Asia Pacific Research August 11 ,2023

Equity Research Report

Jubilant Foodworks Ltd
Bullish on growth opportunity with Cost Saving Efficiency
Reco : BUY
About the Company CMP : Rs 498
Jubilant FoodWorks Limited is India’s largest foodservice company and is Target Price : Rs 600
part of the Jubilant Bhartia Group. Incorporated in 1995, the Company Potential Target : +20%
holds the exclusive master franchise rights from Domino’s Pizza Inc. to
develop and operate the Domino’s Pizza brand in India, Sri Lanka,
Bangladesh and Nepal. In India, it has a strong and extensive network of Stock data (as on July ,2023)
1,838 Domino’s restaurants across 394 cities. In Sri Lanka and Bangladesh, Nifty 19,331
the Company operates through its wholly-owned owned subsidiaries which 52 Week H/L (in Rs) 652/412
currently has 50 and 20 restaurants, respectively. Jubilant FoodWorks also Market Cap (cr) 31,197
Outstanding Shares (cr) 66
has exclusive rights to develop and operate Dunkin’ restaurants in India
Dividend yield (%) 0.24%
and Popeyes restaurants in India, Bangladesh, Nepal and Bhutan. The
NSE Code JUBLFOOD
Company currently operates 21 Dunkin’ restaurants across six Indian cities
and 17 Popeyes restaurants and entered into two new cities – Manipal and Stock Performance ( 1 Year )
Coimbatore , Jubilant FoodWorks launched its first owned-restaurant brand
‘Hong’s Kitchen’ in the Chinese cuisine segment which now has 15 Nifty 50 JUBLFOOD
restaurants across three cities. 20000.0 800.0
18000.0 700.0
600.0
Q4FY23 - Results Synopsis 16000.0
500.0
Jubilant FoodWorks Q1FY24 posted a Revenue of 13.1bn were revenue up 14000.0 400.0
by 4.6% QoQ & 5.6% YoY and EBITDA margin by 97 basis points 12000.0 300.0
sequentially .Despite key input cost holding up by gross margin at 76%
expanded by 75 bps sequentially, while PAT margin came in at 5.7%.
1M 3M 1Y
ADS for mature store grew by 2.7%,were there is decline in ticket size , Absolute Return 4.0% 3.4% -14.5%
App-installs loyalty enrolments led to growth in delivery channel sale by
8.4%.
Popeyes in the last 4 months has expanded in five cities .we continue to
Shareholding Pattern (July 2023)
Promoter 41.94%
stay bullish on the growth opportunity that QSR industry present.
FII 25.22%
Domino’s is looking forward and continue to invest for future growth DII 21.33%
although we had slow start for this quarter. We had a made slow start in Public 10.14%
store network expansion. 0.20%
Others

Company has expanded his food business through franchisee with Financial Summary
Popeyes, Dukin, Hong’s kitchen other than domino’s ,Company has Rs. (in mn) FY23 FY24E FY25E
spreaded domino’s stores across near by country like Sri lanka, Net Revenue 51,582 61,261 73,130
Bangladesh with 50 & 20 stores. YoY Growth (%) 8.0% 18.8% 19.4%
EBITDA 11,516 14,218 16,862
Popeyes restaurant was firstly opened in Bengaluru and now popeyes is EBITDA(%) 22.3% 23.2% 23.1%
people’s loveable restaurant , during the quarter popeyes added four PAT 3,562 24,220 28,265
new restaurant and entered in two new cities Manipal and Coimbatore YoY Growth (%) 8.3% 580.0% 116.7%
and also popeyes is now available on swiggy and zomato. ROE 17.3% 29.95% 28.50%
EPS 5.40% 37.36% 42.89%
During the quarter cheese price were on high and recent spike on EV/EBITDA 34.7x 25.7x 22.5x
vegetable price does pose near term risks and Company has focused on its P/BV 20.3x 11.6x 9.1x
driving efficiency and cost saving across line and leverage our strengths.
Due to that company have putted on the table positive EBITDA margin as Prepared by: Dharmik Dave
Guided by: Parth Verma (The Valuation School)
compare to previous quarter.
1
Asia Pacific Research August 11 ,2023

Exhibit 1: Quarterly Snapshot :

