Thread by @BeatTheStreet10

After Understanding QSR Industry, let's take a deep dive into the companies of this sector.

We are starting with the #Jubilantfoodworks, The only profitable company in QSR space along with highest RoCE.

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Jubilant FoodWorks Limited (JFL/Company) is part of the Jubilant Bhartia group and is India’s largest food service Company. The Company has the exclusive rights to develop and operate Domino’s Pizza brand in India, Sri Lanka, Bangladesh and Nepal.

Mr. Shyam Bhartia & Mr. Hari Bhartia are the founders of Jubilant Bhartia Group.
The Jubilant Bhartia Group, has a strong presence in diverse sectors.Jubilant Bhartia Group has 4 flagship Companies- Jubilant Pharmova, Jubilant Ingrevia, Jubilant FoodWorks and Jubilant Industries

Their Family Chart👇

Their shareholding pattern and changes in shareholding pattern.
Promoters are holding 41%
FII 40%
DII 12%
PUBLIC 7%

Brands
Domino's Pizza
In 1996, the first Domino’s Pizza store was opened in New Delhi. After that in 2012, launched Dunkin' Donuts.
Now they also entered in Chinese cuisine via Hongs Kitchen and Biryani via "Ekdum". Majority of there expansion pertains to Domino's only

Let's understand Domino's :
largest among QSRs – both in terms of the number of stores (1,435 stores and ~1,485 stores across all brands at the end of 2QFY22) and overall sales (higher than the next three QSRs put together).

The opportunity for growth is humungous. Its revenue stood at ~1% of the FSI in India and ~2.5% of the
organized FSI market.
EBITDA Margins also expanding and can go upto 25%.
RoE & RoCE also remain strong for Jubi.

They also cover almost 300 cities with increasing expansion of Homegrown Hongs Kitchen as well.
They are expanding but with caution because of burnt hands in dunkin' Donuts.

The company is aggressively focusing on increasing the market presence of Domino’s. As Domino’s is the main segment of the company therefore the company has doubled the number of Domino’s restaurants over last few years.
Guidance for network also increased from 2k to 3k.

One Metrics to be check for QSR is SSSG : same store sales growth, currently it is negative due to Corona, but sooner it will reach to 15-16% again as the economy open up.

Operating margins will remain in the increasing order as we can see that in last 10 years, margins increased from 15% to 25%.
Check out the cost breakup👇

Due to Lockdown the restaurants temporary closed which affected the sales of the company for FY21.
Further the lockdown hours also acted negative for the company. As a result the company reported negative growth in revenue and profits.

Oppertunities : Cash rich, expanding cuisines, established market position, healthy financials

Risk : Decreasing Donut division, Increasing competition

Some Growth prospects we can't ignore : Delivery Signals & their tech driven approach.
Their app downloads are fastest in the Qsr segment as well their availability on agreegator approach increase there availability.

Fastest Delivery and decreasing dine-in need after Corona, also helping Qsr to expand fast further, as unit economics favours them.
As explained in the QSR Thread.

Peer comparison
Trading at P/E of 95, cmp/sales of 9.6, where devyani trading at 19, which is far higher than jubilant and recent fall in jubilant also makes it attractive at this level.

This is about our first detailed analysis on QSR Segment.
Src- MOSL, PA Wealth

#QSR
#BeatTheStreet
#QSRwithBeatTheStreet

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Check out our earlier thread!!