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Nov, 03 2015

Coffee Day Enterprises targets 18% growth in FY16

"We are looking at 15-18 per cent annual growth in our business. We have already improved in the second quarter and this year will be profitable," said CDEL Chairman and Managing director VG Siddhartha.

Coffee Day Enterprises Limited (CDEL), which runs Cafe Coffee Day chain, hopes to grow at an annual rate of 18 per cent on aggressive expansion in its core business. The coffee chain also expects to post profit in the current fiscal on higher footfalls and increased consumption, reported PTI.

For now, the company's shares debuted on a weak note, opening at Rs 313 against the issue price of Rs 328 on the BSE while it opened at Rs 317 on the NSE. CDEL shares settled the day at a much lower level of Rs 270.15 on BSE.

"We are looking at 15-18 per cent annual growth in our business. We have already improved in the second quarter and this year will be profitable," said CDEL Chairman and Managing director VG Siddhartha.

The firm has incurred losses on a consolidated basis for the past three financial years on account of high operational costs in some of its subsidiaries.

Siddhartha said CDEL would not be looking to venture into new business segments besides coffee in the near-term. The company operates in other select businesses such as development of IT-ITeS technology parks, logistics, financial services, hospitality and IT-ITeS.

The firm would expand its cafe retail business by opening outlets in new and existing markets, besides also increasing the sales in existing cafes. It would focus on expanding its network, primarily by opening outlets, in high visibility and high traffic locations particularly in tier I and tier II cities.

The company will open over 216 outlets over the next two financial years of which 81 would be set up in 2015-16. It would also set up 105 kiosks in the next two fiscals, with 35 in the current year itself.

The coffee chain firm also plans to double its coffee roasting capacity to 14,000 million tonnes in 2015-16. It will also add an in-house tea packaging capacity to improve operating margins.

Coffee Day Enterprises' Rs 1,150-crore public issue was over-subscribed 1.81 times last month. The company has a network of around 1,500 outlets and commands a market share of 46 per cent.

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