CCL Products (India) Ltd Management Discussions

Business Review

FY 2024–25 presented a challenging operating environment marked by sharp increases in green coffee prices, intensifying competitive pressures, and global geopolitical tensions that disrupted supply chains. Despite these headwinds, your Company demonstrated strong operational resilience, sustaining its growth trajectory and maintaining profitability.

For the financial year 2024-25, on a consolidated basis, your

Company recorded a turnover of Rs. 3105.75 Crores and net profit of Rs. 310.34 Crores as compared to previous years turnover of Rs. 2653.70 Crores and net profit of Rs. 250.08 Crores.

The Company has successfully completed all the planned capacity expansions and these strategic investments will enable us to meet our growth aspirations for the future and the rising demand.

Parallel efforts were undertaken to enhance the product mix by increasing the share of premium and value-added products, thereby fortifying market positioning and laying a robust foundation for long-term growth. Further, with a view to reduce dependence on non-renewable resources, your

Company actively pursued initiatives around energy efficiency and fuel substitution during FY 24-25. Capex investments such as deployment of a Vapour Compression Refrigeration system in manufacturing, R&D investments around Advanced Concentration system and Micro grinder, and reduction in boiler coal by increasing the uptake of green fuels such as husk, spent coffee waste reinforced the Companys commitment towards strengthening its environmental footprint. Your Company is also looking to increase its renewable energy adoption rate by evaluating proposals around hybrid wind-solar energy.

While we are not fully insulated from rapid, persistent changes, the Company has demonstrated resilience throughout these challenging times. In the Indian domestic market, the Companys branded business continued to post aggressive growth. The brand has also gained significant traction on leading e-commerce platforms and direct-to-consumer (D2C) channels, reflecting increased consumer preference and engagement.

This growing brand equity and positive consumer sentiment bode well for future market share gains, reinforcing the

Companys commitment to quality, innovation, and customer-centricity.

In the FY 2024-2025, the global economy was weighed down by on-going conflicts, rising geopolitical risks, and strained supply chains. The Russia-Ukraine war dragged on with no resolution, continuing to impact energy and grain markets, while the Israel-Gaza war intensified tensions across the Middle East. Attacks in the Red Sea disrupted shipping routes, raising costs and adding delays to global trade. Many companies accelerated shifts away from China toward alternative manufacturing hubs like India and Mexico, but these moves brought new challenges. Inflation eased slightly, allowing some central banks to begin cutting rates, yet growth remained uneven—resilient in the U.S., sluggish in China, and uncertain in emerging markets. With conflict zones still active and global trade patterns shifting, the world heads into 2025 in a cautious "wait and see" mode. Despite these global headwinds, we continue to sustain and grow in the Indian market, supported by resilient demand and a strong local supply chain.

The global economy is at a critical crossroads, shaped by significant policy shifts, most notably those introduced by the United States. In April, the US announced sweeping tariffs that have intensified trade tensions and heightened policy uncertainty worldwide. These measures are regarded as both a negative supply shock and an external demand shock for the global economy.

Simultaneously, rising uncertainty and tighter financial conditions are contributing to a broader negative demand shock. As a result, global economic growth was projected to decelerate from an estimated 3.3% in 2024 to 2.8% in 2025.

This represents a decline of 0.5 percentage points from earlier 2025 projections made in January by the International

Monetary Funds (IMF).

As per the IMF, World Economic Outlook, April 2025 edition, growth in advanced economies is now expected to reach only 1.4% by the end of 2025, reflecting a reduction of 0.5 percentage point. In particular, the United States is forecast to slow to 1.8%, down by 0.9 percentage point. Meanwhile, emerging markets and developing economies are projected to grow at 3.7%, a decline of 0.5 percentage point, with Chinas outlook revised down to 4%. As per the same edition report, global headline inflation is anticipated to moderate more gradually than previously expected, reaching 4.3% by the end of 2025. Inflation projections for advanced economies have been revised upward, partly due to supply-side pressures arising from the new tariff measures.

Overall, risks to the global outlook remain tilted to the downside, with escalating trade restrictions and persistent policy uncertainty emerging as key challenges for the international economic environment. During the year, the global economy saw muted growth, with cautious consumption and on-going disruptions from geopolitical conflicts. Chinas growth slowed, weighed down by weak domestic demand and structural issues, while India outperformed, growing at 6–7%, supported by strong consumption, infrastructure spending, and investor confidence. Conflicts in Ukraine and Gaza, along with logistics disruptions in the Red Sea, pushed up shipping and insurance costs, impacting global trade flows. These challenges, however, favoured Indias position as an alternative supply chain hub, reinforcing its medium-term growth momentum as the world adjusted to a more fragmented and uncertain economic landscape. Indias competitive advantages in skilled labour and cost efficiency and the countrys strategic position as an alternative to China amid global supply chain diversification. Increased capital investment and M&A activity are also driving higher output and export capacity.

