Jubilant Foodworks Ltd. share price target

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...

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.

We initiate coverage on Jubilant Foodworks (JUBI) with a BUY rating and target price of Rs 1,836 based on 40X FY22E EPS. We have done survey of 5k brands/restaurants (both online and offline) in the top 16 cities (represents 65% of Dominos revenue in India) and note that; (i) optically, cloud kitchen retailers are posing competitive threat to JUBI by expanding aggressively in cities where Dominos has maximum presence (ii) in reality, JUBI outperforms competition at menu level (product, price and variety) (iii) benefit of economy-of-scale and control over entire value chain enables JUBI to remain anti-fragile to competition. Foray into Chinese cuisine with high focus on value...

Jubilant FoodWorks reported robust revenue growth of 12.1% YoY (5.1% QoQ) for Q2 FY20, despite a challenging demand environment and high inflationary pressure. The performance was aided by staunch On-line Ordering (OLO), contributing 85% to delivery sales, while there was continued pressure on dine-in sales. Amongst various delivery aggregators in the market, mobile ordering sales was 93% of overall OLO, up 400bps QoQ. The company reported an improved EBITDA margin of 23.8% (+50bps QoQ), as a result of its innovation driven approach, superior customer experience, and a better operating leverage. To overcome the inflationary commodity prices, especially...

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 a quarter marked with several positives (healthy SSG, 15 qtr high store expansion, robust app downloads and GM expansion). 2QFY20 SSG beat the street and our expectations despite slowdown in consumption, flooding and heavy base (21% SSG base). We believe earnings upcycle will begin from 3QFY20 onwards which will re-rate the stock. We upgrade our EPS estimates by 1-3% and revise our TP to Rs 2,134 (earlier 2,092). JFL remains our top pick in the consumer space. Reiterate BUY.

We expect revenue to grow by 13.4%/13.5% YoY in FY20E/FY21E. We estimate LTL EBITDA margin to compress by 67bps/87bps YoY to 16.5%/15.7% for FY20/21E mainly due to higher employee cost inflation and lower operating leverage. LTL EBITDA growth rate is likely to remain in high single digit mainly led by moderation in growth rates going ahead. Incorporating the improved profitability and turnaround time for stores along with the improvement in ROE due to tax cuts, we revise our PE multiple valuation to 40x (vs. 37x earlier). Our revised target price of Rs1,340...

22 October 2019 to INR9.9b (in-line), with growth of stores that were not split since 1 Apr18) stood at 6.5% YoY. EBITDA by one-off provision of INR125m. underlying EBITDA was up 9.7% to INR1.6b with the margin at 16.4%. and EBITDA margin by 700bp YoY to 23.8%. Underlying EBITDA margin contracted 30bp YoY to 16.4%. (1) Continued pressure in dine-in sales was offset by delivery buoyancy. (2) The impact from cloud kitchen has not been material in the 26 cities where this model is present. (3) It opened 40 new stores the highest in 15 quarters.