Jubilant Foodworks Ltd. share price target

Our channel checks indicate that Jubilant FoodWorks (JUBI) is working on a faster pizza delivery guarantee option (in 20 mins vs. 30 mins currently), which in our view, should aid customer acquisition from other QSRs and aggregators. We believe that this faster delivery option should further enhance its competitiveness and sustain strong SSSG trends Faster delivery guarantee (of 15 mins and 20 mins) launched by Domino's in Australia and...

We reiterate our 18-month old BUY (we had upgraded JUBI when the stock was at Rs 636) with a revised TP of Rs 1,750 (earlier Rs 1,620) valuing JFL at 46x Mar-21 EPS. We recently hosted an investor roadshow with Pratik Pota (CEO) and Prakash Bisht (CFO) of Jubilant FoodWorks (JFL). The timing was opportune, given the investor concerns around (1) Potential plateauing after a strong recovery, (2) Rising threat from food aggregators to Dominos, (3) Breakeven, but little else understood on Dunkin Donuts, (4) Curiosity around the the Chinese QSR foray, (5) An embarrassing u-turn by the JFL Board on the recently hatched Jubilant brand royalty idea.

We value JFL at 46x P/E on Dec-20EPS with TP of Rs 1,620 (earlier Rs 1,610). We maintain BUY. Jubilant FoodWorks (JFL) reported 5th consecutive quarter of beat in SSG. The co. delivered 17/15% revenue/SSG growth (exp. 15/13%) despite a heavy base (21/18%). Benign food inflation, richer mix and new contract with PepsiCo drove GM expansion. EBITDA/APAT grew by 25/46% (exp. 16/20%).

We are increasing FY19, FY20 and FY21 EPS by 6.7/5.0/1.8% on the back of sustained momentum in SSG and higher Dominos store openings (90). We believe JUBI will sustain growth momentum led by 1) sustained consumer traction with Everyday value offer 2) Breakeven in Dunkin Donuts 3) ReLaunch of the new user friendly Domino's pizza app (73% OLO share) and 4) increase in traction in small towns and region wise customization in menu. We expect some softening in growth rates due to high SSG base, lower store additions in FY18 and increased competition from third part aggregators like Zomato and Swiggy. Dunkin Donuts has broken even in 3Q and we expect...

We value it at 46x P/E on Sep-20EPS with TP of Rs 1,555 (earlier Rs 1557). We maintain BUY. Jubilant FoodWorks (JFL) reported another solid quarter with revenue growth of 21% (exp. of 18%) led by SSG of 20.5% (5.5% in 2QFY18 and 26% in 1QFY19) vs. exp. of 17%. Robust growth in online ordering coupled with value offers & product upgrade continued to drive SSG. The franchise enjoys high operating leverage resulting in EBITDA margin expansion of 268bps YoY to 16.7% (exp. 16.2%).

JFL's Q2FY19 results were in line with our estimate with strong 20.5% Same Store Sales (SSSG) performance. The company continues to post strong margin performance for the fourth consecutive quarter, exhibited striking operating performance with 270bps margin expansion to 16.7%. Continuing momentum in core pizza due to product upgrade and Everyday Value Offer'(EDV) is driving growth. GST has been a boon for the company to increase profitability. Going ahead, we believe that the company would post high single digit SSSG as the base would become unfavorable hereon....

24 October 2018 in 2QFY19, with SSS growth of 20.5% YoY the total store count to 1,167. EBITDA grew 44.4% YoY to INR1.5b (in-line). PAT grew 23.5%/59.3%/110.7% YoY in 1HFY19. EBITDA margin expanded 370bp YoY to 16.7%.

JFL reported robust growth of 26% YoY in top line in Q1FY19, driven by higher than anticipated SSG which grew at a staggering pace of 25.9% YoY (6.5% SSG in Q1FY18). Superior product, continued strong response to Everyday value offer coupled with aggressive marketing (IPL T20) drove SSG higher in the quarter. Further, online sales remained strong with share of online orders (OLO) increasing to 65% of the delivery sales as against 51% in Q1FY18. JFL is also working towards increasing the funnel of new locations and has doubled the number of store openings as compared to the last quarter, adding 13 new Domino's stores (closed 3 stores) taking the total store count to...

Revenue increased by 9.65% to Rs. 855.06 Cr in Q1FY19 when compared to the previous quarter. Jubilant Foodworks Ltd Q1FY19 results Comment

We value it at 46x P/E on Jun-20EPS to arrive TP of Rs 1,562 (earlier Rs 1510). We maintain BUY. Jubilant FoodWorks (JFL) reported another blowout quarter with revenue growth of 26% to Rs 8.55bn (exp. of 20%) led by SSG of 26% (6.5% in 1QFY18) vs. expectation of 18%. JFLs IPL activations (higher ad spend) with EDV offer aided in driving volume led growth. The franchise enjoys high operating leverage resulting in EBITDA margin expansion of 489bps YoY to 16.6% (exp. 15.5%). EBITDA/APAT growth was stellar at 79/151% (exp. 59/99%).