Jubilant Results

Jubilant FoodWorks came up with fairly good numbers for the recently concluded December quarter of 2012. Its topline at Rs 385 crore witnessed a growth of 39% on a YoY basis for Q3FY13. The EBITDA witnessed a jump of 28.24% for the same period to stand at Rs 67 crore. The bottomline at Rs 37.70 crore was up 27.80% for the quarter. A sound cost management and higher volumes have led to an improvement of its EBITDA for the quarter.

The company is basically a food service company and has two franchises; Domino’s Pizza and Dunkin Donuts. In the December quarter the company added 37 stores in its Domino’s chain to take the total number of stores that it operates in this brand to 552, covering 118 cities. The company has entered cities like Guntur, Navsari, Ankleshwar, Tirupur, Ambala and Tumkur with its pizza business. Other than adding stores, Domino’s has also added new products like Cheesy Boloroni Pizza and Taco Indiana to its product list which have added to its sales. On the Dunkin’ Donunts front it has opened 8 new restaurants. A wide acceptance for its Diwali gift pack in the December quarter has helped it boost its performance to some extent.

The growth in its topline can be attributed to better momentum in sales from existing stores and higher business from new stores. Although raw material prices grew by 40% on a YoY basis, they have been in line with the expansion of the business of the company says the management. The total number of employees stood at 20659 as of December 2012 as against 15049 for December 2011. The rise in the personnel expenses have gone up in line with this additional workforce in place.

The company intends to add 110 Domino’s Pizza stores in FY13, and till date it has added 87 stores to its list. It wants to set up 10 Dunkin’ Donuts stores till the end of FY13 and has been able to launch 8 till date. With a further addition of stores there will be better traction in sales for the company going forward. At the current price the stock trades at a TTM PE of 56.13x. This leaves limited scope of further upside in the stock going forward. However, with focused management in place one can continue to hold the scrip from a longer term perspective.