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Jubilant FoodWorks
RECO : ACCUMULATE TP : Rs600
Investment Rationale
§ Jubilant FoodWorks (JFL) reported satisfactory performance in Q3FY11– APAT at Rs189 mn meets expectation.
Earnings estimates were retained at Rs11.5/Share and Rs15.3/Share for FY11E and FY12E
§ Same-Store-Sales growth was robust at 39% for 9MFY11 versus erstwhile expectation of 20%. With forthcoming
Cricket season in India spanning 90 days, expect robust Same-Store-Sales growth. In long term, Same-Store-
Sales growth should be 20% (higher then personal care products), equal to median growth
§ JFL has total store network of 364 Nos with presence in 87 cities, until Q3FY11. There is room to multiply the
store network atleast 2X in next 5 years. Accordingly, we have factored addition of 70 Nos every year for next 5
years, equivalent to current run-rate
§ Eyeing new growth drivers in QSR segment- deploy excess cash generated from Dominos franchisee and
augment overall growth. JFL is hopeful to launch new brand in next 6-8 months. The same remains un-factored
in our earnings estimates
§ JFL trading at premium valuations - PER of 33X FY12E earnings. Valuations to sustain until (1) JFL ventures into
ROE dilutive business proposition and (2) new avenues for investment in QSR or foods service segment in listed
domain
Valuations
§ Remain positive on growth prospects of QSR segment in India and Dominos business model in particular. JFL
should witness robust earnings growth for next 5 years, backed by strong category growth at +20% (higher then
personal care products). We have ACCUMULATE rating with price target of Rs600/Share (Rating Unchanged)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Jubilant FoodWorks
RECO : ACCUMULATE TP : Rs600
Investment Rationale
§ Jubilant FoodWorks (JFL) reported satisfactory performance in Q3FY11– APAT at Rs189 mn meets expectation.
Earnings estimates were retained at Rs11.5/Share and Rs15.3/Share for FY11E and FY12E
§ Same-Store-Sales growth was robust at 39% for 9MFY11 versus erstwhile expectation of 20%. With forthcoming
Cricket season in India spanning 90 days, expect robust Same-Store-Sales growth. In long term, Same-Store-
Sales growth should be 20% (higher then personal care products), equal to median growth
§ JFL has total store network of 364 Nos with presence in 87 cities, until Q3FY11. There is room to multiply the
store network atleast 2X in next 5 years. Accordingly, we have factored addition of 70 Nos every year for next 5
years, equivalent to current run-rate
§ Eyeing new growth drivers in QSR segment- deploy excess cash generated from Dominos franchisee and
augment overall growth. JFL is hopeful to launch new brand in next 6-8 months. The same remains un-factored
in our earnings estimates
§ JFL trading at premium valuations - PER of 33X FY12E earnings. Valuations to sustain until (1) JFL ventures into
ROE dilutive business proposition and (2) new avenues for investment in QSR or foods service segment in listed
domain
Valuations
§ Remain positive on growth prospects of QSR segment in India and Dominos business model in particular. JFL
should witness robust earnings growth for next 5 years, backed by strong category growth at +20% (higher then
personal care products). We have ACCUMULATE rating with price target of Rs600/Share (Rating Unchanged)
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