Jubilant FoodWorks surges 9%, hits record high on strong growth outlook

With vaccinations well under way, the management believes that the worst is behind them and is confident of delivering strong, sustained growth in the periods ahead

Shares of Jubilant FoodWorks (JFL) hit a new record high of Rs 3,348 as they surged 9 per cent on the BSE in intra-day trade on Thursday on a strong growth outlook. The stock of the country’s largest foodservice company surpassed its previous high of Rs 3,331.85 touched on June 16, 2021.

Its Domino’s Pizza franchise extends across a network of 1,380 restaurants in 298 cities. The company has exclusive rights to develop and operate Domino’s Pizza brand in India, Sri Lanka, Bangladesh and Nepal. It also enjoys exclusive rights to develop and operate Dunkin’ Donuts restaurants in India. JFL has ventured into the Chinese cuisine segment with its first owned restaurant brand ‘Hong’s Kitchen’.

For the April-June quarter (Q1FY21), JFL reported a consolidated net profit of Rs 69.06 crore in the first quarter ended June 30, aided by higher revenues despite the second wave of Covid-19 disrupting operations. It had posted a consolidated net loss of Rs 74.47 crore in the same quarter last fiscal.

Its revenue from operations in the first quarter stood at Rs 893.19 crore as compared to Rs 388.41 crore in the corresponding period last year when operations were also disrupted by the outbreak of the pandemic. “This was driven by Domino’s Like-for-like (LFL) sales growth of 120.4 per cent and Same-Store Growth (SSG) of 114.2 per cent. The growth in Delivery channel, which grew by 123.7 per cent, mitigated the impact on account of Dine-in channel being shut for a long time and mobility restrictions impacting the takeaway channel,” the management said. With vaccinations well underway, we believe that the worst is behind us and we are confident of delivering strong, sustained growth in the periods ahead, the management said.

Ebitda (earnings before interest, taxes, depreciation, and amortization) margins remained unchanged at 24.1 per cent in Q1FY22 against 24.3 per cent in Q4FY21.

Brokerage Motilal Oswal Financial Services believes QSRs (quick service restaurant) are in a sweet spot for rapid growth over the next 5–10 years in India and offer scope for a 25–30 per cent operating profit CAGR for several players, with Domino’s as the most efficient among them. "Given the structural opportunities in the QSR space and Jubilant's dominant positioning with proven and profitable model, we expect JFL to be the key beneficiary of favourable trends (shift towards branded players)," the brokerage firm said in a result update.