Jubilant Foodworks Ltd. Impressive performance continues…: IDBI capital,

Jubilant Foodworks Ltd. (JUBI) delivered another strong quarter on top line/bottom line with 45%/40% growth YoY respectively to Rs3.1 bn/Rs323 mn – ahead of estimates of Rs2.9 bn/Rs308 mn. Gross margin/EBITDA margin was marginally lower at 73.4%/18.2% impacted by continued food inflation and operationalising of DD stores. We raise our revenue estimates by 1%/4% for FY13/14 (mgmt has raised its store opening target to 100 in FY13 vs. 90 earlier), however, cut our EPS estimates by 5%/4%, to factor in 70bps cut in margin to factor in impact of DD stores (mgmt has guided for 60-70bps margin impact on operationalising of DD stores). We factor in SSG of 20%/18% for FY13/14 with store addition of 100/95. We remain impressed by management’s positive tone on healthy SSG trend (it has guided for >=18% SSG in FY13) and its ability to maintain profitability despite rising competition (led by pricing power and operating leverage – mgt has guided to at least match FY12 EBITDA margin of 18.7% without considering DD stores impact on margin). Maintain ACCUMULATE with DCF valuation of Rs1,260 (13.1% WACC; 5% terminal growth).

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Jubilant Foodworks Ltd. (JUBI) delivered another strong quarter on top line/bottom line with 45%/40% growth YoY respectively to Rs3.1 bn/Rs323 mn – ahead of estimates of Rs2.9 bn/Rs308 mn. Gross margin/EBITDA margin was marginally lower at 73.4%/18.2% impacted by continued food inflation and operationalising of DD stores. We raise our revenue estimates by 1%/4% for FY13/14 (mgmt has raised its store opening target to 100 in FY13 vs. 90 earlier), however, cut our EPS estimates by 5%/4%, to factor in 70bps cut in margin to factor in impact of DD stores (mgmt has guided for 60-70bps margin impact on operationalising of DD stores). We factor in SSG of 20%/18% for FY13/14 with store addition of 100/95. We remain impressed by management’s positive tone on healthy SSG trend (it has guided for >=18% SSG in FY13) and its ability to maintain profitability despite rising competition (led by pricing power and operating leverage – mgt has guided to at least match FY12 EBITDA margin of 18.7% without considering DD stores impact on margin). Maintain ACCUMULATE with DCF valuation of Rs1,260 (13.1% WACC; 5% terminal growth).