Particular (Rs Mn) Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 %QoQ

Revenue 11,162 12,108 11,760 12,551 13,015 13,318 12,698 13,097 4%

Raw Material 2,427 2,710 2,720 2,927 3,103 3,283 3,165 3,141 7%
Gross Profit 8,735 9,398 9,040 9,624 9,912 10,035 9,533 9,956 3%
Gross % 78.3% 77.6% 76.9% 76.7% 76.2% 75.3% 75.1% 76.0% -1%
Staff Cost 1,956 2,000 2,039 2,082 2,297 2,465 2,219 2,473 19%
Other Expenses 3,902 4,207 4,103 4,500 4,496 4,705 4,823 4,719 5%
EBITDA 2,877 3,191 2,898 3,042 3,119 2,865 2,491 2,764 -9%
Deprecation 927 1,031 1,060 1,071 1,146 1,326 1,315 1,328 24%
Other Income 95 111 126 107 104 96 198 91 -15%
PBIT 2,030 2,245 1,797 1,963 2,242 1,634 1,064 1,527 -22%
OPM % 18.2% 18.5% 15.3% 15.6% 17.2% 12.3% 8.4% 11.7% -25%
Interest 422 455 461 469 497 518 529 513 9%
PBT 1,608 1,790 1,336 1,494 1,745 1,116 535 1,014 -32%
Tax 409 459 377 368 430 311 249 262 -29%
PAT 1,199 1,331 959 1,126 1,315 805 286 752 -33%
Source: Company Reports, The Valuation School Research

Exhibit 2: Supplemental Metrics

Particular (Rs Mn) Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Trends
EBITDA 26% 26% 25% 24% 24% 22% 20% 21%
EBIT 18% 19% 15% 16% 17% 12% 8% 12%
PAT 11% 11% 8% 9% 10% 6% 2% 6%
Basic EPS 18.2 20.2 14.5 17.1 19.9 12.2 4.3 11.4
Effective Tax Rate % 25% 26% 28% 25% 25% 28% 47% 26%
Source: Company Reports, The Valuation School Research

Exhibit 3: Key Ratios Movement

Particular (Rs Mn) Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24
Revenue growth 25% 8% -3% 7% 4% 2% -5% 3%
Revenue growth per store 8% 8% 7% 8% 8% 8% 7% 7%
Price to earning 44.5x 35.6x 36.3x 30.0x 31.2x 41.9x 101.5x 44.0x
LFL Growth % 29.4% 7.5% 5.8% 28.3% 8.4% 0.3% -0.6% -1.3%
OLO Contribution to Delivery Sales (%) 97.9 97.9 97.9 97.9 97.9 97.9 97.9 97.9
Net store additions(Domino’s) 55 60 72 58 76 59 56 22
Domino’s no of app installed(Mn) 71 80 87 95 104 114 122 132
Source: Company Reports, The Valuation School Research

2
Asia Pacific Research August 11 ,2023

Con-Call Q4FY23 – Key Highlights

1. Growth Strategy

• Identified close to 75 projects internally through Project Vijay that are tracking every Monday morning along with
the leadership team.
• biggest Domino’s network in India, first city within Domino’s ecosystem globally to offer 20-minute delivery
promise, city and Focus on providing value to customers and driving order-led growth.
• Focused on driving efficiency and cost savings across lines and leverage on our strengths
• Efforts to improve dine-in experience and increase ticket size.
• Introduction of new products and menu innovations with spicy pizza range of new pizzas starting at an affordable
price point of Rs. 179.
• Positive response to loyalty program, Domino's Cheesy Rewards.
• Reimagination of stores and improvement in operational excellence.
• Commitment to raising the consumer service bar and improving systems and processes.
• Focus on customer and market first strategy.
• strategy of customer and market first, technology forward and operationally excellent is beginning to yield
results.
• Continue to invest for future growth.

2. Expansion Plans

• 23 new Domino’s stores were added in the current quarter and entered one new city taking our Domino’s India
network to 1,838 stores across 394 cities, Planning to add new 200-225 stores more this year
• Positive response to Popeyes stores and plans to open 30-35 more this year.
• Hong’s Kitchen, continue to see robust growth in revenue with order and ticket led growth added two new stores
in Delhi during the quarter taking the tally to 15 stores across three cities and more Expansion plans for Hong's
Kitchen format.
• Slow start but looking for an expansion in tier one ,two ,three cities.

