Jubilant FoodWorks (JUBI), the operator of quick-service restaurants (QSR), reported a net profit of Rs 630 million for the first quarter ended June (Q1FY22), as compared to a net loss of Rs 740 million reported during the corresponding period in FY21.
Revenue from operations in the Q1 FY22, stood at Rs 8,790 million, a growth of over 131% over the same period last year. In the corresponding quarter of the previous fiscal, the company had reported Rs 3,880 million revenue from operations.
Following are the broking firms views on Jubilant Footworks Q1 earnings:
Motilal Oswal Institutional Equities:
"With the QSR business in India being at an inflexion point, JUBI has (a) increased its store expansion guidance, (b) announced investments to boost supply chain, and (c) showed intent to gradually become a food tech company. On the technology front, JUBI is significantly expanding its teams for customer experience, analytics and product innovation.
These welcome initiatives strengthen JUBI’s right-to-win in the rapidly expanding QSR market where post-pandemic structural opportunity has been significantly enhanced.
JUBI is already the most efficient player in the QSR industry with best-of-breed profitability and balance sheet metrics.
With its proven and profitable model, we expect JUBI to be the key beneficiary of favorable trends. We upgrade the rating to Buy with TP of Rs 3,630 (60xSep’23 EPS)."
IDBI Capital:
"Jubilant Foodworks has reported above expected result for 1QFY22. Best in class execution and Zero-Contact branding has helped JUBI to report outperformance in delivery channel. Business recovery in takeaway channel was impacted during May’21 but Apr’21 and Jun'21 reported strong recovery.
Positively, business recovery in Hong’s Kitchen and EkDum reached at pre-covid levels. JUBI has taken marginal price hike to offset inflationary pressure. Also, there has been increase in promotional activities due competition from food-tech apps. However, gross margin remains intact at 77-78%. Also, JUBI has taken c. 9% hike in delivery charges to address inflation; benefit is likely to flow from 2QFY22 onwards.
Management has guided for 150-175 store addition during FY22E. Accordingly, we have marginally revised our EPS estimates upwards by c.3-4% during FY22-23E. Our revised TP stands at Rs 3,123 with Hold rating."
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