With measures being taken by the Government, to boost the economy, we anticipate an increase in demand in the near term which would support operations to mitigate short term challenges. We thereby recommend Hold rating on the stock with a revised target price of Rs. 2,445 based on 64x FY22E adj. EPS. Challenging Q1; Encouraging recovery expected The revenues for JFL fell drastically by 59.5% YoY to Rs. 380cr in Q1FY21, owing to acute challenges of demand and supply on account of nation-wide lockdown and...

JK Cement: We retain BUY on JK Cement (JKCE) with a revised target price of Rs 1,635. Post untimely demise of erstwhile MD & Chairman Mr Yadupati Singhania on 13th August, his nephews Mr Raghavpat and Mr Madhavkrishna have been elevated as MD and Dy MD & CEO respectively and his mother Mrs Sushila Devi as Chairperson. In 1QFY21, JKCE's standalone net sales/EBITDA/APAT fell 27/29/50% YoY. While sharp white/putty volume loss pulled down revenue, EBITDA decline got contained on healthy pricing across markets, healthy discretionary cost controls, and lower fuel prices. APAT fall accelerated on higher capital charges. Volume momentum has improved across both business segments in 2Q, boosting earnings outlook. ONGC: Our REDUCE recommendation on ONGC with a price target of INR 78 is premised on (1) muted crude oil and gas realisations and (2) lack of production growth for oil. Despite production cuts from OPEC and non-OPEC countries, we expect oil prices to remain at USD 36/41 per barrel in FY21/22E vs. USD 63/bbl in FY20, given the weak global macros. Lower oil and gas realisations will drag down profitability for ONGC. In 1QFY21, revenue was ~8% below our expectations owing to a lower-than-anticipated crude oil price realisation of USD 28.7/bbl (vs est. USD 31.7/bbl). EBITDA was ~15% above our expectations due to lower-than-anticipated operating expenses and employee costs. However, APAT fell by ~36%, courtesy substantially lower-than-anticipated other income. Jubilant FoodWorks: Jubilant FoodWorks (Jubilant) clocked weak show amidst COVID led lockdown. Revenue declined by 60% YoY with negative SSG of 61% YoY (HSIE -54%)....

Delivery and Takeaway leading the recovery in an uncertain environment Jubilant Foodworks' (JUBI) 1QFY21 standalone topline declined by 59.5% YoY to Rs3.8bn as against our estimate of a 49.1% YoY decline to Rs4.8bn. SSSG declined by 61.4% YoY versus our est. of a 55% YoY decline. EBITDA declined by 89% YoY to Rs241mn (est. 95.4% YoY decline to Rs101mn). Loss at PBT level stood at Rs959mn vs our estimate of Rs982mn loss. There was a deferred tax credit of Rs233mn, which meant that reported loss came in at Rs726mn (vs est. loss of Rs982mn). Gross margin expanded by 260bps YoY to 78% (vs est. 74.1%), led by pullback of discounting (JUBI has reintroduced discounts in the 2QFY21), favourable input costs and introduction of delivery charges of Rs20 at the...

Though the lock down impacted performance significantly during Q1, the company was able to recover 69.8/84.6% of the sales during July/August'20. We believe that the delivery business would gain higher traction compared to dine in in the near term. The company has introduced delivery charges which is likely to mitigate impact of increased discounts and help improve margins. JFL would close down 105 Domino stores which are not profitable...

2 September 2020 Jubilant FoodWorks (JUBI)s 1QFY21 results were weaker than expected, especially in terms of operating margins. Depreciation and interest costs were also higher than anticipated. Three events underpin higher growth and profitability for JUBI beyond the (2) the introduction of delivery charge; and (3) opportunity created by the crisis to close down 105 of its least profitable (and dine-in dependent) stores. This would lead to all-time high EBITDA margins in FY22, resulting in 33% upward revision in our EPS projections for FY22. Maintain Like-for-like (LFL) growth stood at -61.5% (this refers to YoY growth in sales for non-split restaurants opened before the previous FY). LFL growth, excluding the restaurants temporarily closed due to COVID-19, stood at - 47.3%. 24 new Dominos Pizza stores were launched (net addition of 19 stores) and four stores for Dunkin Donuts were closed down in 1QFY21. Gross margins were up by 260bp YoY to 78%.

We are cutting FY21 estimates by 23% but increase FY22 and FY23 EPS by 15.2% and 25.2% and assign Hold rating to the stock. Dominos is on a path of recovery and is likely to emerge stronger from Covid 19 scenario given that 1) Sharp recovery in delivery and takeaway in July and August (110% and...

