The beleaguered Coffee Day Enterprises, the company that owns coffee retail outlet Café Coffee Day, has entered into a couple of debt settlement agreements in FY26. Yet it is not out of the woods. Even as it battles for survival amid piling insolvency petitions and defaults on repayments, the once popular coffee outlet is fast losing its relevance to growing competition.
Recently, the company entered into a One Time Settlement with the Axis Bank for an outstanding loan of Rs 70 crore. Under the agreement, the entire amount is to be paid by September 30, 2026. This follows a major Rs 205 crore settlement agreement with debenture holders earlier in the fiscal year, which saw payments of over ₹110 crores made in April and July 2025
Analysts say that the recent debt settlements do not signal a revival, as the company continues to report repayment defaults, auditor disclaimers and negative same-store sales growth, with recent profits supported by one-off gains from loan settlements, analysts said.
An analyst from a domestic broking firm said, “Cafe Coffee Day’s plan to repay 70 crore of debt is a small positive step, but it does not mean the business has recovered or is even on a clear path to recovery. The amount is minor compared with the company’s historical debt, and it will mainly help reduce immediate pressure from lenders, not to fix the business itself.
CCD’s core problem is not just debt. The brand has lost relevance with customers. Its cafes feel outdated. It is neither a value chain nor a premium player, the analyst added. On one side, brands like Barista and local cafes compete on price and convenience and on the other, Starbucks sells experience and aspiration.
Plus, competition in the cafe market is intense now with newer brands such as Blue Tokai and Third Wave Coffee expanding rapidly. “So, CCD no longer stands out in either category and is no longer a first-choice brand for younger consumers,” he said.
“In what we can see, management appears focused on keeping the business running rather than rebuilding it. Store closures and cost-cutting may stabilise cash flow in the short term, but there is no clear path to sustainable profits. So, without major investment, stronger leadership, and a refreshed brand, a full comeback is unlikely. The company may continue to survive but only in a smaller form,” said the analyst mentioned earlier.
For the quarter ended December, the company reported consolidated revenue from operations of Rs 286.39 crore, compared with Rs 280.41 crore a year earlier. Profit after tax stood at ₹70.49 crore for the quarter, against a loss of Rs 11.46 crore in the corresponding period last year. The company reported a profit on the back of one-time gains.
As of December 31, 2025, the group had borrowings of Rs 839 crore. There were certain covenant breaches and defaults in repayment of principal and interest, and some lenders had exercised their rights, including recall of loans, according to the notes to accounts.
In February 2025, the National Company Law Appellate Tribunal allowed the company’s appeal and quashed the earlier insolvency proceedings initiated against it. Coffee Day Enterprises’ fate took a downward turn after its founder VG Siddhartha’s suicide in 2019 blew the lid off the company’s financial woes. Malvika Krishna, Siddhartha’s wife, now has the reins of the company.