CCL does well We Ju5| iook aI i| on a yaarly basis end of ihe day, some cus|urnars ihey may wam coffee io be deiiyesed and say Ql Ur Q2 Ur Q3 0!

Akhil Parekh

Chalk!

Srishanl.

Chalk!

Srishanl.

Chalk!

Srishanl.

Chalk!

Srishanl.

Chalk!

Srishanl.

Chalk!

Srishanl.

Moderator · Conference Operator

Ayush Bhulada.

Praveen Jaipuriar.

CCL PRODUCTS (INDIA) LIMITED · Management

Praveen Juipuriar.

Ayush Bhuhuiu.

Chalk; Srishanl.

Ayush Bhuhuiu.

Chalk; Srishanl.

Ayush Bhuhuiu.

Modemor.

Dhiral Shah.

Chalk; Srishanl.

Challa Srisham.

Dhiral Shah.

Challa Srisham.

Dhiral Shah.

Challa Srisham.

Dhiral Shah.

Challa Srisham.

Dhiral Shah.

Challa Srisham.

Dhiral Shah.

Challa Srisham.

Dhiral Shah.

Challa Srisham.

Dhiral Shah.

Moderator.

Lokesh Manik.

Lokesh Manik.

Chalk; Srishanl.

Praveen Jaipuliar.

Lokesh Manik.

Praveen Jaipuliar.

Lokesh Manik.

Chalk; Srishanl.

Lokesh Manik.

Chalk; Srishanl.

Chane Srishanl.

Lokesh Munik.

Chane Srishanl.

Lokesh Munik.

Moderator.

Shroyunsh T3153".

(India) Limirzd szmary I4, 2019 lhal lime and when we inlroduced also we inlroduced near 100% pure cuffaa wilh Jyolhy Labs and lhey slarl aplacing lhe producl in lhe markel lo see whaA feedback we gel fmrn lhe markel Okay The inilial feedback whaA lhey gol is al consumers especially in Sumh India who are reouesling more for a chicory cuffaa blend lhan a pure cuffaa blend 5o lhey came back lo us and asked us if we can supply a chicory cuffaa blend, unforlunalely since we were already al peak capacily al lhal lime we said lhal we cannol do lhis and ii is beuer lo pul lhis producl launch and eyerylhing on hold lhal is why we did nolproceed funhar, so bolh sides we decide lel us slop lhis Exvaimam al lhal slage Frequenlly several years laler we were again Exploring lhis oplion aboul inlroducing our brand and al lhispoinl in lime we lhoughl lel us do il ourselyes direclly we will slarl in a small way and depending on lhe markel feedback we can scale up when required because we slarled gelling good lraclion lhal is why we have decided lo consciously creale a separale subsr iary company and grow lhe business wilh |havmfassicmal leam in place Also we are managing lhe capacily afficiamly oyer lhe pasl decade or so and IJus| wanled lo undersland lhal you also menlioned |haA we are willing lo sacrifice leasl profilable business oyer a good profilable business during some period, so looking al lhal and lhen also looking al your cuslomers who are more lhan 25 years old and who have been associaled wilh you, how would you be able lo balance say a cuslomer who is lhal old and we would probably be giving you a leasl profilable business and giving your capacily ulilizalion, which ismoslof lhe limerunning al i|svaak7 Mosl cases where cusAumErs who buy lhis no prom or low prom producls, lhey also buy premium producls fmrn us, so lhe plain yanilla lype producls where any manufacmra can manufaclure, lhese are lhe producls where we will sell wilh low margin or no margin in some cases, bul in order lo relain lhe cuslomer we have lo uffar Thank you so much for your lime Sir Thank you The llEx| oueslion is fmrn lhe line of Shrayansh Talesara fmrn Vallum Capilal Advisors Please go ahead Good evening sir Thank you for lhe opporlunily My quESAicm is whal lype ufvmduds wilh beyerage company like CocaCula and may be procuring for lhe caffaina reouiremenls fmrn é Pnonvcrs Chalk; Srishanl.

Shreyansh T3153".

Chalk; Srishanl.

Shreyansh T3153".

Moderator · Conference Operator

Nikhil Parekh.

Suresh Kamale.

Chalk; Srishanl.

Suresh Kamale.

