Vintage Coffee & Beverages Ltd Q1 FY27 Earnings Analysis

- The company expects to maintain a similar revenue growth trajectory in the coming years. - FY27 will see better performance with utilization of an additional 4,500 MT spray-dried coffee capacity at full capacity (95%). - FY28 will include 11,000 MT of spray and agglomerated coffee capacity plus ~9 months’ contribution from 70% utilization of the freeze-dried coffee plant. - FY29 is targeted for full utilization of the freeze-dried coffee plant along with 11,000 MT spray/agglomerated coffee capacity. - The freeze-dried coffee market is growing, and new capacity will add premium, higher realization products. - Management is confident of selling 100% of production and expanding capacity further by adding another line. - They have good visibility/commitments from customers, supporting rapid ramp-up of sales volumes. - Export sales remain key with broad global customer base, spreading across multiple markets.

- Q1 FY27 expected to be better than Q4 FY26 due to full utilization of additional 4,500 MT spray-dried coffee capacity. - FY27 revenue growth projected with ~95% utilization of 11,000 MT capacity; presence of strong customer commitments. - EBITDA per kg to grow by approximately 5% to 10% in FY27 driven by customer blends and improved product mix. - Margins expected to improve in FY28 due to premium product mix from freeze-dried coffee capacity addition (5,500 MT in phase 1, followed by another 5,500 MT in phase 2). - By FY29, full capacity utilization of freeze-dried coffee plant plus spray and agglomerated coffee expected to boost margins further. - Operating leverage improving supported by increased realizations, premium product focus, and efficient capacity utilization. - Overall, management is optimistic about sustained earnings and margin growth driven by product diversification and capacity expansion over next 3-5 years.

- Ongoing brownfield expansion increased capacity from 6,500 to 11,000 metric tons, completed through internal accruals; fully operational from Q1 FY27. - Setting up a freeze-dried coffee manufacturing facility with 5,500 metric tons annual capacity, expected completion by Q2 FY27-'28. - Total project cost for current expansion around INR 550 crores, with INR 150 crores incurred and remaining INR 400 crores expected over next year. - Future Phase 2 freeze-dried coffee plant (additional 5,500 MT capacity) planned for FY29-'30, with land and building prepared but capex yet to start (estimated around INR 370-400 crores). - Funding: Around INR 300 crores through ECB at ~6% cost, INR 100 crores working capital debt at ~8.3%. - Potential additional capex totaling INR 800 crores over 2-3 years combining Phase 1 and Phase 2 freeze-dried coffee investments. - Expansion includes packaging line capacity enhancement to maintain/increase consumer pack ratio.

- The company is raising debt of around INR 400 crores, with INR 300 crores through External Commercial Borrowing (ECB) at a finance cost of around 4% (including hedging ~6%), and INR 100 crores for working capital at ~8.3% interest. - This INR 400 crores debt is planned for funding the current project costing INR 550 crores (INR 150 crores already incurred, remaining INR 400 crores to be spent over next year). - For the second phase of freeze-dried coffee expansion (another ~INR 370-400 crores capex), the company may need additional ECB or other borrowing as internal accruals might not suffice. No firm decision yet. - Equity capital has already been raised for setting up the freeze-dried coffee manufacturing facility (5,500 MT capacity), marking a strategic step into higher value-added products. - Overall, debt is expected to peak around FY28, with marginal increase from FY26 levels.

- For Q4 FY26, orders and sales are confirmed with visibility up to that quarter. - Full capacity utilization of 11,000 metric tons is expected starting Q1 FY27, with about 95% utilization projected for the entire year. - Sales commitments for Q1 FY27 are around 70%-75% of total projected sales for FY27. - From Q2 FY27 onwards, full capacity sales are expected, with projected sales of approximately 2,300 to 2,400 metric tons in Q2. - The company expresses strong confidence in the order pipeline with visibility and commitments from customers to meet capacity utilization targets.