MOSL: JUBILANT FOODWORKS (Downgrade to Sell)-Poor results, weak outlook
​Jubilant Foodworks: Poor results, weak outlook; Downgrading to Sell
(JUBI IN, Mkt Cap USD0.9b, CMP INR939, TP INR680, 27% Downside, Sell)
- Results well below expectations: For 4QFY17, net sales declined by 0.9% YoY (est. of +8.3%) to INR6.1b, EBITDA by 15.1% YoY (est. of -9.2%) to INR605m and adj. PAT by 46.3% YoY (est. of -26%) to INR149m. SSS fell 7.5% (est. of +2%).
- On a consolidated basis, full-year FY17 sales rose 6% (lowest in over a decade), while EBITDA declined 8.6% to INR2.4b. Adj. PAT fell 31.9% to INR660m, lowest annual PAT since FY10. RoEs fell over this period from ~30% to 8.2% in FY17.
- Gross margin expanded 40bp YoY to 76.9% (est. of -190bp) in 4QFY17. Staff costs fell 40bp YoY, while other expenses were up 240bp (rent cost not shared separately). EBITDA margin contracted 170bp YoY (est. of -190bp) to 9.9%.
- Concall highlights: (1) FY17: 2% effective price increase. No price increase planned for FY18 as of now. (2) Expansion target of 40-50 new Domino’s stores and five Dunkin stores for FY18, compared to over 100 earlier.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.