This FMCG stock is eyeing high-teen volume growth. Can it ace its lofty goal?

The FMCG sector has been down and out for a while now. Be it HUL, Marico or Dabur; all have struggled to generate double-digit volume growth in the past few years. This, combined with their high P/E ratios of at least 50 times, has subdued their share performance, too. But the star of our story, CCL Products, is head and shoulders above the rest. Its volumes have grown 10-12 per cent annually in the last decade. Notably, in FY24, they grew 14 per cent. If that's not impressive enough, the company has guided for high teens volume growth of 18-20 per cent for the next few years as well. The stock has shot up almost ten times in the last ten years, but trades at a reasonable P/E ratio of 32 times. Further, the company has a solid five-year median ROE of 18 per cent. The numbers make a compelling case, so we decided to decode the business and analyse its tall claims. The business While CCL Products majorly deals with B2C customers, it is still a close cousin of the FMCG family. It manufactures and distributes coffee products, mostly to global brands like Strauss Coffee and Jacobs Douwe Egberts. The company doesn't own any plantations. It only has factories that turn the raw coffee sourced from across the world into consumable spray-dried and freeze-dried coffee. Simply put, its end products are fast consumer goods. That aside, the company works on a cost-plus model. Irrespective of the prevailing coffee prices, it sells the final products to clients at a fix