Will Jubilant Foodworks see a pick up following poor Q4FY17?

Jubilant Foodworks, which had a disastrous last quarter of FY17, could post a 6 percent rise in net profit for June quarter at Rs 20.1 crore, according to a poll of analysts by CNBC-TV18. The total income could rise 6.3 percent at Rs 647.5 crore, against Rs 608.9 crore.

Meanwhile, the earnings before interest, taxes, depreciation and amortisation could soar 16.6 percent at Rs 67.3 crore against Rs 57.7 crore, while the operating margin could be seen at 10.4 percent.

The key thing to watch out could be the same store sales growth, which had seen a sharp fall of negative 7.5 percent in the previous quarter. In the June quarter, analysts expect it to be 2.9 percent. Also, investors could watch out for store additions as it is likely to open 10-12 stores in Q1.

The June quarter is a very important one for the company due to a combination of 6 factors.

1) First result under Pratik Pota’s management

2) Last quarter was the worst quarter for the company

3) The company had started giving everyday value against strong promotional discounts

4) IPL & summer vacations during the quarter, which are seen as usually high consumption period

5) The company’s tremendous focus on store rationalization & cost control

6) Stable raw material prices