The shares of the FMCG company, specializing in the manufacturing and exporting of instant coffee (specifically spray-dried and agglomerated coffee), instant chicory, and other beverage-related products, are in focus after leading Brokerage firm Nuvama initiated a Buy Target with an upside potential of 50 percent.
With a market capitalization of Rs. 2,153.53 Crores on Monday, the shares of Vintage Coffee And Beverages Ltd jumped upto 2.6 percent, reaching a high of Rs. 168.10 compared to its previous closing price of Rs. 163.80.
What Happened
Vintage Coffee And Beverages Ltd, engaged in the manufacturing and exporting of instant coffee (specifically spray-dried and agglomerated coffee), instant chicory, and other beverage-related products, is in focus after a leading Brokerage firm, Nuvama, initiated a Buy Target of Rs. 250 on it with an upto 50 percent Upside Potential from yesterday’s close price.
The reasons for the “Buy” target
Strong Innovation & Product Mix
Vintage Coffee is diversifying into premium freeze-dried coffee (FDC) and agglomerated coffee, which have higher margins and realisations. The shift towards these high-value products, combined with its expertise in private label solutions, highlights the company’s innovation and ability to capture emerging consumer trends.
Robust Revenue Growth Outlook
With manufacturing capacity expanding from 6,500 MT to 11,000 MT by this fiscal year and 16,000 MT by FY27, Vintage Coffee is set to quadruple volumes. Nuvama expects a 75% sales CAGR over FY25-28, driven by new capacity, rising demand, and strong order visibility.
Positive Profitability & EPS Potential
EBITDA and PAT are projected to compound at over 87% and 76% respectively, during FY25-28. Margin expansion from high-value products, operating leverage, and efficient capital allocation are expected to push return ratios above 20% by FY27, indicating multi-fold earnings growth.
Strong Market Position & Global Opportunity
Operating in a global instant coffee market projected to reach $46 billion by 2030, Vintage Coffee is well-placed to scale rapidly. Its private label and at-home consumption focus allow it to tap into underpenetrated segments and long-term client relationships, providing earnings visibility.
Attractive Re-Rating Potential
Given its superior growth trajectory, improving return ratios, and expansion into high-margin products, Nuvama believes the stock is well-positioned for a valuation re-rating, offering long-term upside for investors.
Financials & Others
The company’s revenue rose by 133 percent from Rs. 44 crores to Rs. 102 crores in Q1FY25-26. Meanwhile, Net profit rose from Rs. 5 crores to Rs. 14 crores in the same period.
The company shows strong profitability with a Return on Capital Employed (ROCE) of 15.4% and a Return on Equity (ROE) of 17%, indicating efficient use of both capital and shareholders’ funds. Its low debt-to-equity ratio of 0.27 suggests a healthy balance sheet with limited financial risk.
Additionally, a PEG ratio of 0.60 implies the stock may be undervalued relative to its growth potential, making it attractive for investors seeking growth at a reasonable price.
Vintage Coffee And Beverages Ltd. is a publicly listed Indian company, formerly known as Spaceage Products Limited, that is a holding company for manufacturing and exporting instant coffee, chicory, and other beverages. It has recently expanded its business through subsidiary companies and a new premium lounge in Navi Mumbai.
The company is at the forefront of manufacturing and exporting high-quality Instant Coffee, Instant Chicory, and a range of other beverages. With a strong foothold in private labeling it offers bespoke solutions that cater to diverse customer needs.
The company offers a wide range of instant beverages, including Spray Dried Instant Coffee, Agglomerated Instant Coffee, and Instant Chicory. Its products are available in diverse packaging options such as tins (25–200 g), pouches (45 g–1 kg), sachets (1 g–1 kg), and 25 kg corrugated boxes, catering to both retail and bulk requirements.
Written by Sridhar J
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