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Centrum Broking Report
Jubilant FoodWorks Ltd.'s Q2 print was in-line; standalone revenue grew 4.5% led by 1.3% decline in like-for-like, yet Ebitda/profit after tax cut by 10.2%/39.5%. Given stretched consumer spends, and extended Shravan saw 1.2% decline in average daily sales.
Delivery channel grew 7.9%, whilst dine-in declined by 3.8% in Q2. With 50% order contribution, enrolment for loyalty program (Cheesy rewards) grew 16.1% QoQ (19.5 million customers), yet with 10.6 million app download its monthly average users stood at 10.8 million grew 4.8% QoQ.
Jubilant FoodWorks stepped up Its efforts to revive LFL growth by,
re-imaging 33 stores and ACE 2.0 to upgrade customer experience,
sharpened on ground execution – seven regions,
launched new range of Pizzas – mutton and prawns, and
guaranteed 20-minute delivery service in Bengaluru.
Despite high dairy inflation, gross margin inched up to 76.4% (+20 basis points), yet higher employee cost (+12.3%), rent (+11.7%) and selling, general and administrative (+11.3%) ensued post Indian Accounting Standard Ebitda margins at 20.9% (-341 bp).
Jubilant FoodWorks held store expansion target with single digit LFL led by strong menu innovation.
We introduce FY26E earnings and maintain 'Buy', with a revised discounted cash flow-based target price Rs 625 (implying enterprise value/Eitda of 20.0 times average FY25E/FY26E)
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