Jubilant Foodworks - Focus on growth and profitability is encouraging - ICICI Securities
Posted On: 2021-02-03 23:39:32 (Time Zone: Arizona, USA)
Flat revenues in 3Q (and 6% growth in January) was a tad underwhelming. However, the internals are more impressive - strong growth in delivery (+19%) and takeaway (+64%) channels. Dine-in sales down 58% YoY is primarily due to supply constraints (allowed to operate with only 50% utilisation) and was not due to a weak demand. We believe that growth could improve with potential easing of restrictions (multiplexes are now allowed to operate at 100% capacity). We especially like the renewed focus towards growth (acceleration in store expansion, emphasis on own digital infra) and margin expansion initiatives (network optimisation, cost rationalisation, delivery charge). New brands (Hong s Kitchen and Ekdum!) provide an entry into the two largest food categories in India - option value. We maintain our long-term bullish stance on the sto