- Jubilant Foods results beat with higher same store growth (SSSG) at 4.9% (vs estimate of 4%) ed by strong momentum for delivery as dine-in operations continued to face pressure.,

- Longer term key challenges remain: sales per average store has grown a mere 1% CAGR since FY13, while their operating costs have inflated at 17% CAGR. With management announcing 60 additional stores in 2H increasingly in smaller towns, SSG to slowdown eventually.

- Margin performance was better than expected despite significant inflation in raw material (which seems to have peaked out) and manpower costs aided by targeted lower promotions and improved delivery efficiencies. Gross margin expanded ~70bps y/y but EBITDAm declined ~30bps y/y on increased rental, staff costs and other expenses. Management noted good consumer response for the new beverage launches which are margin accretive. To counter manpower cost inflation, Jubilant has focused on leveraging technology (GPS tracking of riders), better employee hiring, training and manpower retention.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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