MOSL: Jubilant Foodworks (Neutral) - Strong SSSG but no material recovery in demand
Jubilant Foodworks: Strong SSSG but no material recovery in demand; Maintain Neutral
(JUBI IN, Mkt Cap USD2.6b, CMP INR2560, TP INR2450, 4% Downside, Neutral)
- JUBI’s sales grew 27.3% YoY to INR7.8b (est. of INR7.5b), with SSS growth of 26.5% YoY (est. of +20%). With net seven stores added in 4QFY18, the total store count stood at 1,134 as of end-FY18.
- Gross margin contracted 260bp YoY to 74.3%, while EBITDA margin expanded 650bp YoY to 16.4%. EBITDA, thus, grew 111.1% YoY to INR1.3b (in-line), while adj. PAT increased 355.8% YoY to INR681m (est. of INR617m).
- FY18 performance: SSS growth stood at 13.9% YoY. Standalone net sales, EBITDA and adj. PAT increased 17.1%, 81% YoY and 173.5%, respectively.
- Balance sheet: Cash conversion cycle was at 33 days for FY18 (similar to FY17).
- Concall highlights: 1) Dunkin is expected to breakeven by 4QFY19. 2) Expected to add 75 stores in FY19.
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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