Jubilant Foodworks Ltd. share price target

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.

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%.