CCL PRODUCTS (INDIA) LIMITED · Management

(India) Limirzd szmary I4, 2019 us, would lhara ba commodily in nalura or would il balika yalua addad in nalura, could you givEJus| a fair bii ufidaacm ihaw Ona |hing I cannoi ravaal iha Exam bland |ha| wa ara supplying lo iham, bui wha| I can maniion is i| is aermium bland |ha| ihay ara buying Thay haya avary spacific farmulafiun |ha| ihay hayasaouasiad us lo maka for iham which wa aanoi supplying lo anybody alsa in lha domaslic markal And Sir ona mora ouasiion on avaraga wha| would ba your salas ExpusurE |uwards vuraly cuffaa cus|urnars lika psiyaia labals, cuffaa chains VEIsus lika oihas cusiomars ufcuffaa iha is dairy indusuy, ica crEam playars, chocolaia manufacmmrs, aic, whaI would ba iha ExpusurE lo whaI salas |uwards ihssa playars’7 H is vary difficull lo giya iha Exam numbars, bui our ranga of cus|urnErs includa dirad brand uwuars, paopla la i| ba psiyaia labal for squrrnarkE|5 for oihas brands Tha ica crawls and oihas ingsadiani lika lai i| ba vafumas, ica Craams and oihas ingsadiani manufacmmrs wa may do around may ba 10% lo 15% ufwha|avar businass |ha| wa do goas lo iham and wa also supply a laga ouauiiiss lo rarvackars and tarsallas in diffaranl gaographias, so paopla who am in iha vriva|a labal businass wiihoui manufacmring capabiliiias, |hayjusl haya blanding and packing capabiliiias, wa supply lo iham and ihay supply in ”hair pauiculanagions Wa do good yolumas lo such paopla as wall Goi an idaa Thank you for iha oppouuniiy Thank you Tha naxl ouaslion is from lha lina of Nikhil Parakh from Dhanki Sacuri as Limilad Plaasa go ahaad My ouasiionshaya baan answasad Thank you so much Sir Thank you Tha naxl ouaslion is from lha lina of Smash KamaIa, who is an individual In yasior Plaasa go ahaad Ona ITWIE ouaiion, so I waniad lo know, ihasasacaiyabla days araincraasing linearly fmrn coupla of yaars, so do wa haya any plan at saula lo ramp i| downv If you look a| i| iha ioplina is incraasing yaaranryaar basis, you could saaiha growih in iha obviously ihasacaiyablas also in propouion lo iha ioplina growih is inctaasing okay and on consolidalad basis lhis yoluma gmw|h nina monlh lo nina monlh, wha| is lha varcamaga of gmw|h you haya saan nowI Paga 19 of 24 é PRODIIOYS Chane Srishanl.

Suresh Kemm.

Chane Srishanl.

Suresh Kemm.

Chane Srishanl.

Suresh Kemm.

Moderator.

Lahhminarayana c.

Chane Srishem.

Lahhminarayana c.

Chane Srishanl.

(India) Limirzd szmary I4, 2019 Topiiue i| is same as ihe preyious year and as far as ihe houomiiue is coucerueo ihere is a gmw|h of 19% Iwauieo io kuow yaiue wise growih, uoi reyeuue Vaiue wise, uiuemouihs i| is R5 x21 Crores of |his year and las| year ufRs 819 Crores Sorry, you have misuuoersiooo my ouesiiou, whaA Iwam is yoiume iu WHITE” 15% is ihe yoiume growih Thank you Sir Thank you The uexi ouesiiou is from ihe line of Lakshmiuarayaua Gami from SBICAP Securiiies Please go ahead Jus| coupie ofouesiious, mosi of ihem haye heeu auswereo, firs| is i s a six year iow for coffee prices and Vieiuamese farmers are srruggiiug, do you see ihe goyerumeui siep iuio giyeu ihe iuceuii ye for ins|an| coffee mauufaciurers like yourseif cauuoi Expafling more of vmcassad coffee |han raw greeu beam They are aireaoy giyiug iuceuiiyes for auyoue who isooiug yaiue addifiun iu Vieiuam, soI oo uoi reaiiy see ihem giyiug auy aooiiiouai iuceuiiyes, bu| as far as coffee farmers and an |ha| is coucerueo aiso oue |hing |ha| you have io uuoersiauo is |haA a| ihe curreui ieyei you cauuoi acmally say |ha| ihe farmers are uoi making mouey, a coffee piaui iifecycie is abum 40 years and mosi of ihe piauis haye aireaoy baa“ ihere for ouiie some iime, so ihere is uo ouesiiou abum farmersmakiug auy ioss Due |hing is as far as ihe farmers and Vieiuam are coucerueo, ihey have a good hoioiug capaciiy and ifyou hayeraw maieriai ihe goyerumeui giyes yery iow iuieresi ioaus io ihem, so uoue ofihe farmers are desperaie io SEL ihey haye ihe abimy io build up iuyeuiory and wheu ihe prices go up ihey wiii dump siock iu ihe markaL we have seeu |his happeueo iu ihepasi as wen And auy coiour ou which geographies ini|ially wouio give you ihe gmw|h as we iook mu iuio men If you are asking for us as acompauy I |hink i| is more or iess serad ihroughoui There is uo pariicuiar couurry specificaiiy |ha| we are iookiug ai, we are growiug iu frankly eyery regiou |ha| we are suppiyiug coffee io é Pnonvcrs Lahhminarayana c.

Chalk; Srishanl.

