Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Maintain SELL on Jubilant FoodWorks - No big fireworks unlike in other discretionary names - HDFC Securities

Posted On: 2021-10-23 09:08:14 (Time Zone: IST)


Jubilant posted a revenue growth of 37% YoY (HSIE 34%, +5.5% two-year CAGR). SSG was at +26% (-20% in Q2FY21, HSIE +26%), two-year CAGR at +0.5%, despite price hike and delivery charges (implying volume contraction). System recovery was at 112% vs. 82% in Q2FY21 and 94% in Q1FY22, reflecting less impact of the second wave of COVID. Dine-in is at 82%, having seen recovery from 37% in Q1FY22, 54% in Q2FY21. GM was down 54bps, resulting in 66bps YoY dip in EBITDA margin to 26% (HSIE 24.4%). The company is committed to aggressive store expansion across brands. Investments in technology and digital marketing will further empower their brands and operations. Jubilant is a strong franchise among QSR peers, and its success in new initiatives and capital allocation will remain the key monitorables for the stock. We maintain our EPS estimates. Despite giving our best assumption and valuation to all the new brands/initiatives (India and international), the best value comes to INR 300/share. Our target price on Jubilant is INR 3,300, based on 60x P/E on Sep-23E EPS for Domino's India and INR 300/share for ex-Domino's India business. With no big surprises in earnings (unlike for other discretionary companies), we believe a large part of the recovery is priced in (trading at 88x/73x P/E on FY23/24). Maintain SELL.

Robust revenue recovery: Net revenue was up 37% YoY (-18% in Q2FY21, +131% in Q1FY22, 34% HSIE). SSG came in line at +26.3% YoY (-20% in Q2FY21, +114% in Q1FY22) while like-to-like growth was +29.4% YoY. OLO contribution to delivery stood at 97.8% while app downloads stood at 7.2mn. Domino's own delivery grew faster than the deliveries by aggregators.

Store expansion spree continued: Jubilant opened 55 Domino's stores during Q2FY22 (75 in H1FY22) along with 1 Dunkin' store and 3 Hong's Kitchen stores. The company maintains its domestic store expansion target of 150-175 stores in FY22; however, it intends to push towards the upper limit. The company is on track to launch Popeye's by the end of FY22.

Raw material headwinds continue: GM contracted by 54bps YoY to 78.2% (+351bps in Q2FY21 and -80bps in Q1FY22). Rent expenses are normalising as concessions are reducing. Employee expenses were up 15% YoY. EBITDA margin was at 26% vs. 26.7% in Q2FY21 and 24% in Q1FY22 (24.4% HSIE). EBITDA grew 33% YoY.

Call takeaways: (1) Dine-in channel showed positive trends through Q2FY22; however, it is still below the pre-COVID level. (2) As revenue growth is back and things normalise, leverage will kick in; however, inflationary headwinds would remain. (3) Domestic store expansion target remains 150-175 stores in FY22; however, the company intends to push for the upper limit. (4) It is now entering tier-3/4 cities, where it is seeing encouraging response across all channels. (5) The company also plans to expand Hong's beyond the NCR region.

Shares of Jubilant Foodworks Limited was last trading in BSE at Rs. 3702.80 as compared to the previous close of Rs. 3867.30. The total number of shares traded during the day was 37043 in over 5379 trades.

The stock hit an intraday high of Rs. 3929.00 and intraday low of 3679.35. The net turnover during the day was Rs. 139669463.00.


Click here to send ur comments or to feedback@equitybulls.com

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Mutual Fund Review - November, 2021 - ICICI Direct

Maintain SELL on Asian Paints - Demand rebound strong; profitability cut steeper - HDFC Securities

Mphasis - 2QFY22 Result Update - Growth Resiliency Continues; Raise Target Price - Reliance Research

Gateway Distriparks - Rail continues to drive earnings - ICICI Securities

JSW Steel - Start of EBITDA contraction cycle - ICICI Securities

Shoppers Stop - Beneficiary of faster than expected recovery - ICICI Securities

Asian Paints - Q2FY22 Result Update - ICICI Securities

TVS Motor Company - EVs now at the center of its global ambitions - ICICI Securities

Havells India - Strong demand across regions; profitability likely to be muted in H2FY22 - ICICI Securities

Tata Communications - Rising visibility on revenue growth - ICICI Securities

Angel Broking - Business momentum intact for strong earnings growth - ICICI Securities

Q2FY22 Result Update - Rallis India - ICICI Direct

Q2FY22 Result Update - Navin Fluorine - ICICI Direct

Q2FY22 Result Update - Shoppers Stop - ICICI Direct

Company Update - Mastek Ltd - ICICI Direct

Q2FY22 Result Update - JSW Steel - ICICI Direct

Q2FY22 Result Update - VST Industries - ICICI Direct

HDFC Life Insurance - Q2FY22 First Cut - ICICI Direct

Federal Bank - Q2FY22 First Cut - ICICI Direct

Company Update - Taj GVK Hotels - ICICI Direct

Q2FY22 Result Update - Indian Hotels - ICICI Direct

Inox Leisure - Q2FY22 First Cut - ICICI Direct

Supreme Industries - Q2FY22 First Cut - ICICI Direct

Q2FY22 Result Update - Biocon Ltd - ICICI Direct

PVR Ltd - Q2FY22 First Cut - ICICI Direct

Q2FY22 Result Update - Asian Paints - ICICI Direct

Quant Pick - RBL Bank - ICICI Direct

Q2FY22 Result Update - IIFL Securities - ICICI Direct

Q2FY22 Company Update - Bank of Baroda - ICICI Direct

Q2FY22 Result Update - Syngene International - ICICI Direct

Company Update - Sonata Software - ICICI Direct

Q2FY22 Result Update - Gateway Distriparks - ICICI Direct

Q2FY22 Result Update - Tata Communications - ICICI Direct

Q2FY22 Result Update - Havells India - ICICI Direct

Mphasis - 2QFY22 Result Update - Growth Resiliency Continues; Raise Target Price - Reliance Research

Maintain ADD on Havells India - Outperformance continues; miss on margin - HDFC Securities

Indraprastha Gas - Company Update - EV vs CNG; TCO Economics Favour CNG - Reliance Research

FinTech Playbook - Discount Brokers - 'Nudging' the long tail of standalone brokers - HDFC Securities

Tata Communication - Revenue growth remains muted - YES Securities

Havells India Ltd - Q2FY22 Result Update - YES Securities

ICICI Lombard General Insurance - Q2FY22 Result Update - YES Securities

Syngene International Ltd - Lack of near term triggers - YES Securities

Mphasis - Q2FY22 First Cut - YES Securities

IndiaMART InterMESH - Q2FY22 First Cut - YES Securities

Sterlite Technologies - Q2FY22 First Cut - YES Securities

Can Fin Homes - Q2FY22 First Cut - YES Securities

Havells India - 2QFY22 Result Update - Strong Revenue Growth; Higher Commodity Prices Impact Earnings - Reliance Research

TVS Motor - 2QFY22 Result Update - Healthy Exports Coupled with New Launches to Aid Higher Margins - Reliance Research

Sonata Software - Strong execution - HDFC Securities

Navin Fluorine International - Muted performance - HDFC Securities


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020