Jubilant FoodWorks CEO Ajay Kaul Resigns; Company Begins Hunt For Successor
Jubilant FoodWorks’ CEO Ajay Kaul quits amid falling sales
- Jubilant FoodWorks CEO Ajay Kaul will step down on March 31, 2017.
- Company says hunt for successor has begun.
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Jubilant FoodWorks stock falls 7.75 percent to Rs 927.3 as of 9:30 a.m.
Jubilant FoodWorks Ltd. today said its longtime Chief Executive Officer Ajay Kaul resigned from the company.
Kaul, who was with the fast food chain operator for 11 years, will continue in his current role till March 31, 2017, Jubilant FoodWorks said in an exchange filing. The search for a successor has been initiated, the company added.
On behalf of Jubilant FoodWorks, we would like to thank Ajay for his dedicated efforts and significant contribution through his tenure spanning over 11 years with the company.Shyam S Bhartia, Chairman and Director, and Hari S Bhartia, Co-Chairman and Director, Jubilant FoodWorks
Dwindling earnings, narrowing margins and increasing competition have weighed on the company’s stock, which has fallen 48 percent from its all time high of Rs 1,931 made on September 8, 2015.
Jubilant FoodWorks’ net profit fell 31 percent to Rs 19 crore in the quarter ended June, and the company’s same store sales contracted by 3.2 percent, the first decline in 6 quarters.
I would like to thank the Board for giving me the opportunity to lead Jubilant FoodWorks. While I feel very sad to announce this decision, I am extremely happy to say that Jubilant FoodWorks (and its brands Domino’s Pizza and Dunkin’ Donuts) is market leader in several ways.Ajay Kaul, Outgoing CEO, Jubilant FoodWorks
Analysts expect Kaul’s departure to impact Jubilant’s operations and weigh on the stock in the near-term.
“The impact of Ajay Kaul quitting will be directly seen on the operations of the company. In the last five to seven years, Kaul has done a good job. However, the last two years the company reported flattish to negative growth which was purely due to macro economic conditions,” Sachin Bobade, senior research analyst at Dolat Capital Market Ltd. told BloombergQuint in a phone interview.
The focus will now also be on who Jubilant brings on board as the next CEO.
“We expect the stock to react negatively as Ajay Kaul is perceived as the architect for strong supply chain and operational excellence, which is the base for Domino’s delivery system. However, now the market will look out for the next successor,” said Ruchita Maheshwari, senior research analyst at IIFL Wealth said in a phone interview.