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Jubilant FoodWorks trades weak even as promoters decide not to take royalty

The stock was down 3 per cent to Rs 1,263, falling 6 per cent from its intra-day high on the BSE.

Domino’s, Jubilant FoodWorks, Pizza
Domino’s, Jubilant FoodWorks, Pizza
SI Reporter Mumbai
Last Updated : Feb 06 2019 | 11:11 AM IST
Shares of Jubilant FoodWorks slipped 3 per cent to Rs 1,263 apiece, falling 6 per cent from its intra-day high on the BSE, even as the promoters of food service major decided not to charge a royalty from the firm within hours of announcing that they would. The stock was up 3 per cent higher at Rs 1,344 on the BSE in early morning trade.

"Jubilant Enpro Pvt. Ltd. (a promoter group company), has decided not to charge the corporate brand royalty of 0.25 per cent of the consolidated revenues of the Company and the same stands withdrawn," the company said in a regulatory filing.

On Tuesday, Jubilant FoodWorks ended 6 per cent lower on speculation that the company would pay a royalty of 0.5 per cent of net sales to the Bhartia family, who hold 45 per cent in the firm, for use of the Jubilant name. The stock had tanked 11 per cent in intra-day trade to Rs 1,236 on the BSE yesterday.

Jubilant FoodWorks on Tuesday after market hours informed the stock exchanges that the Board of the Company has approved the payment of a corporate brand royalty to Jubilant Enpro, which owns the corporate brand name 'JUBIlANT'.

“The royalty payment will enable the group to help protect, nurture and enhance the corporate brand name, ‘JUBIlANT', and the group's image globally. It has been decided to pay 0.25 per cent of the consolidated revenue of the Company effective FY20 as royalty,” it added.

Separately, the Jubilant FoodWorks was penalised by National Anti-Profiteering Authority (NAA) for not passing on the cut in Goods and Services Tax (GST) rates.

“The NAA has passed an order in the Anti Profiteering Investigation on the company which has been posted on NAA website on February 4, 2019, concluding a profiteering of Rs 41.42 crore,” Jubilant FoodWorks said in a regulatory filing.

Jubilant FoodWorks is part of Jubilant Bhartia group and is one of India’s largest food service company, with a network of 1,200 Domino’s Pizza restaurants across 271 cities as of December 31, 2018. The company and its subsidiary have the exclusive rights to develop and operate Domino’s Pizza brand in India, Sri Lanka, Bangladesh and Nepal.

At 10:07 am; the stock was trading 1.6 per cent lower at Rs 1,282 on the BSE, as compared to 0.64 per cent rise in the S&P BSE Sensex. A combined 3.39 million equity shares changed hands on the counter on the BSE and NSE so far.

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