Indian Economic Overview:

Indias economic outlook remains robust, with GDP growth projected at 6.5% by the end of 2025 as per the IMF (World Economic Outlook). This sustained momentum underscores the countrys resilience amid global economic uncertainties. The outlook is underpinned by strong domestic fundamentals and strategic policy initiatives that continue to support expansion. On-going structural reforms, advances in technology, and large-scale infrastructure development are driving this growth, while targeted government measures, steady consumption, and improving labour market conditions further strengthen the trajectory.

Economic resilience is being reinforced by solid performance in the agricultural and services sectors, supported by stable private consumption and a balanced macroeconomic environment.

Overall, Indias manufacturing sector is poised for substantial expansion, driven by strong policy support, sustained investment, and technological progress. This growth is translating into rising export volumes that will be critical for maintaining the countrys economic momentum.

Global & Indian Economy: Navigating Headwinds with

Strategic Agility

Global Economic Context

This year, the global economic landscape was characterized by elevated interest rates, volatile currency movements, and uneven recovery in consumer demand across regions. Key exporting nations faced climate-induced disruptions in coffee production, notably Brazil and Vietnam, contributing to price instability and supply chain imbalances. Furthermore, on-going geopolitical tensions and trade-related uncertainties, including shipping route volatility and regulatory headwinds, presented operational challenges for exporters.

Despite these macroeconomic pressures, CCLs multi-location manufacturing strategy and global sourcing capabilities mitigated risks associated with regional disruptions. The Companys operations remained stable and efficient, supported by proactive inventory planning and forex risk management.

Indian Economic Outlook

India continued to demonstrate robust economic fundamentals, with GDP growth estimated at 6.5% during 2025 as per the

IMF (World Economic Outlook). Key consumption-driven sectors such as retail, FMCG, and food services showed resilience. Government-led initiatives to enhance digital infrastructure and formalize rural distribution channels also created a supportive environment for packaged beverage players.

CCL leveraged these favourable tailwinds to strengthen its domestic market presence, while maintaining a competitive cost structure and agile sourcing capabilities. The Company is also focused on improving its energy efficiency through expanded deployment of renewable and hybrid energy systems across its Indian facilities.

Strategic Resilience: CCL countered global volatility through agile forex risk management, and strategic raw material stocking, underscoring its ability to scale amid disruption.

Industry Overview: Brewing Disruption in a Resilient Sector

The Indian coffee market, predominantly driven by instant formats, continues to show significant momentum. Valued at approximately INR 4,000 crore, with INR 3,500 crore attributed to instant coffee, the segment is growing at a CAGR of 11% as reported by the Protium and industry coverage report and the Grand Review Research report.

Growth is being supported by favourable demographics, rising disposable incomes, urbanization, and increasing exposure to international consumption patterns. Furthermore, an observable shift toward value-added formats, private-label offerings, and health-centric products continues to reshape consumer expectations.

The emergence of direct-to-consumer models and subscription-based delivery mechanisms is also redefining retail channels, particularly in developed markets. North America and Western Europe are emerging as key innovation zones, led by demand for specialty instant variants, single-origin offerings, and ethically sourced blends. In this dynamic environment, CCLs capabilities in scalable, customized manufacturing and global reach have positioned it as a trusted partner to institutional and retail clients worldwide.

Opportunities: Brewing Value Across Borders

1) Private Label Growth

The Company observed sustained growth in the private label segment, particularly across Southeast Asia, Europe, and Latin America. Retail partners are increasingly seeking agile manufacturers with the ability to offer customized blends, differentiated SKUs, and efficient delivery timelines. CCLs vertically integrated operations and established global network offer a unique value proposition in this space.

2) Premiumization & Specialty Products

There is a growing market preference for freeze-dried, flavoured, and specialty coffee formats. The Companys Vietnam facility, which became fully operational during the year, enhanced CCLs ability to address this premium segment. With a focus on high-margin and value-added offerings, CCL continues to shift its product mix in favour of customized, specialty-grade products.

3) Expansion of Branded Business

CCLs domestic retail brand, Continental Coffee, continued to gain traction across modern trade, general trade, and digital platforms. The brand is now available across over 150,000 retail outlets and is supported by a network of more than 700 distribution partners. Innovations in packaging, product formulations, and consumer marketing have further strengthened brand equity.

4) ESG-aligned Manufacturing

Sustainability and traceability have become integral to secure standards among institutional clients, particularly in Europe and North America. CCLs sourcing practices include Fair-trade, Organic and Rainforest Alliance certifications. The Company also continues to reduce its environmental impact through increased focus and persistent efforts to initiate the use of renewable energy and waste minimization practices. These initiatives are aligned with CCLs long-term commitment to responsible growth.

