Emkay's research report on Jubilant FoodWorks
JUBI is up 10% over the last 1 week. Our channel checks indicate considerable pick up in order growth for Domino’s in Apr-24 and continued traction should help it deliver a low-to-mid-teen topline growth in FY25E (vs. 5-6% in FY24E). Initiatives such as free delivery (for order value >Rs149), a 4-course meal at Rs99, and loyalty program (cheesy rewards) are likely to propel this order growth albeit at the cost of a single-digit decline in bill-size.
Outlook
In our view, the gross-margin impact of the delivery waiver could be partially or fully offset by operating leverage on fixed expenses (employee costs, rentals, etc) and by gross-margin gains from the new Bangalore commissary (Exhibit 1). Though we do not see much scope for increase in Street estimates, the growth revival phase should drive a 15% re-rating, in our view. Given the sustaining trends, there is 30% upside to our TP, but we remain conservative for now. Faster expansion for Hong’s and better traction in DP Eurasia hold potential upside.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
