Please Share:: 
SSG surprises but doesn’t deliver outperformance; expensive on rich expectations. SELL. Even as SSG recovery to the positive zone (modest 1.9%) after four quarters of negative SSG did surprise us positively, it failed to reflect in any outperformance at the EBITDA or PAT level, both of which missed estimates. Our estimates broadly remain unchanged; the stock remains expensive at 40X aggressive FY2017E EPS. Rich valuations on aggressive forecasts are a risky combination. We remain SELLers with a revised TP of `1,175 (from `1,100), valuing the stock at 35X December 2016E EPS.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
3QFY15 broadly in line; SSG recovery into positive territory a key surprise JUBI reported yet another weak quarter of PAT growth. Results were broadly in line with our estimates – revenues at `5.5 bn (+21% yoy; 1% ahead of estimates), EBITDA at `726 mn (+8% yoy; 1% below estimates) and recurring PAT at `350 mn (+4% yoy; 6% below estimates). However, SSG trended up into positive territory at 1.9% yoy after four consecutive quarters of decline; this was ahead of our expectations of a 2% decline in SSG. The outperformance on SSG did not translate into EBITDA or PAT outperformance, reflecting lower-than-expected EBITDA from new Domino’s stores and Dunkin Donuts. EBITDA for the quarter grew at 8% yoy and EBITDA margin contracted 165 bps yoy to 13.1% (up 90 bps qoq). While GMs expanded 150 bps yoy/10 bps qoq (in line with our estimates), negative operating leverage on account of a still-weak SSG (staff costs up 220 bps yoy and rent up 75 bps yoy) and losses in Dunkin Donuts expansion impacted margins. Recurring PAT growth remained muted at 4% yoy despite 480 bps decline in ETR. PBT declined 3% yoy. SSG recovery more optical in nature, as per management; store expansion on track JUBI’s positive SSG performance was in sharp contrast to 10% decline reported by Yum! Brands India (Pizza Hut and KFC); we highlight Yum! SSG decline was stronger this quarter versus 2- 4% decline witnessed in the past four quarters. The JUBI management attributed the SSG recovery to a lower base and indicated no major pick-up in consumer spends. It maintained its outlook that SSG recovery into high single digits would take at least another 3-6 quarters. Price hike of 3% taken in November also aided SSG a tad, in our view. Store expansion continued at a robust pace – JUBI opened 41 new Domino’s stores and 9 new Dunkin Donuts stores during the quarter to take the end-3QFY15 store count to 838 and 46 respectively. The management maintained its guidance of 150 new Domino’s stores and 30 new DD stores in FY2015E and hasn’t yet shared any guidance for FY2016E. Estimates unchanged; reiterate SELL Our estimates broadly remain unchanged and the stock remains expensive at 40X aggressive FY2017E EPS. Rich valuations on aggressive forecasts are a risky combination. SELL.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily06022015mh.pdf
SSG surprises but doesn’t deliver outperformance; expensive on rich expectations. SELL. Even as SSG recovery to the positive zone (modest 1.9%) after four quarters of negative SSG did surprise us positively, it failed to reflect in any outperformance at the EBITDA or PAT level, both of which missed estimates. Our estimates broadly remain unchanged; the stock remains expensive at 40X aggressive FY2017E EPS. Rich valuations on aggressive forecasts are a risky combination. We remain SELLers with a revised TP of `1,175 (from `1,100), valuing the stock at 35X December 2016E EPS.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
3QFY15 broadly in line; SSG recovery into positive territory a key surprise JUBI reported yet another weak quarter of PAT growth. Results were broadly in line with our estimates – revenues at `5.5 bn (+21% yoy; 1% ahead of estimates), EBITDA at `726 mn (+8% yoy; 1% below estimates) and recurring PAT at `350 mn (+4% yoy; 6% below estimates). However, SSG trended up into positive territory at 1.9% yoy after four consecutive quarters of decline; this was ahead of our expectations of a 2% decline in SSG. The outperformance on SSG did not translate into EBITDA or PAT outperformance, reflecting lower-than-expected EBITDA from new Domino’s stores and Dunkin Donuts. EBITDA for the quarter grew at 8% yoy and EBITDA margin contracted 165 bps yoy to 13.1% (up 90 bps qoq). While GMs expanded 150 bps yoy/10 bps qoq (in line with our estimates), negative operating leverage on account of a still-weak SSG (staff costs up 220 bps yoy and rent up 75 bps yoy) and losses in Dunkin Donuts expansion impacted margins. Recurring PAT growth remained muted at 4% yoy despite 480 bps decline in ETR. PBT declined 3% yoy. SSG recovery more optical in nature, as per management; store expansion on track JUBI’s positive SSG performance was in sharp contrast to 10% decline reported by Yum! Brands India (Pizza Hut and KFC); we highlight Yum! SSG decline was stronger this quarter versus 2- 4% decline witnessed in the past four quarters. The JUBI management attributed the SSG recovery to a lower base and indicated no major pick-up in consumer spends. It maintained its outlook that SSG recovery into high single digits would take at least another 3-6 quarters. Price hike of 3% taken in November also aided SSG a tad, in our view. Store expansion continued at a robust pace – JUBI opened 41 new Domino’s stores and 9 new Dunkin Donuts stores during the quarter to take the end-3QFY15 store count to 838 and 46 respectively. The management maintained its guidance of 150 new Domino’s stores and 30 new DD stores in FY2015E and hasn’t yet shared any guidance for FY2016E. Estimates unchanged; reiterate SELL Our estimates broadly remain unchanged and the stock remains expensive at 40X aggressive FY2017E EPS. Rich valuations on aggressive forecasts are a risky combination. SELL.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily06022015mh.pdf
No comments:
Post a Comment