Lahhminarayana c.

Chalk; Srishanl.

Lahhminarayana c.

Chalk; Srishanl.

Lahhminarayana c.

Lahhminarayana c.

Chane Srisheru.

Lahhminarayana a.

Moderator.

Nikhil Upedhyey.

Chane Srishanl.

Nikhil Upedhyey.

Chane Srishanl.

Nikhil Upedhyey.

Chane Srishanl.

Nikhil Upedhyey.

Moderator.

(India) Limirzd szmary I4, 2019 Yes. here lhere will be value addilion lhal lakes place, small packs and more premium producls from wilhin India And one lasl ouesliou if allowed, lhe premium price |ha| fiaaza dried used lo Enjoy has |ha| slill mainlained oyer lhe spraydried coffee lha you selli Fraaza is definilely more premium |han spray, bul lhe premium |ha| we had aluuyad lwo years ago has come down lasl year ilself Thanks Tha| is all from my side Thank you The "an ouesliou is from lhe line of Nikhil Upadhyay from Securilies Inyeslmenl Managemenl Priva|a Limiled Please go ahead Thanks for lhe opporlunily Mosl of lhe oueslious have answered Jus| one lhing on lhe |ax pan of iL on lhe Vielnam eyen wi|h lhe new Expansion, which we do for lhe new capacily for lhe same capacily, would lha |ax rale remain in lhe same 0% brackelor any idea ifyou can giva7 Yes, |ha| will remain lhe same a 0% And how long because you said i| would be more on a yearoueyear negolialionsi Yes, as of now based on lhe goyernmenl policy and all lhere is no sunsel loss |ha| is in place, so we fall wi|hin a cerlain crileria where we are geneaing x amounl of employmenl wi|hin Vielnam, we are in lhe leasl developed areas, lhere is a cerlain crileria |ha| we are following, because of which we are able lo gel |his benefil, so |ha| will conlinue umil iflhe goyernmenl policy changes only lhen i| will gel discoruinue, bul as of now lhere are no indicalions |haA il will change The freeze dried capacily in India, which we are pulling |ha| would be a| marginal |ax rale of MAT of 18%” Yes. lhere is aMAT of 18% and income |ax is 0 For lhe firsl five years we have a |ax holiday Thanks a lol Thank you The nexl ouesliou is from lhe line of Bharal Gupla from Edelweiss Financial Sarvicas Please go ahead é PRODIIOYS Bherel a “pm.

Chalk; Srishanl.

Bherel a “pm.

Chalk; Srishanl.

Bherel a “pm.

Moderelor.

Akhil Parekh.

Moderelor.

Vikes Keslurl'.

Chalk; Srishanl.

Vikes Keslurl'.

Chalk; Srishanl.

(India) Limirzd szmary I4, 2019 Thanks for laking my oueslion I wanled lo gel a clarificalion regarding Brownfield capacily Expansion, which we would be doing in Vielnam, so whal would be lhe avvmxirnam CavEx and how are we going lo fund for M” Il is aboul $8 million lhal we are prolecling for lhis increase in capacily and now asI menlioned in lhe beginning of lhe call we are already debl free in Vielnam and based on lhe profils lhal we have already accumulaled in lhe pasl wilh inlernal accrual ilself we can go on for lhis Expansion Ragarding lhe Indian facilily, freeze dried capacily, so il would be a fiaaza dried capacily which would be haying higher margin, so we can assume lhal going forward our margins which would be in lherange uf25“/u soil would besuslainablev Yes, il will be Thank you Sir Thal is il from my side Thank you The nax|quEs|icm is from lheline of Akhil Parekh from ElaraCapilal Please go ahead My oueslionshaye been answered Thank you Thank you The nexl dueslion is from lhe line of Vikas Kasluri who is an Individual In yeslor Plaasa go ahead In look al your pasl four, five yearsprofils IighL so lhe nel profils have grown fasler lhan lhe lopline, so whal is lhereasou for lhis Srisham” One major reason is because of lhe green coffee price is reducing A couple of years ago whal il happened is lhere was a shorlage of green coffee, lhere was a droughl in Brazil because of which lhe coffee supplies had reduced in lhe world markel, so across lhe board lhe coffee prices eyen louched aboul $3 a kg lhal is $3000 a lonne loday we are al lilerally half cul price, so lhere is a subslanlial reduclion lhal has slarled laking place as lhe issues slarled gelling resolyed Bu| Srisham your business model does nol depend on lhe green coffee prices righW Exacfly, our yolumes have been growing yaaranryaar, lhe yolume growlh does nol gel 100% reflecled in lhe lurnoyer because lhe green coffee prices come down, bul because we are growing yolumes our profil also is growing proporlionalel y é PRomIcrs Vikas Kasluli.

Chalk; Srishanl.

Vikas Kasluli.

Moderator.

Chalk; Srishanl.

Moderator.