Jubilant FoodWorks revenue grows 21% during the second quarter

INDIA – Jubilant FoodWorks Limited, which holds the master franchise for Domino’s Pizza in India has reported 21% rise in revenue to US$120 million during the second quarter, compared to US$99m in the same period last year, LiveMint reports.

The company which also operates the Dunkin’ Donuts chain also recorded 60.2% year-on-year growth in net profit at US$10.6m in the quarter ended September.

According to the fast-food group, revenues were driven by a strong same store growth in Domino’s Pizza.

During the period, the company opened 24 new Domino’s stores and focused on its online presence, enabled Domino’s app garnering strong user ratings and a several innovative and user friendly features.

The company said Dunkin’ Donuts too delivered healthy growth and lowered its losses.

Shyam S Bhartia, chairman, Jubilant FoodWorks said: “Strong growth momentum continues to be driven by successful execution of growth strategy outlined at the beginning of FY18.”

But analysts said that growth rates may soften due to high same store sales growth (SSG).

“Worries on cost push driven by rising fuel prices, impact freight, delivery costs and competition for delivery manpower from food aggregators and e-commerce companies could keep the stock trading sideways,” said Rohit Chordia, an analyst with Kotak Securities.

“Next couple of quarters will be a test of healthy SSG sustainability as the base gets stiffer.”

It had announced that it expected company results to be impacted by rising competition and greater visibility of food aggregators are increasing manpower costs and availability.

The company cut its PE multiple from 45 to 40 given normalised PAT CAGR of 24 per cent over FY18-21.

It reported 27.3% growth in in Q4 operating revenue at US$109.86 million marked by key strategic initiatives including the launch of all new Domino’s, every day value and sharp focus on digital sales.

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