Analyst's Diary: This coffee chain is brewing a comeback

Coffee Day Enterprises, the owner of the restaurant chain Cafe Coffee Day or CCD, was once at the forefront of India's soaring coffee culture. However, in recent years, the company has experienced a rollercoaster of challenges. The company's debt soared from around Rs 4,000 crore in FY15 to more than Rs 7,000 crore in FY19. Reason? Mismanagement. The untimely death of its founder, VG Siddhartha, added to the distress. All these events led to the company's share price to plummet about 90 per cent between 2018-2021. While things are not going well for the company, its share price has rebounded 82 per cent in the last year. Here's what has changed. Turnaround in the works Post Siddhartha's death, his wife Malvika Hegde, took over the business. One of the first major steps she took was to narrow down the company's focus. It managed to pay off a significant portion of its Rs 7,000 crore debt by selling most of its non-core assets, such as Tech Park and shares in MindTree, an IT company. It also significantly scaled down its cafe business. Several debt restructuring measures also helped. The number of stores has also fallen from a peak of 1,752 in FY19