Brokerages expect robust Q4 profit growth for Jubilant Food, margin likely to expand

D-Street expects Jubilant Foodworks to clock robust profit growth in its fourth quarter of FY19.

The company is expected to come out with its fourth-quarter earnings on May 15, 2019.

Kotak Institutional Equities expects Jubilant Foodworks to report net profit at Rs 83.8 crore up 23.1 percent YoY (-13.2 percent QoQ). This is also close to 25 percent rise in profit estimated in CNBC-TV18 Poll.

Kotak expects net sales to increase 16.7 percent YoY (-2.1 percent QoQ) to Rs 909.7 crore. It has modelled 19.5 percent YoY rise in EBITDA of the company at Rs 152.6 crore.

strategy by splitting the existing stores will result in a slowdown of SSG to lower double digits in the fourth quarter, it said. Sales are expected to grow 15 percent YoY to Rs 893 crore.

The research firm believes that strong operational control demonstrated by the company along with rising online orders would continue to help expand its EBITDA margin by 90bps to 17.3 percent.

According to a CNBC-TV18 Poll, Jubilant Foodworks' Q4 revenue is estimated to rise 13.5 percent to Rs 885 crore against Rs 779.8 crore in the corresponding quarter last year. EBITDA may increase 19 percent YoY to Rs 152 crore while margins are seen at 17.2 percent against 16.4 percent YoY.

Key things to watch out for:

-Impact on margin due to Dunkin’ Donuts operational performance and focus on Everyday Value Pizza

-Impact on gross margins due to the rise in cheese and wheat prices