PL First Cut - Jubilant Foodworks 2QFY24

PL First Cut – Jubilant Foodworks 2QFY24 – Amnish Aggarwal – Head of Research, Prabhudas Lilladher Pvt Ltd

Jubilant Foodworks 2QFY24: Inline performance, Miss on earnings

(CMP: Rs529|HOLD)

Financial Performance

> Revenues grew by 4.5% YoY to Rs13.4bn (PLe: Rs13.5bn)

> SSG growth at -1.3%

> Gross margins expanded by 15bps YoY to 76.4% (Ple: 76.0%)

> EBITDA declined by 10.2% YoY to Rs2.8bn (PLe:Rs2.8bn); Margins contracted by 341bps YoY to 20.9% (PLe:20.9%)

> Adj PAT declined by 39.5% YoY to Rs0.7bn (PLe:Rs0.8bn)

> ADS for mature stores grew by 1.4% QoQ to Rs81,658.

Other Updates

> Dominos store count stands at 1,888 in 2Q24. Added 50 new stores & entered into 3 new cities during the quarter.

> Dunking Donuts store count stands at 21 in 2Q24.

> New businesses – Hong’s Kitchen/Popeye’s store count at 18/22 (+3/+5).

> OLO to Delivery sales ratio stands at 98.2% in 2Q24 vs 97.7% in 2Q23.

> Total app downloads stands at 142.9mn in 2Q24 vs 104.4mn/132.3mn in 2Q23/1Q24; Added 38.5mn/10.6mn downloads YoY/QoQ.

> Cumulative enrollment for Domino’s Cheesy Rewards stands at 19.5mn users in 2Q24 (16.8mn/13.6mn/10.6mn in 1Q24/4Q23/3Q23).

> SSG growth for Sri Lanka/Bangladesh stands at 2%/85.6% in 2Q24.

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JUBI reported inline numbers (LFL growth of -1.3%). Dine-in channel was lower by 3.8% YoY vs 7.9% growth in delivery. RM Inflation remains stable; though better cost optimization initiatives have led to margin expansion sequentially, also loyalty programme additions continue to scale up well (50% contribution in 2Q24), which helps retain customer stickiness during such times. We have an HOLD rating on the stock.

Stock trades at 64.1x FY25 EPS