Shares of Coffee Day Enterprises Ltd (CDEL) continued their upward momentum, rising 5.48% to ₹32.31 in Tuesday’s session. The stock has gained 25% in the last five days, fueled by positive developments regarding the National Company Law Appellate Tribunal (NCLAT) ruling in favor of the company.
On Monday, March 3, 2025, CDEL’s shares surged 19.97%, hitting the upper circuit at ₹25.65 on the BSE. The rally was triggered after NCLAT set aside the Corporate Insolvency Resolution Process (CIRP) initiated against the company. The tribunal overturned insolvency proceedings filed by IDBI Trusteeship Services over a default of ₹2.28 billion, marking the second instance where the company has received legal relief from lenders.
Business operations and debt restructuring
Coffee Day Enterprises operates across multiple sectors, including:
- Café chains: Owns and manages Café Coffee Day (CCD), along with brands The Lounge and The Square.
- Vending machines: Operates under Coffee Day Xpress and Coffee Day Beverages, focusing on the sale of coffee beans and powder for household and commercial consumption.
- Other ventures: Engaged in logistics, financial services, and hospitality.
The company has made significant progress in reducing its debt burden, which stood at ₹12.73 billion ($146 million) at the end of Q3 FY25, down from ₹12.89 billion in Q4 FY24. Since 2019, CDEL has cut its debt by 82.35%.
While store closures have been a key part of its debt management strategy, the company has expanded its vending machine business, which is seen as a cost-effective alternative to physical cafés. The number of CCD vending machines increased by 6% YoY to 55,667 in Q3 FY25, just 5% below its peak count of 58,697 in FY20.
Tata Consumer had previously explored acquiring CCD’s vending segment in 2020, but later dropped the plan over valuation concerns. Tata Consumer has since launched its own vending machine business, targeting 4,000 machines by the end of FY25.
Stock performance:
- Current price: ₹32.31 (+5.48%)
- Previous close: ₹30.63
- Day’s range: ₹31.64 – ₹33.30
- Market cap: ₹681 crore
- 52-week range: ₹21.28 – ₹74.65
With the NCLAT ruling providing a major boost to investor confidence, Coffee Day Enterprises is expected to continue focusing on its cost-effective vending operations while reducing its debt further.
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