Motilal Oswal: Jubilant FoodWorks Posts Weak Q1 Results, Structural Story Getting Better
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.
Motilal Oswal Report
Jubilant FoodWorks Ltd.’s Q1 FY21 results were weaker than expected, especially in terms of operating margins.
Depreciation and interest costs were also higher than anticipated. Nevertheless, recovery in system sales was sharp in July 2020 and August 2020 to 69.8% and 84.6%, respectively, of last year’s levels for the corresponding months.
Three events underpin higher growth and profitability for Jubilant FoodWorks beyond the Covid-19-impacted FY21:
1. the ongoing structural push toward delivery;2. the introduction of delivery charge; and 3. opportunity created by the crisis to close down 105 of its least profitable (and dine-in dependent) stores.
This would lead to all-time high Ebitda margins in FY22, resulting in 33% upward revision in our earning per share projections for FY22.
Click on the attachment to read the full report:
This 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.