FMCG major Jubilant Foodworks, the parent company of Dominos Pizza and Dunkin Donuts announced an impressive set of results a few days ago.
It announced PAT of Rs 104 crores for the quarter and revenue from operations at Rs 1,025.9 crores. Revenue was up by 14.3 percent from the March quarter for last fiscal. Consolidated revenue for the fiscal was down by 15.3 percent to Rs 3,384 crores from Rs 3,996 crores previously, the company has delivered good results in a Covid marred period. The board recommended a dividend of Rs 6 per equity share for the financial year ending 31st March 2021.
Stocks of this company have traded well in the last five sessions. It rallied from Rs 3,186 on Monday to Rs 3,295 on Friday on the BSE.
Analyst calls have been revised, which could have been a cause for the movement. Jefferies (Buy, revised TP to Rs 3,700), ICICI Securities (TP to Rs 3,500) and HSBC (Buy, revised TP to Rs 3,550) are among the optimistic analysis on this stock.
Analysis from Emkay Global suggests JUBL made good recovery. Despite lockdowns, Apr-May'21 recovery at ~90% (vs. FY20) has been impressive, indicating strong traction in delivery. JUBI added 134 Dominos stores in FY21 (one-off 109 store closures) and expects expansion to be similar in FY22. "Gains from stronger digital/delivery capabilities, aggressive store expansion and new formats offer a stronger growth outlook. Hence, we raise the target multiple to 55x from 50x and roll over to Sep'23E EPS. Maintain Buy with a revised TP of Rs3,400 (Rs2,750 earlier)," said Emkay analysts.
Analysts at Motilal Oswal like the structural story in QSRs and believe is JUBI is best breed on most parameters. Their analysts have a neutral view on this stock. Valuations of 63x FY23E EPS are expensive," they add.
Analysts at Yes Securities too shared a neutral view while stating that it may have missed expectations slightly. "While the stock is trading at rich valuations of 64x FY23 and 59x FY24 earnings and therefore might have limited near-term upside, we expect the rich valuations to sustain given increasing aggression on footprint expansion, room to increase prices to drive up margins and a strong long term growth potential with entry into multiple new brands and geographies. Any correction on valuation concerns could be a good opportunity to add the stock.
On the opportunity front, Yes analysts are optimistic on about 3000 Domino stores in India as well as room for both existing and new markets.
The management outlook is encouraging and confident. Pratik Pota, CEO and Wholetime Director, Jubilant Foodworks Limited said, "I am pleased with our performance in Q4FY21 and FY21. We returned to growth during the quarter, opened a large number of new stores, improved our operating margins and expanded our portfolio of brands. The quarter rounded off a challenging year where we were tested like never before, and I could not be more proud of the way our teams rallied around to serve our customers and our communities and to deliver an outstanding performance during the year. We are confident that our sustained investments in Digital, Supply Chain, Brand building, Innovation and Portfolio expansion will continue to be a source of competitive advantage for us and help drive hyper-growth."
Shyam S. Bhartia, Chairman and Hari S. Bhartia, Co-Chairman, Jubilant Foodworks Limited in a joint statement said, "We are glad to have transitioned from recovery to growth phase and concluded the fiscal year on a positive note despite unique challenges posed by the global pandemic. Our relentless focus on driving customer experience, customer and employee safety, cost management and productivity, resulted in a strong operating performance in Q4. During the quarter, we acquired the master franchise rights for Popeyes® in India; we also announced our investment in DP Eurasia. As we celebrate our silver jubilee in the country, we are excited about the future and ready to seize the opportunities that lie ahead."
Disclaimer: This information is solely for information purposes. Readers are advised to seek professional guidance from a SEBI registered financial advisor prior for their investments.