Jubilant FoodWorks Q2 Results Review - Sustained LFL Growth; Maintain 'Buy': Dolat Capital

Dolat Capital Report

Jubilant FoodWorks Ltd.'s Q2 FY25 revenue and Ebitda were in line our estimate. Dominos posted +2.8% like-for-like aided by delivery LFL of 11.4%. However, 5.6% revenue decline in dine-in channel restricted growth.

Ebitdam expanded by a mere 10bps led by decline in employee cost and other expenses. However, gross margin contracted by 370 bps YoY to 72.5% due to lower gross margin from Turkey business. Nevertheless, we are optimistic that Project Vijay will facilitate gross margin recovery moving forward. Additionally, an anticipated improvement in LFL would help expand margins.

We maintained our FY25/26E Ebitda estimate as Q2 performance was in line. However, we have downward revised our EPS estimates to factor in higher depreciation and interest expenses linked to addition of new stores. Maintain ‘Buy’ rating with a revised target price of Rs 730 (Rs 727 earlier) valuing the domestic business at 26 times FY27E EV/Ebitda and international business at 14 times EV/Ebitda.

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