Jubilant Foodworks Q1 preview; Here's what you can expect

Key highlights: 

• Jubilant Foodworks revenue expected at 3% in Q1FY18
• Jubilant Foodworks operational revenue was up 6% in FY17
• Jubilant Foodworks PAT was down 76% in FY17

Share price of Jubilant Foodworks jumped over 1% as the company is set to announce its first quarter ended June 30, 2017 (Q1FY18) result later on Monday.

In FY17, Jubilant reported net profit of Rs 6.72 crore down by 76% year-on-year, while operational revenue was up by 5.63% year-on-year.

For FY17 performance on My 29, 2017 Shyam S. Bhartia, Chairman and Hari S. Bhartia, CoChairman, Jubilant FoodWorks Limited said, "“FY17 was a year which tested our mettle and posed unprecedented challenges. As a result, our top-line growth was adversely impacted in the quarter and the year."

Analysts have mixed views for the Q1 earnings of Jubilant Foodworks.

Jubilant's top-line growth is expected to be on a muted-level. Analysts at Motilal Oswal and Edelweiss Financial Services estimates revenue to grow by just 3% on year-on-year basis.

Abneesh Roy, Tanmay Sharma and Alok Shah analysts at Edelweiss said, “Dominos India’s SSG growth is expected to be ~2.0% YoY dip in Q1FY18 (on a base of 3.2% YoY dip; 7.5% dip in Q4FY17 on a base of 2.9% YoY) even though the company ran Everyday values and IPL being present in Q1FY18.”

Motilal sees same-store sales growth (SSG) to be likely down by 3% for this quarter.

On the other hand, analysts at Kotak Institutional Equities said, “We model 3% SSG and ~8% top-line growth aided by 'Everyday value offer'; we have modeled 15 Dominos store additions and no addition in DD.”

Going ahead, Motilal added, “Commodity inflation continues. We expect gross margin to contract 200 basis points YoY to 74.8%. EBITDA margin is expected to remain flat at 9.5% and EBITDA to grow by 3% YoY to Rs 59.5 crore.”

Edelweiss said, “Gross margins will be under pressure due to increase in raw material prices. Implementation of GST will lead to may lead to some disruption in the business.”

However, Kotak feels EBITDA margin to expand 150 basis points yoy, despite 130 basis points contraction in GM, aided by stringent cost controls.

Phillip Capital also stated gross margins to remain stable qoq and meanwhile EBITDA growth will be led by cost control.

Further Phillip mentioned earnings growth will be slightly lower than EBITDA growth due to higher depreciation.

Bottom-line (PAT) of Jubilant is seen at Rs 18.1 crore, down by 4.73% year-on-year but up by 21.47% on quarter-on-quarter, as per Motilal.

While, Kotak expects PAT at Rs 21.3 crore, increasing by 12.4% yoy and 44.7% qoq.