5) Category Positioning

Consumers in developing regions like Asia and Eastern Europe today have more disposable income and aspirations of more Westernized lifestyles. Instant coffee presents significant growth potential in traditionally tea-drinking emerging markets, serving as an accessible entry point for consumers across age groups.

The category is well-positioned to attract a new customer base — particularly younger demographics — through innovative, convenient formats offered at varied price points, catering both to the mass market and to more niche, premium consumer segments

Risks and its Mitigation:

Price Volatility: Coffee prices have been highly volatile in recent years, reaching record highs that discourage buyers from committing to long-term contracts and reduce visibility for supply planning.

Mitigation Strategy at CCL: Your company operates on a cost-plus model, which helps shield clients from price volatility.

However, in highly volatile market conditions, clients often shift to short-term contracts to manage risk more effectively.

In response, we adapt our planning and dispatch strategies to ensure continued reliability and efficiency. We have established flexible agreements that strike a balance between short and long term procurement needs, providing both stability and adaptability.

Climate Sensitivity: Production is highly vulnerable to unpredictable weather, including shifts in temperature and rainfall that can disrupt yields and global supply.

Mitigation Strategy at CCL: You Company diversifies sourcing regions to reduce weather-related disruptions and procure raw materials at rates mutually beneficial to suppliers and the company, ensuring stable and resilient supply chains and thereby also combating the climate sensitivity. Sourcing from various regions across the world, we have built an internal ecosystem where different coffee origins can be blended to achieve the desired taste and profile. This approach also helps insulate us from climate-related disruptions in any single region.

Intensified Market Competition: The growth of instant coffee production capacity and the proliferation of direct-to-consumer brands have increased competitive pressures in the market.

Mitigation Strategy at CCL: Your Company focuses on differentiating products through premium quality and certifications, enhancing digital presence and loyalty programs, and improving operational efficiency are essential to sustaining competitiveness. Our strength lies in a well-integrated strategy across sourcing, marketing, business development and product innovation, enabling us to compete effectively and sustain long-term growth. A robust sourcing strategy ensures quality, cost efficiency, and supply stability, while our marketing and brand positioning continue to build strong consumer loyalty across diverse markets. Our business development and product development teams consistently identify emerging trends and translate them into relevant offerings, keeping us ahead of the curve. Leveraging economies of scale, we drive operational efficiency and cost competitiveness. This comprehensive approach gives us a clear competitive edge, built over years of consistent execution, allowing us to deliver sustainable growth and remain resilient in an evolving global market.

Segment-wise or Product-wise performance: The operations of the Company primarily relate to a single business segment

- Coffee and Coffee-related products. The Company also has an FMCG Products Division, which encompasses packaged food and beverage items. However, in accordance with the requirements of Indian Accounting Standard (Ind AS) 108 -

Operating Segments, the FMCG Products Division does not meet the prescribed quantitative thresholds for separate reporting as a distinct segment. As a result, the segmental reporting is not applicable to the Company and hence the segment-wise financial information has not been presented in the financial statements.

Financial performance:

During the year under review, the Company demonstrated consistent financial performance despite a challenging global macroeconomic environment. On a standalone basis, revenue grew to Rs.1,718 crores, supported by higher export volumes and steady realizations across key markets. Net profit stood at Rs.92.30 crores, reflecting resilient operating margins and disciplined cost management. On a consolidated basis, revenue reached Rs.3,105.75 crores with net profit of Rs.310.34 crores. The growth in earnings was underpinned by improved capacity utilization, operational efficiencies, and a diversified product portfolio that helped mitigate volatility in input costs.

Strong cash flows from operations supported timely debt repayment, funding of capital expenditure for capacity expansion, and the distribution of dividends to shareholders. During the year, the Board has recommended a final dividend of Rs.5/- per equity share of Rs. 2/- each for the year ended March

31, 2025.

The Companys financial results reflect its ability to maintain profitability and liquidity while pursuing strategic growth initiatives. The management remains committed to strengthening production capabilities, optimizing working capital, and expanding the Companys presence in emerging markets.

financial ratios, along with detailed explanations

Standalone Ratios

Financial Ratios	Standalone FY 2024–25	Standalone FY 2023–24	Change (%)	Favourable / Unfavourable	Reason for Change
Debt Service	3.30	2.25	46.57%	Favourable	Higher Operating profit and lower
Ratio					Debt
Trade Payables	16.53	25.28	-34.61	Favourable	The change in ratio is mainly due to
turnover ratio					higher payables from vendors with
					higher Credit period.

Consolidated Ratios

Financial Ratios	Consolidated FY 2024–25	Consolidated FY 2023–24	Change (%)	Favourable / Unfavourable	Reason for Change
Trade Payables	15.27	24.62	-37.97	Favourable	The change in ratio is mainly due to
turnover ratio					higher payables from vendors with
					higher Credit period

Strategic Milestones:

Rs. Commissioned the expanded Vietnam facility, improving response times and enabling high-margin product delivery.