3. Financial Performance

• Revenue growth of 4.6% QoQ and 5.6% YoY.

• Improved EBITDA margin and gross margin sequentially.
• Targeting stable state margin of 23-24% in the long run.
• Ongoing focus on cost efficiency and internal efficiencies to improve margins.
• No erosion in value of DP Eurasia stake and no impairment risk.

4. Technology and Data

• Focus on data and technology forward initiatives.

• Digital & Technology are the area in which investment will double on.

5. Cost Savings and Efficiency

• Cost savings and efficiency measures implemented to mitigate inflationary pressures.

• Ongoing efforts to drive operational efficiency and cost savings.

6. Marketing and Sales

3
• Plans to capitalize on cricket World Cup event for increased sales.
Asia Pacific Research August 11 ,2023

Exhibit 4: Revenue grew by 5.6% YoY Exhibit 5: EBITDA Contracted by 9% & 345bps YoY

EBITDA EBITDA %

13,400 3,500 30%

13,200 3,000 25%

13,000 2,500
20%
12,800 2,000
15%
12,600 1,500
10%
12,400 1,000

12,200 500 5%

12,000 0 0%
Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24
Source: Company Reports Source: Company Reports

Exhibit 6: PAT Contracted by 33% YoY Exhibit 7: LFL Growth at -1.3% in 4QFY24

PAT PAT %
28.0%
1,400 12%
23.0%
1,200 10%
1,000 18.0%
8%
800
6% 13.0%
600
4% 8.0%
400
200 2%
3.0%
0 0%
Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 -2.0% Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24
Source: Company Reports Source: Company Reports

Exhibit 8: Dominoes opened 23 new stores Exhibit 9: Dominoes now cover 394 Cities
1900
400
1850
390
1800
380
1750 370
1700 360
1650 350
1600 340
1550 330
1500 320
Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3FY23 Q4FY23 4
Q1FY24
Source: Company Reports Source: Company Reports
Asia Pacific Research August 11 ,2023

Exhibit 10: Annual Snapshot :

Particular (Rs Mn) Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Sales 1,736 2,093 2,438 2,583 3,018 3,563 3,927 3,312 4,396 5,158
Raw Material Cost 454 529 580 631 767 885 985 728 994 1,253
Power and Fuel 105 124 140 146 160 169 173 148 201 0
Other Mfr. Exp 113 136 157 174 189 233 246 262 304 0
Employee Cost 341 444 577 596 615 684 798 748 770 906
Total exp 1,012 1,232 1,453 1,547 1,730 1,972 2,200 1,884 2,265 2,154
Gross Margin 724 861 985 1,037 1,288 1,591 1,727 1,428 2,131 3,004
Gross Margin % 42% 41% 40% 40% 43% 45% 44% 43% 48% 58%
Selling and admin 404 522 620 727 770 894 745 571 915 0
Other Expenses 70 83 99 65 76 95 99 77 109 1,879
EBITDA 250 256 265 245 442 603 883 780 1,106 1,125
EBITDA % 14% 12% 11% 9% 15% 17% 22% 24% 25% 22%
Other Income 9 6 10 -1 21 45 38 64 26 50
Depreciation 79 101 128 155 160 157 352 375 393 486
EBIT 180 161 147 88 303 490 568 469 739 690
EBIT % 10% 8% 6% 3% 10% 14% 14% 14% 17% 13%
Interest 0 0 0 0 0 0 165 163 176 201
PBT 180 161 147 88 303 490 403 306 563 489
Tax 62 50 50 31 107 172 124 76 145 136
PAT 118 111 97 58 196 320 280 232 420 353

Exhibit 9: Supplemental Metrics

Particular (Rs Mn) Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
EBITDA 14% 12% 11% 9% 15% 17% 22% 24% 25% 22%
EBIT 10% 8% 6% 3% 10% 14% 14% 14% 17% 13%
PAT 7% 5% 4% 2% 7% 9% 7% 7% 10% 7%
Basic EPS 1.81 1.69 1.47 0.88 2.97 4.85 4.24 3.51 6.37 5.35
Effective Tax Rate % 34% 31% 34% 35% 35% 35% 31% 25% 26% 28%

