Jubilant FoodWorks gains 8% on strong sales recovery in December quarter

Shares of Jubilant FoodWorks zoomed 8 per cent to Rs 2,868 in intra-day trade on the BSE on Thursday after the company reported a good operational performance in the December quarter (Q3FY21), with Ebitda earnings before interest, taxes, depreciation, and amortisation) margin improving by 243 basis points (bps) year on year (YoY) at 26.4 per cent. The fast food major runs the Domino's Pizza franchise in the country.

In Q3FY21, it reported a 21.6 percent YoY jump in its net profit to Rs 124 crore from Rs 102 crore as the firm nearly doubled its deferred tax amount to Rs 107 crore from Rs 52 crore in the corresponding period previous year.

The company recorded a dip in its operating revenue, which inched down to Rs 1,069 crore from Rs 1,071 crore in October-December, 2019. However, on sequentially revenue from operations grew 31.2 per cent as Domino’s delivered a recovery of 100.3 per cent against last year.

The company said Dominos witnessed complete sales recovery during the quarter backed by continued strong growth momentum in Delivery and Takeaway channels which grew by 18.5 per cent and 64.3 per cent respectively.  The management delighted to see a complete revenue recovery of the business along with strong improvement in margins. As the Covid impact abates further, the management believes that the company is in for a period of strong, sustained growth in the future.

The company returned to pre-Covid level sales in Q3 and saw 3 per cent Store sales growth (SSG) growth in January 2021. Recovery has been relatively faster and led by strong traction in delivery/takeaway channels, which grew 19 per cent and 64 per cent, respectively, said analysts at Emkay Global Financial Services.

Ebitda margins were slightly lower due to higher employee/marketing costs; gross margins moderated by 50bps QoQ (up 340bps YoY). Stronger SSG and post-Covid cost restructuring should continue to aid Ebitda margin expansion through FY22E, the brokerage firm said in result update.

At 12:47 pm, the stock was trading 7 per cent higher at Rs 2,834 on the BSE, as compared to 0.29 per cent rise in the S&P BSE Sensex. It hit a 52-week high of Rs 2,987, on January 11, 2021. The trading volumes on the counter more-than-doubled with a combined 2.9 million equity shares changing hands on the NSE and BSE.