Rs. Increased share of freeze-dried offerings, improving margin profile.

Rs. Deepened global footprint, entering new markets in East Asia and Latin America.

Rs. Advanced sustainability agenda with hybrid power deployment and energy optimization.

Operational Infrastructure

The Company operates integrated manufacturing facilities in India, Vietnam, and Switzerland. On-going automation and digital transformation initiatives, including predictive maintenance tools and real-time production monitoring systems, have improved operational efficiency. CCL has also taken steps to optimize capacity utilization across locations and enhance its R&D infrastructure.

CCL also intensified its internal transformation, rolling out digital manufacturing dashboards, predictive maintenance frameworks, and automated blending systems to enhance throughput and reduce waste.

Its financial prudence, reflected in strong free cash flows and a dividend pay-out of Rs.5 per share, underscores CCLs ability to grow while returning value to shareholders. The company also doubled down on its talent pipeline, introducing leadership acceleration programs, frontline skill certification, and cross-border functional rotations for core teams. These internal shifts complement CCLs transformation from a manufacturing-first company to a customer-experience-driven global coffee partner.

Forward Outlook: Brewing the Future of Coffee

Looking ahead to FY 2025–26, CCL will focus on:

Optimizing global capacity post-Vietnam expansion.

Premiumizing the product portfolio via specialty and flavoured SKUs.

Scaling branded retail domestically and entering key overseas markets.

Driving green energy adoption, aiming for a 40–50% renewable share in operations.

Entering new geographies such as Africa and Eastern Europe via B2B alliances.

Key product rollouts will include flavoured freeze-dried lines, plant-based coffee mixes, and functional variants (e.g., adaptogenic or collagen-infused coffee). These will be supported by deeper investments in consumer insights platforms, enabling data-driven product launches across multiple geographies.

Internal Control Systems and Their Adequacy

Your Company has established robust internal control systems covering business processes, operational efficiency, and compliance with all applicable laws and regulations. Regular internal checks and audits ensure that responsibilities are effectively discharged. A comprehensive review of internal controls, accounting practices, and policies is conducted periodically. Your Company has implemented an adequate internal control and audit framework appropriate to its size and nature of operations.

Internal audits are conducted on a quarterly basis. Internal auditors engage with all levels of management, and their reports are presented to the audit committee. After examining the findings and recommendations, the audit committee instructs the respective departments to implement corrective actions accordingly and reviews the actions taken by various departments in the next quarter to ensure utmost compliance.

Human Resource Development and Employee Engagement

At CCL, human resources are regarded as a critical pillar of sustainable growth and long-term success. The Company has established robust people practices focused on attracting, developing, and retaining skilled talent across all levels of the organization.

CCL is committed to fostering an inclusive and performance-oriented culture built on meritocracy, collaboration, and continuous learning. Structured training programs, functional capability development, and leadership interventions are regularly conducted to enhance technical and managerial competencies. The Company also emphasizes succession planning to ensure continuity in key roles and develop a strong leadership pipeline.

To strengthen employee engagement and retention, CCL prioritizes transparent communication, employee recognition, and participative decision-making. Periodic town halls, open forums, and feedback mechanisms enable employees to connect with the leadership team, share suggestions, and align with the Companys strategic objectives.

The Company continues to benchmark its HR policies and practices against industry standards to remain an employer of choice. Initiatives such as wellness programs, grievance redressal mechanisms, and flexible work practices contribute to a positive and enabling work environment.

Going forward, CCL will remain focused on nurturing talent, strengthening organizational capabilities, and building a culture that encourages innovation, accountability, and high performance.

Disclosure of Accounting Treatment

The Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2025, together with the comparative period data as at and for the year ended March 31, 2024, as described in the summary of significant accounting policies. Primarily a treatment different from that prescribed in an Accounting Standard has not been followed in the preparation of financial statements. However, as regards amendments to certain accounting standards, the applicability / effect on the financial statement has been evaluated and been treated accordingly as explained in Note 1 of the Standalone Financial Statements. Further, the financial statements represent a true and fair view of the underlying business transactions.

Cautionary Statement

Statements in this management discussion analysis describing the Companys objectives, projections, estimates, expectations may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could make difference to Companys operations include economic conditions affecting the domestic market and the overseas markets in which the Company operates, changes in the Government regulations, tax laws, other statutes and other incidental factors.

	For and on behalf of the Board
	Sd/-	Sd/-
	Challa Srishant	B. Mohan Krishna
	Managing Director	Executive Director
	DIN: 00016035	DIN: 03053172
Place: Hyderabad
Date : July 21, 2025