In its Annual report FY20, Jubilant Foods (JFL) continues to emphasize its 5-pillar growth strategy 1) fortress Domino's in India, 2) elevate customer experience 3) sustained technology investments 4) build portfolio of brands 5) focus on international. With a robust business model, efficient supply chain, large network, strong reputation for quality, hygiene and...

Given near-term challenges amidst COVID-19 situation, we cut our estimates and downgrade our rating on the stock to a ACCUMULATE, with a revised target price of Rs. 1,903 based on 55x FY22E adj. EPS. Nation-wide lockdown impacts operations JFL reported muted growth in revenue of 3.8% YoY to Rs. 898cr for Q4FY20, mainly impacted by nation-wide lockdown since March amidst COVID-19 pandemic. Company witnessed strong revenue growth during the first two months with LFL/SSG growth at 8.4%/7.2% in Jan and 14.9%/13.1% in Feb. However, LFL/SSG growth fell sharply in...

However, high impact on OOH consumption will have several challenges for growth (co is also returning to muted store expansion in FY21). We believe even in such challenging time, JUBI will be able to cut cost sharply to sustain margin (overhead cost is 55% of sales). However, we cut EPS estimate by 5% for FY21/FY22 (43/22% cut in our FMCG thematic in April) to factor-in consistent extension of lockdown, weaker consumption sentiments and slower store expansion in FY21/FY22. We value JUBI at 40x on Mar-22E EPS, deriving a TP of Rs 1,420. With unattractive risk-reward at current price, we downgrade JUBI to REDUCE. Jubilant was on course to returning to double digit SSG (7/13% SSG in Jan/Feb) after mid-single digit clocked in the previous four quarters. It justified our thesis on Dominos SSG recovery even when street was factoring aggregator pressure. Covid impacted OOH consumption sharply, thereby, Dominos March SSG saw sharp dip of 28% yoy. QSR will be among the most impacted categories in FY21 (stated in our FMCG thematic report) as dine-in pressure will be immense. We continue to believe that Jubilant is one of the strongest QSR players (superior store economics, healthy FCFs, strong balance sheet) and will be able to gain market share.

Short term pain prompts earnings cut; Limited upside; Downgrade to Accumulate Jubilant Foodworks' (JUBI) 4QFY20 standalone topline grew by 3.8% YoY to Rs9bn (est. 5% growth to Rs9.1bn). The quarter started on a healthy note with Jan and Feb months seeing 7.2% and 13.1% SSSG, respectively but sharp drop in revenue in March (SSSG declined 28.4%) because of the national lockdown (due to COVID-19 pandemic) which affected the overall quarter's performance, leading to SSS declining by 3.4% YoY for the quarter (est. 3%). Like-for-like growth (LFL) declined by 2.3% for the quarter. Gross margin contracted 160bps YoY to 74.4% due to continuous inflation in cheese. Reported EBITDA margin came in at 18.9%, up 180bps YoY (est. 21.1%) while underlying margin (w/o IND AS 116)...

Jubilant Foodworks (JUBI) has reported below expected result for Q4FY20. Revenue came in line with our estimates but higher expenses and exceptional losses led to negative surprise on PAT. During first two months of the quarter, JUBI reported strong recovery in SSSG. However, in the month of March (only 10 days lock-down), decline in SSSG has been steep. JUBI has now opened 70% of their stores and aims to open other 30% by the mid June'20. Positively, JUBI is likely to soon launch Zero Contact Takeaways which is likely to offset business lost in dine-in (this earlier contributed 3540% of revenue). Also, due to COVID19 QSRs which are based on open-kitchen concept will gain market share from un-unorganized restaurants as customers will give more...

20 May 2020 While 4QFY20 sales were in line with expectations, EBITDA and PAT were significantly below expectations. Extended lockdown, the economic implications of COVID-19 on discretionary consumption, a minimum wage increase, and 30% of sales generated from dine-ins were major concerns that more than offset market share gains in other restaurants and aggregators. Downgrade to year growth in sales of non-split restaurants opened before the previous financial year) stood at -2.3%. This led to EBITDA margin expansion of 180bp to 18.9%. EBITDA for 4QFY20 (without the impact of Ind-AS 116) declined 59.8% YoY to INR593m, with the EBITDA margin at 6.6%. The company reported an exceptional item of INR323m pertaining to a) provision for diminution in the value of the investment of INR200m in the Sri Lankan subsidiary and (b) COVID-19-led expenses of INR123m.

