Jubilant FoodWorks shares snap 3-day fall, climb 2% today even as Q1 FY24 profit slumps

Shares of Jubilant FoodWorks, operator of Domino's Pizza in India, rose on Tuesday, pausing their three-day fall. The stock gained 2.23 per cent to settle at Rs 477.10. Today's upward move came despite that the company reported a 74 per cent fall in its June 2023 quarter profit (Q1 FY24). The drop in Q1 FY24 profit was on account of higher costs and spending heavily to expand in the country.

Jubilant FoodWorks' consolidated profit fell to Rs 28.92 crore in the quarter ended on June 30, from Rs 113 crore, a year earlier. Total expenses climbed 13 per cent to Rs 1,249 crore in Q1 FY24.

Key input costs are holding firm in a challenging inflationary environment, Jubilant said in a statement. However, the company continued to open new stores in India. It opened 23 Domino's stores during the quarter, with its total store count at 1,838.

The store-opening spree increased the overall revenue by 6 per cent to Rs 1,335 crore.

The stock rose today after Jubilant said it plans to add 200-225 Domino's stores in India by March 2024. Around 1.79 lakh shares changed hands today on BSE, which was higher than the two-week average volume of 49,000 shares.

Turnover on the counter stood at Rs 8.54 crore, commanding a market capitalisation (m-cap) of Rs 31,481.21 crore. The counter has lost 5.52 per cent in 2023 so far and 13.64 per cent in the past one year.

Prabhudas Lilladher has an 'Accumulate' rating on the stock. "The company reported inline numbers. Dine-in channel was flat vs 8.40 per cent in delivery. RM Inflation remains elevated; though better cost optimisation initiatives have led to margin expansion sequentially, also loyalty programme additions continue to scale up well (48 per cent contribution in Q1 FY24), which helps retain customer stickiness during such times. Stock trades at 49.2x FY25 EPS," it stated.

On technical setup, the stock traded higher than the 5-day and 100-day moving averages but lower than the 20-day, 50- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 47.37. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 86.45 against a price-to-book (P/B) value of 14.36.

The scrip has an average target price of Rs 511, Trendlyne data showed, suggesting a potential upside of 7 per cent. It has a one-year beta of 0.98, indicating average volatility on the counter.

Further, the company informed that "Jubilant Foodworks Netherlands B.V. (Netherlands Subsidiary), instead of being a wholly owned subsidiary of the company as per the Prior Restructuring Intimation will now be a wholly owned subsidiary of Jubilant FoodWorks International Luxembourg (Luxembourg Subsidiary)."

Jubilant is the first among listed restaurant operators to report Q1 earnings, with McDonald's franchisee Westlife Foodworld posting its results later this week.

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