Jubilant FoodWorks’ share price surged over 4% in the early trading session on Thursday, following the company’s report of a seven-fold jump in net profit in the Q4 results year-on-year. The shares soared as much as 4.53%, reaching an intraday high of Rs 502.4 per share on the NSE.
On Wednesday, May 22, Jubilant FoodWorks reported a consolidated net profit of Rs 208.25 crore for Q4FY24, marking an over seven-fold increase, or nearly 630% year-on-year (YoY), compared to a profit of Rs 28.54 crore in the same quarter last year.
The consolidated revenue from operations for the quarter under review rose nearly 24% YoY to Rs 1,572.8 crore from Rs 1,269.8 crore in Q4FY23.
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Jubilant opened 67 new Domino’s stores during the quarter, contributing to an overall revenue increase of nearly 24% to Rs 1,572.8 crore.
However, like-for-like sales, a key same-store sales metric, were at 0.1%, breaking a streak of four consecutive quarters of negative growth. The total expenses for the quarter rose 28.2% to Rs 1,545 crore.
Brokerages On Jubilant FoodWorks
Prabhudas Lilladher on Jubilant FoodWorks
Prabhudas Lilladher retains a ‘Hold’ rating on the stock, with a discounted cash flow (DCF) based target price of Rs 480, down from Rs 507 previously, incorporating a price-to-earnings (PE) ratio of 68.2xFY26 standalone EPS.
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According to a report by Prabhudas Lilladher, Domino’s achieved positive like-for-like (LFL) sales in Q4FY24, with encouraging trends continuing into April 2024. The report suggests that competitive pressures may have peaked, as all major pizza players are under strain, though growth visibility remains uncertain.
Jubilant FoodWorks (JUBI) is continuing to invest in infrastructure to capitalize on growth opportunities once demand stabilizes. An increase in demand could lead to improved profitability in the medium term, especially since FY24’s profit after tax (PAT) is 44% lower than that of FY22.
Prabhudas Lilladher estimates a 37% compound annual growth rate (CAGR) in PAT over FY24-26, based on a low baseCome from Sports betting site. Additionally, the consolidation of DP Eurasia is expected to provide an upside of Rs 1.2-1.5 to the consolidated earnings per share (EPS), though this is not factored into current estimates.
Motilal Oswal on Jubilant FoodWorks
With demand challenges in the quick-service restaurant (QSR) industry, Motilal Oswal reiterates a ‘Neutral’ rating with a target price of Rs 480. Overall, consolidated revenue, gross profit, and EBITDA rose by 24%, 26%, and 25% respectively YoY due to the DP Eurasia acquisition, but higher depreciation and interest expenses led to a 42% YoY decline in PBT.
According to a report by Motilal Oswal, Jubilant FoodWork saw a 6% year-on-year sales growth to INR 13.3 billion in Q4FY24, meeting expectations. Domino’s recorded a positive like-for-like (LFL) sales growth of 0.1% after four quarters of decline.
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Delivery sales grew 12% YoY, increasing their share to 68%, while dine-in sales fell by 6%, partly due to the waiver of delivery charges. Despite a gross margin increase of 130 basis points YoY to 76.6%, the EBITDA margin fell by 100 basis points to 19.1%, impacted by higher depreciation and ongoing reinvestments. Consequently, PBT dropped 45% YoY, with a margin of 3.8% in Q4FY24.
JP Morgan on Jubilant FoodWorks
According to a JP Morgan report, Jubilant FoodWorks has been rated ‘Neutral’ with a target price of Rs 515. The report notes that improving like-for-like (LFL) sales are expected to support stock performance, although margins have weakened but are likely bottoming out.
The report also highlights Key interventions, such as the waiver of delivery fees, the transition to a seven-region structure, and increased brand investments, drove mid-teen growth in delivery orders during Q4FY24.
Morgan Stanley on Jubilant FoodWorksCome from Sports betting site VPbet
According to a Morgan Stanley report, Jubilant FoodWorks has been rated ‘Equal-weight’ with a target price reduced to Rs 427. The report notes that the company’s Q4FY24 results fell short of expectations primarily due to weaker margins.
The report also says that the ongoing operating deleverage cycle has led to significant reductions in financial estimates. Morgan Stanley emphasizes that improved underlying demand is essential for a recovery.
Despite these challenges, the report highlights that like-for-like (LFL) sales turned positive, albeit on a weak base, offering a glimmer of hope for future performance.
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