MOSL: JUBILANT FOODWORKS (Buy)-Result better than expected, immense growth opportunity
JUBILANT FOODWORKS: Result better than expected, immense growth opportunity
(JUBI IN, Mkt Cap USD7b, CMP INR3965, TP INR4870, 23% Upside, Buy)
- JUBI reported a beat on all fronts in its 2QFY22 result. Both store expansion and SSSG were ahead of our estimates. Earnings in 2QFY22 were strong, despite the recovery in dine-in still ~47% of pre-COVID levels.
- With the lifting of lockdown restrictions, dine-in levels are picking up significantly compared to the early part of 2QFY22. Delivery is sustaining at much higher than pre-COVID levels.
- JUBI has the best business model in the QSR space to take advantage of the enhanced growth opportunity after the lifting of COVID-related restrictions. Its technological and logistical moats are also being strengthened further. We maintain our Buy rating.
Strong performance with a beat on all fronts
- Sales grew 36.6% YoY to INR11b (est. INR10.3b), with SSSG of 26.3% YoY (est. 21%).
- Like-for-Like (LFL) growth (refers to the year-over-year growth in sales for non-split Restaurants opened in the previous fiscal) stood at 29.4%.
- JUBI opened 55 new Domino's Pizza stores and closed nil stores, leading to 1,435 stores at the end of 2QFY22. It added a net one store of Dunkin' Donuts, taking its total store count to 28. It added three Restaurants of Hong's Kitchen and Ekdum! (biryani), taking its total count to 21.
- Gross margin fell 50bp YoY to 78.2%.
- EBITDA grew 33.2% YoY to INR2.9b (est. INR2.6b).
- EBITDA margin declined by 70bp YoY to 26% (est. 25%).
- Adjusted PAT grew 59.6% YoY to INR1.2b (est. INR986m).
Jubilant FoodWorks Limited is a food service company. The Company operates through Food and Beverages segment. The Company and its subsidiary have rights to develop and operate Domino's Pizza brand in India, Sri Lanka, Bangladesh and Nepal. It operates in India and Sri Lanka. It has a right for developing and operating Dunkin' Donuts restaurants for India. Domino's Pizza India operates approximately 1040 restaurants in India located in states and union territories, covering approximately 240 cities across the country. Dunkin' Donuts sells a range of donuts and over a dozen coffee beverages, as well as an array of bagels, breakfast sandwiches and other baked goods. The Company has approximately 70 Dunkin' Donuts restaurants in India. It offers Chocolate Donut, Break-up Party Eclair, Chocofix Donuts, Big Joy Burger, Naughty Lucy Burger, The Tough Guy Burger, Too Much Burgers range, Wicked Wraps, the iconic Dunkin' Original Drip Coffee, Dunkaccinos and Spiked Iced Tea, among others.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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