Jubilant Foodworks Ltd. share price target

However, we now believe that JUBI will be among the key beneficiaries of the cut in corporate tax to 25.2%, as it adds around 13% to its PAT. On the third factor, the corporate tax cuts provide an opportunity to JUBI to offer discounts and promotions and thus eat into the share of unorganized players. It can spend a significant part of the INR450-500m incremental PAT on promotions/price offs in an attempt to gain market share. Four points are competitors would have such windfall gains, and if they choose to match JUBIs efforts on promotions and price offs, they would end up bleeding further. corporate tax cuts offer multi-year benefits to JUBI, providing it with incremental benefit every year until competitors scale up well. Aggression in terms of price cuts/promotional spends if judicial will also drive faster conversion of customers from other restaurant businesses to Dominos.

We reiterate our HOLD rating on the stock with a revised target price of Rs 1,240 based on 40x FY21E adj. EPS. Revenue growth supported by SSG against strong Q1 last year JFL registered strong growth in revenue of 9.9% YoY to Rs. 940cr (+8.7% QoQ), with improved customer demand amidst Cricket World Cup Season during the quarter. Company achieved SSG of 4.1% in Domino's Pizza, although the growth has slowed down from the double digit growth of 25.9% recorded in Q1FY19 mainly due to the company's splitting store strategy in order to tap the market and improve customer...

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 (20 min pilot underway), (d) Reimaging stores to combat slowdown in dine-in and (e) Loyalty program (winning strategy in Domino's US). We believe these benefits will begin to reflect from 2HFY20 at a time when base for SSG starts moderating. Recent stock correction provides a good entry point. JFL performance was weak owing to moderation in discretionary spend, a heavy base (26% SSG) and aggressive A&P; spends (>12% YoY). We cut our estimates by 3% to factor 1Q miss and moderation in 2Q SSG but maintain our estimates for 2HFY20 (supported by price hikes and recovery in macros). Near-term headwinds provide a great opportunity to buy. We value at 46x on Jun-21 EPS, arriving at a TP of Rs 1,778. Maintain BUY.

View: SSSG continues to moderate; Maintain Accumulate JFL's Q1FY20 results were below our estimate, with a 4.1% YoY same store sales growth (SSSG) vs our estimate of 5%. A high base of 25.9% YoY in SSSG restricted overall growth in Q1FY20. We believe JFL will likely post a high single digit SSSG in the ensuing quarters, as the base remains highly unfavorable. In addition, margins are likely to remain under pressure in the near term due to store additions, escalating RM prices, and rise in A&P; costs. We revise our FY20E and FY21E EPS estimates downwards to ` 25.5...

24 July 2019 were not split since 1 Apr18) stood at 5.8%. EBITDA grew 54.2% YoY to underlying EBITDA was up 3.6% YoY to INR1.5b, with the margin at 15.7%. Underlying PAT rose 9.2% YoY to INR815m. Underlying EBITDA margin shrank 100bp YoY to 15.7%. (1) JUBI took a low-single-digit price hike toward end- 1QFY20 to offset the impact of commodity (largely dairy) inflation. (2) Slowdown in dine-in continued in 1Q due to muted demand and a change ordering behavior (increasing shift to delivery).

We value at 46x on Mar-21 EPS, arriving at a TP of Rs 1,739. JFLs 4Q performance was mixed with modest SSG growth and healthy internals. We remain bullish on JFL, this quarter does not impair our long-term thesis. Instead, our confidence rises based on managements commentary on (a) Initiatives undertaken in technology, (b) Reimaging stores (design, self-ordering kiosks etc.) and (c) Beefing up Dominos menu with beverages (in-house brands).

Incremental earnings growth under pressure from a multitude of factors Sales increased 10.9% YoY to INR8.65b (our estimate: INR8.61b) in 4QFY19, with same-store sales (SSS) growth coming in at 6% YoY (our estimate: 8%) off a high base (+26.5% in the year-ago period). Total Domino's store count stood at 1,227, with net addition of 27 stores (opened 30, closed 3) in the quarter. EBITDA grew 15.5% YoY to INR1.5b (our estimate: INR1.5b). Adj. PAT was up 16.3% to INR792m (our estimate: INR791m). Gross margin expanded 180bp YoY to 76.1%. Higher other expenses (+70bp...

JFL's Q4FY19 results were below our estimate, with a 6% same store sales growth (SSSG) vs our estimate of ~10%. A high base of 26.5% SSSG restricted overall growth in the quarter. We believe JFL will likely post a high single digit to a low double digit SSSG in the ensuing quarters, as the base remains highly unfavorable. However, margins will remain high, as the negative impact of store additions will be mitigated by margin expansion in Dunkin. We have broadly maintained FY20E and FY21E EPS estimates to...

Jubilant Foodworks Limited is an Indian company based in Noida, Uttar Pradesh which holds the master franchise for Domino's Pizza in India

We model 18/11/10% SSG growth during FY19E/FY20E/FY21E. We value JFL at 46x on Mar-21 EPS, arriving at a TP of Rs 1,750. Reiterate BUY. JFL announced its entry in Chinese cuisine with a home grown brand Hongs Kitchen. It will be a fast casual Chinese restaurant with focus on dine-in and delivery. Chinese is the 2nd largest cuisine in India (after North India). The brand will address the vast gap between street vendors and fine dining. The first store (1,400 sq. ft) is launched in Eros Mall, Gurugram. JFL will initially look to expand stores in the NCR region.