Jubilant Foodworks adds 180 stores in past 3yrs

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Jubilant Foodworks adds 180 stores in past 3yrs

In an interview with CNBC-TV18, Ajay Kaul, Chief Executive Officer of Jubilant Foodworks, spoke about the its growth plans.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Probiotic health foods may now be regulated Ranbaxy shares fall on FDA letter to unit Jubilant Life BSE | NSE 31/05/12 Are Mutual Funds betting on Jubilant Life?

In an interview with CNBC-TV18, Ajay Kaul, Chief Executive Officer of Jubilant Foodworks , spoke about the its growth plans.

Here is a verbatim transcript of an exclusive interview with Ajay Kaul on CNBC-TV18. Also watch the accompanying video.

Q: Would you be able to give us some indication on what you are valuing the initial public offering (IPO) at? How much of the India Private Equity Fund and the Indocean Pizza holding has got into this particular investment? Is this just a pure exit for them or you are also taking some money by issuing new shares?

A: India Private Equity Fund and the Indocean Pizza Holding hold around 32% of the company. They have been with us most amicably in the last nine-ten years as any private equity fund would do. They want to exit after having made their returns. So that is the primary objective I would say of the issue offer for sale. Additionally, there are around 40 lakh shares, which is 4 million shares, we are additionally offering. So all put together around 2.26 crore shares are being offered to the public.

Q: How soon is the offer? Will this come in 20 days?

A: It all depends on the Securities and Exchange Board of India (SEBI) clearance. We are all waiting for it. As soon as it comes in, we will be ready to go to the market.

Q: What is your latest earnings figure? I have a number here which says accumulated losses of 70 crore. Will you go to the market with this kind of a figure?

A: There are accumulated losses coming from the previous years but if you look at the last three-four years, our EBITDA percentage has been climbing steadily and this year so far you probably would have August numbers with you. It is sitting at around 16% as percentage of sale. So it has been steadily climbing like in any other retail venture. The first few years do end up a few losses but last four-five years has been a fantastic run.

Q: I am looking at your net profit number, it is about 3-4% and that is what it has been- what would you say to investors, 3% seems pretty marginal and given the kind of guarantees you give on pizza delivery, any small thing could take that into negative?

A: Coming to the 30 minute delivery which has come up a couple of times in this discussion, only about 0.3-0.4% of our deliveries are actually given free. So it is something which we measure every single day and we mark that very closely. So that is never an issue.