ICICI Securities: Jubilant Foodworks Delivery Fees; Short-Term Opportunity Versus Long-Term Brand Positioning Debate

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.We view Domino's charging delivery fees ranging from Rs 21 to 42 as a positive for stock in the near term as it will help mitigate headwind of negative operating leverage. Yes, consumers are not prioritising value in financial year 2021 and hence negative price elasticity is not a worry. However, implementing a price increase in times like these, seen in conjunction with 'variabilisation' of delivery personnel wages and renegotiation of rentals may potentially be interpreted as opportunistic.Importantly, Domino's brand has worked hard, since 2017, to improve the RTB (reasons to buy) of ‘value’. This might be at risk in long term. Ceteris paribus which is unlikely, this delivery fee leads to approximately 20% upgrade in recurring profits for financial year 22 and beyond. Though we remain structural bulls of the Jubilant story, we highlight that gaining market shares in a likely declining industry that too in a high operating leverage industry is a tough journey to traverse..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ICICI Securities: Jubilant Foodworks Delivery Fees; Short-Term Opportunity Versus Long-Term Brand Positioning Debate

ICICI Securities: Jubilant Foodworks Delivery Fees; Short-Term Opportunity Versus Long-Term Brand Positioning Debate

Choose a plan