We recommend a SELL on JUBILANT FOODWORKS with a Target Price of Rs 1,408 a downside of 7% from CMP of Rs 1,515 and Stop Loss Rs 1,568.

We are cutting FY21 and FY22 EPS estimates of JUBI by 43.3% and 22.1% and Change in Estimates | Target | Reco We believe that COVID 19 will result in 1) loss of sales of IPL season in 1Q21...

With revenue growth driven by new store opening and improvements in margins, we upgrade our rating on the stock to a BUY, with a roll forward target price of Rs. 2,228 based on 50x FY22E adj. EPS. Revenues rises with net additions in stores Jubilant FoodWorks reported revenue growth of 14.1% YoY (+7.2% QoQ) to Rs. 1,060cr for Q3FY20 mainly driven by growth in online sales, launch of new product line of Masala Pizza flavors, and addition of 47 new stores (44 Dominos's Pizza, 2 Dunkin' Donuts and 1 Hong's Kitchen). The performance was aided by On-line...

We foresee enough levers of growth in Domino's like (a) Splitting urban stores (margin accretive), (b) Menu expansion (pizza variants and in-house beverages), (c) Shorter delivery time (20min live in few stores), (d) Reimaging stores to combat slowdown in dine-in and (e) Loyalty program (winning strategy in Domino's US). Additionally, JFL is aspiring to grow non-linearly driven by its investments in technology, core team and creating more brands under JFL umbrella. JFL reported healthy SSG of 6% (7.2% like-like) amid an environment marred with weak demand. Sequential improvement in SSG despite disturbance in several markets due to protest is encouraging (4.9% in 2QFY20). Steep dairy inflation impacted gross margin, it can sustain in 4Q also. Co has opened a record 42 net additions in Dominos stores in 3Q (highest in 22 quarters). JFL plans to maintain high store opening in the coming quarters. Thereby, JFL is entering into a high revenue growth phase (healthy SSG along with higher share of new stores). Despite the recent run-up in the stock, JFL still holds potential of delivering healthy upside. We value JFL at 46x P/E at Dec-21E EPS, our TP is at Rs 2,175. Reiterate BUY.

Jubilant Foodworks (JUBI) has reported in line result for 3QFY20. Revenue growth was driven by strong SSSG, aggressive retail expansion and launch of new product range in pizza category. Gross and EBITDA margin was impacted due to raw material cost inflation (especially cheese prices) and higher other expense led by increase in marketing spends to support the new-product-launch. Management maintains moderate outlook on raw material cost inflation going forward especially in vegetables category. After 5 quarter of lull, JUBI has added 2 kiosk-format Dunkin stores (3-4x smaller than regular size stores) to pilot the format. Also, added 2nd Hongs Kitchen in...

Further pick-up in store expansion; Limited upside; Downgrade to Accumulate Jubilant Foodworks' (JUBI) 3QFY20 standalone topline grew by 14.1% YoY to Rs10.6bn (est. 14% growth to Rs10.6bn), led by SSSG of 5.9% YoY (est. 7%) on a base of 14.6%. This is the 11th consecutive quarter of positive SSSG. Like-for-like growth (LFL) stood at 7.2% for the quarter on a base of 15.2%. The company launched Masala Pizza during the quarter, which helped drive sales during the quarter. Gross margin was down 60bps YoY at 74.9%. EBITDA margin came in at 23.9%, expanding by 560bps YoY (est. 25.4%) while underlying margin (w/o IND AS 116) was down 180bps to 16.5%. EBITDA grew by 48.6% to Rs2.5bn (est. 57.5% growth to Rs2.7bn). Adj....

29 January 2020 JUBIs 3QFY20 sales were in line with SSS growth at 5.9% YoY (v/s est. The company has done well to report mid-single digit SSS growth in the past 4 quarters despite very high base of 15-26% SSS growth, competition from aggregators and slowdown in dine-in. Healthy demand environment, favorable base of 4-6% SSSG in the next 4 quarters and incrementally benign outlook on operating costs augur well for >25% earnings growth over the next two years, supporting our rating. JUBI reported 14.1% sales growth YoY to INR10.6b (v/s est. SSS growth was 5.9% YoY (v/s est. 6%); like-to-like growth (i.e. sales growth of stores that were not split since 1 Apr18) stood at 7.