Jubilant has expanded its portfolio into the biryani category. As per media articles, biryani is the most ordered food in India on food aggregator apps. Jubilant FoodWorks Limited, has entered into biryani's space under the brand Ekdum! The operation will offer a wide variety of biryanis from across India, including Hyderabadi nizami biryani, Lucknowi nawabi biryani, Dindigul biryani, Kolkata biryani, butter chicken biryani, egg biryani, Paneer makhani biryani and Tawa chicken biryani. In addition to biryanis, customers will be able choose from an extensive variety of kebabs, curries, breads, desserts and beverages. There will also be a selection of raitas and chutneys that will complement the food. The dishes from Ekdum! will be prepared in open kitchens maintaining the highest standards of hygiene.

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The starting price of the biryani will be Rs 99. Ekdum! began with three restaurants in Gurgaon for delivery, takeaway and dine-in, with more restaurants planned to open in NCR over the next few months.
As per management, "this foray is in line In line with our strategy of portfolio expansion. We are delighted to introduce Ekdum!, our new venture in the biryani category. We see strong potential in this segment and are confident that Ekdum!, with its sharp and differentiated proposition, will create a strong position for itself in the market.”

Interestingly, biryani has been the most ordered food item on the Zomato and Swiggy apps since 2017. Even during the lockdown, it continued its leading trend. In 2018, PWC-FICCI pegged the organized biryani delivery industry at Rs 2500 cr per annum. Paradise, Behrouz Biryani, Charcoal Biryani, Biryani Blues, Biryani by Kilo (BBK) and the Biryani Project are the key delivery players in the space.

Valuation Methodology and Risks:

Probability-weighted model: 30% bull / 50% base / 20% bear. Latent demand growth, moderate cost inflation and stringent cost control could drive earnings growth above the Morgan Stanley base case, hence higher weight for Morgan Stanley bull case. Spread of Covid-19 could delay recovery in consumption, so Morgan Stanley assigns a 20% weight to bear case. Morgan Stanley assumes cost of equity at 12.1% (6% risk-free rate, 6% risk premium, beta of 1), 6% terminal growth, 17.5 terminal multiple.

Risks to Upside:

Innovations in product offerings and effective marketing strategy combined with growth in overall chained food service business in India
Aggressive store launch strategy
Success of Hong's Kitchen model in India

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Risks to Downside:

SSSG trends remain weak
Competition from food aggregators and other food service categories
Rise in cost inflation changing consumer preferences