Cash Crunch impact: Jubilant Foodworks' Q3 net profit down 32%

Jubilant Foodworks reported 32% year-on-year decline in its net profit for third quarter ended December 31, 2016, citing liquidity crunch pushed by demonetisation as a main reason.

The company reported net profit of Rs 19.97 crore, down by 31.93% compared to Rs 29.34 crore in the corresponding quarter of the previous year. The net profit was also down by 7.37% from Rs 21.56 crore recorded in the preceding quarter. 

Total income from operations stood at Rs 658.83 crore, which was up by 3.92% year-on-year (YoY) and 1% quarter-on-quarter (QoQ).

Shyam S. Bhartia, Chairman and Mr. Hari S. Bhartia, Co- Chairman, Jubilant FoodWorks Limited said, “Q3 has been a challenging quarter for the consumer sector on account of currency demonetisation. However, we were able to minimise the impact by offering multiple non cash payment options to customers and launch of new products which got excellent customer response.”

This Q3, the operating profit (EBITDA) was at Rs. 64.1 crore. In this regard, Jubilant Foodwork said, “Impact on account of demonetisation which caused stress in consumption.”

Ajay Kaul, CEO, Jubilant FoodWorks Limited said, “Q3 FY17 mirrored the challenges faced by economy related to liquidity crunch. However, being part of the organized space along with our continued thrust on digitisation, gave us the requisite agility to accept online payments and thereby contain the impact as the sector migrated to more and more cashless payment modes."

In Q3, Jubilant opened 32 new Domino’s Pizza and 1 new Dunkin’ Donuts restaurants. Same period last year, the company had opened 40 new restaurant.

Despite decline in net profit, share price of Jubilant Foodworks surged over Rs 82 or 8.93% on BSE, trading at Rs 1001 per piece.