Jubilant Foodworks - Q4FY13 Result Update - Nirmal Bang

- The company posted poor result compared to the street expectation with same store sales growth of 7.7% against 16% in Q3FY13.

- Net Sales was up by 29.3% YoY to Rs. 365.8 crs and declined by 5% QoQ.

- While overall revenues witnessed healthy growth YoY, sales during the quarter reflect the impact of economic factors, constraining consumer spend leading to lower than anticipated rate of customer additions, which in turn impacts SSS (same store sales) growth. JFL registered SSS growth of 7.7% in Q4FY13 as against 26.3% in Q4FY12 and 16.1% in Q3FY13. For FY13, SSS was 16.2% as against 29.6% in FY12.

- EBITDA was up by 16.6% YoY to Rs. 61.2 crs and down by 8.8% QoQ. The operating margin was 16.7% in Q4FY13, 18.6% in Q4FY12 and was 17.4% in Q3FY13. The margin was down due to steep increase in raw-material cost and rent cost as % of sales.

- The Gross margin fell by 70bps to 73.9% YoY in Q4FY13 as against 74.6% in Q4FY12 and by 40bps QoQ of 74.3% in Q3FY13.

- The Adj. PAT was up by 18% YoY to Rs. 32.7 crs and was down by 13.2% QoQ. The PAT margin was 8.9% in Q4FY13 as against 9.8% in Q4FY12 and Q3FY13.

- The stock is currently trading at 53x on FY13 basis. The management has guided for same store sales of 10% in Fy14 with decline in ebitda margins. With the slow Same Store Sales growth and deterioration in volume growth plus increase in operational expenditure of Dunkin Donuts posses risks to earnings growth does not justify such premium valuation. The stock may remain under pressure and we advise investors to Sell the stock.

Source : Equity Bulls

Keywords