Summary
Vintage Coffee & Beverages Limited - Q3 FY 2026 Earnings Call Summary Thursday, February 05, 2026 12:00 PM
Event Participants
Executives 5 Balakrishna Tati (Chairman & Managing Director), Jawahar Conjeevaram (Head of Sales & Marketing), Kranthi Kumar Yarkali (Chief Financial Officer), Pritam Roy (Group Head), Sai Tati (Executive Director)
Analysts 7 Aditya Singh, Deepali Bansal, Onkar Ghugardare, Raj Shah, Shubham Bhatt, Sourabh Gupta, Varshit Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹150.5 crores | +71% YoY; Driven by higher volumes, better realization, and improved product mix. |
| EBITDA | ₹28.7 crores | +79% YoY; Margins expanded to 19.1% due to operating leverage and cost management. |
| Profit After Tax (PAT) | ₹19.1 crores | +54% YoY; Strong broad-based performance despite higher tax incidence. |
| 9M FY26 Revenue | ₹387.7 crores | +91% YoY; Reflects sustained demand in core export markets. |
| 9M FY26 EBITDA | ₹69.1 crores | +105% YoY; Margin expansion to 17.8% on higher-value product focus. |
| 9M FY26 PAT | ₹51.2 crores | +109% YoY; Significant bottom-line growth on improved operational efficiencies. |
| Capacity Utilization | 100% | Reached full utilization of 6,500 MTPA instant coffee capacity in Q3. |
| Cash Flow from Ops | ₹3.0 - 4.0 crores | Turned positive in Q3; expected to breakeven for full FY26. |
Geographic & Segment Commentary
- Export Markets: Primary growth driver catering to Europe, Russia, CIS, Middle East, Africa, and SE Asia. Management is diversifying into Central America and new geographies to reduce concentration risk.
- Product Mix: Shifted from 85% bulk sales two years ago to 55% consumer packs (tins, jars, doy-packs) currently. Strategic focus is to reach 70% consumer pack mix to drive higher realization and margins.
- Raw Material Sourcing: Currently 80-85% domestic Robusta and 15-20% imported. Strategy involves increasing imports to 40% (specifically from Uganda and Indonesia) by Q2 FY27 to optimize costs and meet customer requirements.
Company-Specific & Strategic Commentary
- Capacity Expansion (Phase 1): Commissioning 4,500 MTPA additional spray-dried/agglomerated capacity by March 2026 for ₹45 crores. This increases total capacity to 11,000 MTPA, with 100% utilization expected by Q1 FY27.
- Freeze-Dried Coffee (FDC) Project: Investing in a 5,500 MTPA super-premium FDC facility expected to commence by end of FY27. Purchase orders for machinery have been issued; FDC offers 30-40% higher realization than spray-dried products.
- Strategic Financing: Secured equipment financing from European institutions at 4-5% interest (6-7% including hedging), significantly lowering the cost of capital for the FDC project.
- Telangana Government MOU: Signed a long-term MOU for ₹1,100 crores total investment across two phases, eventually aiming for a total capacity of 22,000 MTPA by FY29.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Total Capacity | 11,000 MTPA by March 2026 | Addition of 4,500 MTPA spray-dried line funded via internal accruals. |
| Total Capacity | 16,500 MTPA by March 2027 | Includes commissioning of the first 5,500 MTPA Freeze-Dried Coffee line. |
| FDC Utilization | 65% - 70% in Year 1 | Expected stabilization period for the new premium product line in FY27. |
| Tax Rate | ~25% from Q4 FY26 | Normalization of tax rates after exhaustion of previous accumulated credits. |
| Cash Flow | Breakeven for FY26 | Q3/Q4 performance expected to offset the ₹18.9 crore deficit from H1. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Coffee bean prices remain volatile; management mitigates this via a cost-plus pricing model and quarterly price resets. |
| Working Capital Cycle | Currently high at ~130 days (60 days inventory/70 days debtors) due to transit times for imports/exports; management aims to reduce this as logistics stabilize. |
| Capex Execution | The large ₹500 crore FDC project involves complex machinery imports and debt from European lenders; timely commissioning is critical for FY27 growth targets. |
Q&A Highlights
Pricing & Margins
- Question: What is driving the 7-8% increase in realization per ton? (Sudarshan Padmanabhan)
- Answer: Shift from bulk sales to consumer packs (tins/glass jars) and higher sales of agglomerated vs. spray-dried coffee (Balakrishna Tati).
Expansion Visibility
- Question: How confident are you in utilizing the incremental 4,500 MTPA capacity? (Sudarshan Padmanabhan)
- Answer: Q4 is already sold out; existing customers have provided quantity commitments for the new capacity, targeting 100% utilization by Q1 FY27 (Balakrishna Tati).
FDC Project Financing
- Question: How is the ₹450-500 crore FDC capex being funded? (Aditya Singh/Raj Shah)
- Answer: ₹200 crores from equity/warrants and ₹300 crores from debt. European institutions are funding 70% of equipment at ~6-7% all-in cost (Kranthi Kumar Yarkali).
Raw Material Sourcing
- Question: Why the shift toward increasing imported beans? (Shubham Bhatt)
- Answer: Targeting Robusta from Uganda and Indonesia which is highly acceptable to global customers and helps optimize the blend cost (Balakrishna Tati).
Key Takeaway
Vintage Coffee & Beverages Limited delivered a robust Q3 FY26, with revenue climbing 71% YoY to ₹150.5 crores and EBITDA margins expanding to 19.1%. The company achieved 100% utilization of its current 6,500 MTPA capacity, driven by a strategic pivot toward high-value consumer packs and agglomerated coffee. A major capacity expansion to 11,000 MTPA is set for commissioning in March 2026, with a further move into the super-premium Freeze-Dried Coffee (FDC) segment (5,500 MTPA) slated for FY27. Management has secured low-cost European financing for this expansion, which is expected to yield 30-40% higher realizations. While working capital remains elevated at 130 days due to global logistics, operating cash flows turned positive this quarter. The company is positioned for a significant volume and margin CAGR over the next two years as it scales toward a total 22,000 MTPA target by FY29.
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