Store expansion gathers pace: JUBI’s 4Q print was in line with expectations. Store openings have been greater than anticipated and ahead of guidance: 50 new Domino’s retailers (gross) in 4Q (134 in FY2021 versus guidance of one hundred). JUBI is properly placed to accelerate Domino’s shop network expansion and investments in new brands present optionality. We think JUBI has the prospective to transition into a multi-brand QSR with unparalleled network positive aspects. The firm is enhancing organizational capabilities— current strengthening of the management group is a step in that path. Obtain.
4QFY21 – Steady quarter with in-line income and marginal miss on profitability: Revenue grew 14% yoy to Rs10.3 bn in-line with our estimate (+9% 2-year CAGR). Delivery channel grew 28.7% yoy and takeaway grew 76.9% yoy. SSSG stood at 11.8% method sales recovered to 114.8% in 4Q. With Covid-19 second wave, method sales slowed down to 94.4% and 87.7% in April and May-2021 respectively (versus April 2019 and May 2019). Gross margin stood at 77.5% (KIE: 77.7%). Gross profit grew 19% yoy and 10% on 2-year CAGR basis. EBITDA stood at Rs2.5 bn (KIE: `2.6 bn), 6% beneath our estimate partly due to greater than estimated shop openings. On 2-year CAGR basis, EBITDA grew 30% (reported) and about 9-10% on LFL basis adjusted for Ind-AS 116 adoption. EBITDA margin at 24.3% (KIE: 25.6%) was up 540 bps yoy and down 210 bps qoq. Employee expenses improved 2% yoy and other expenditures (ex-rent) improved 12% yoy. Net profit was at `1.04 bn (KIE: `1.07 bn). Cumulative app downloads improved to 57.3 m (+ 6.1 m qoq). Online ordering stood at 98.2% in 4Q, steady qoq, up +960 bps yoy. Mobile ordering inside on the web order stood at 97.4 in 4Q, +130 bps yoy.
Store expansion, new brands, personal app targeted traffic and profitability: JUBI management referred to as out acceleration in Domino’s shop additions— it is targeting at least 134 new retailers (gross) in FY2022 notwithstanding the second wave of the pandemic. We anticipate 150+ net new retailers/year thereafter versus the Street’s and our earlier expectations of about 120-125 and 135-140 retailers, respectively.
We model greater shop development and revise FV to `3,400 (from `3,200): We raise shop development, tweak estimates and revise FV to `3,400 `2,950 from Domino’s (50X Jun-23E PE, ex-Ind-AS 116) + solution worth of `450 from new brands/ investments.