Exhibit 10: Key Ratios Movement

Particular (Rs Mn) Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Enterprise Value (EV) 6939.25 9653.48 8368.832 7266.806 15217.26 18560.75 20431.43 39493.7 36333.98 31334.62
EV/Total Revenue 4.0x 4.6x 3.4x 2.8x 5.0x 5.2x 5.2x 11.9x 8.3x 6.1x
EV/EBITDA 27.8x 37.6x 31.5x 29.7x 34.4x 30.8x 23.1x 50.6x 32.8x 27.8x
EV/EBIT 38.5x 59.8x 56.9x 82.3x 50.2x 37.9x 36.0x 84.2x 49.1x 45.4x
P/E 58.9x 87.3x 86.7x 126.4x 78.2x 59.6x 69.4x 165.8x 82.8x 82.2x
P/BV 12.7x 15.0x 11.0x 9.1x 15.9x 15.1x 17.3x 26.9x 17.9x 14.2x

5
Asia Pacific Research August 11 ,2023

Peer Comparison
Exhibit 13: Peer Stock Performance
Peer Stock Performance (1Y)- Indexed
180.0

160.0

140.0

120.0

100.0

80.0

60.0

JUBLFOOD DEVYANI WESTLIFE SAPPHIRE

Source: Yahoo Finance

Exhibit 14: Peers Financial Performance

Int EV / CFO
S.No. Name CMP Mar Cap PEG P/E Debt ROCE % ROE %
Coverage EBITDA EBITDA %

1 Jubilant Food 498 32,870 9.5 122.0 2,554 2.9 31 1621% 1811% 0.8
2 Devyani Intl 198 23,911 1.9 102.8 1,565 2.6 37 1839% 3386% 0.9
3 Westlife Food 931 14,513 1.5 124.2 1,203 2.6 38 1476% 2173% 0.8
4 Sapphire Foods 1,363 8,671 0.7 39.4 963 2.2 20 980% 2074% 1.2
Source: Screener.in

6
Asia Pacific Research August 11 ,2023

Analyst Coverage Universe

Exhibit 15: Peers Financial Performance

# DATE Research House Rating Price at Reco Target

1 04-08-23 Geojit BNP Paribas Buy 517.15 563
2 26-07-2023 HDFC Securities Accumulate 468 500
3 26-07-2023 ICICI Securities Limited Buy 477 590
4 25-07-2023 Prabhudas Lilladhar Hold 477 490
5 19-05-2023 ICICI Securities Limited Buy 469 600
6 18-05-2023 HDFC Securities Accumulate 475 475
7 18-05-2023 ICICI Securities Limited Buy 475 600
8 17-05-2023 Prabhudas Lilladhar Accumulate 481 515
9 17-05-2023 Motilal Oswal Buy 481 560
10 07-03-2023 ICICI Securities Limited Buy 447 630
11 12-02-2023 ICICI Securities Limited Buy 460 630
12 09-02-2023 Geojit BNP Paribas Buy 458 520
13 03-02-2023 Bonanza Buy 436 607
14 02-02-2023 HDFC Securities Sell 436 475
15 02-02-2023 ICICI Securities Limited Buy 436 630
16 18-01-2023 Prabhudas Lilladhar Buy 504 610
17 28-12-2022 Prabhudas Lilladhar Buy 510 610
18 23-12-2022 ICICI Securities Limited Buy 534 720
19 15-11-2022 Geojit BNP Paribas Buy 551 650
20 11-11-2022 Bonanza Buy 563 777
Source: Trendlyne

Disclaimer: This is an academic project and doesn’t meant for commercial usage.

This information/document does not constitute an offer to sell or solicitation for the purchase or sale of any financial instrument or
as an official confirmation of any transaction. The information contained herein is obtained from publicly available data or other
sources believed to be reliable and the Author has not independently verified the accuracy and completeness of the said data and
hence it should not be relied upon as such.
Author is not SEBI registered investment analyst. This document is prepared as part of academic project.
Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities
quoted are for illustration only and are not recommendatory. Registration granted by SEBI, and certification from NISM in no way
guarantee performance of the intermediary or provide any assurance of returns to investors.