Coffee Day Enterprises Limited — Important, 13-02-2025: Financial Result Updates

COFFEE DAY ENTERPRISES LIMITED

Revenue for Q3FY25 stood at ₹280 Cr, reflecting a 9% year-over-year growth, while year-to-date (YTD) revenue increased 6% to ₹810 Cr. The growth can be attributed primarily to increased demand in the coffee and related business sector, alongside expansion strategies.

Despite revenue growth, EBITDA fell to ₹42 Cr, down 66% YoY, impacted by a significant one-time write-off from previous periods. Year-to-date EBITDA improved by 22% to ₹135 Cr when excluding one-time impacts, indicating better operational efficiency despite the quarterly decline.

Net loss attributable to owners for Q3 was ₹10 Cr, compared to a profit of ₹69 Cr in Q3FY24. Year-to-date, the net loss grew to ₹25 Cr versus a net profit of ₹20 Cr last year. Factors pressuring profitability include high operational costs and increased finance charges, which saw a rise in interest expenses linked to debt repayment issues.

Operational costs increased by approximately 13.35% YoY, driven by finance costs and employee benefits, signaling operational inefficiencies that management may need to address to stabilize margins. Additionally, net debt and covenant breaches warrant caution, as major lenders have initiated legal proceedings.

The balance sheet reflects a negative shift, with total borrowings reported at ₹1,273 Cr, amidst ongoing restructuring discussions. The company’s liquidity position could be strained given the ongoing Corporate Insolvency Resolution Process (CIRP) discussions and lack of clarity on financial recoveries from related parties, particularly from MACEL, which amounts to ₹995.12 Cr.

Investor sentiment remains cautious as the company battles with refinancing efforts and operational challenges, compounded by local market volatility. Hence, maintaining a **hold** stance appears prudent, as the risk of further losses and operational hiccups still looms large over the fiscal stability of the enterprise.