Jubilant FoodWorks- To Improve In Trajectory As Long-Term Competitive Advantages Are Intact: ICICI Securities

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ICICI Securities Report

Our optimism on Jubilant FoodWorks Ltd. is premised on-

1. loyalty program potentially driving higher order frequency (~15% of Domino’s customers account for ~56% of revenues – a classic marketing case of heavy-user dependency - which is good, in our view),

2. continued network expansion ahead of competition,

3. likely positive surprise in Popeye’s execution and ramp-up (consensus may start ascribing option value by FY24E),

4. lower incremental impact from fortressing (splitting of stores) strategy and

5. 24% underperformance versus Nifty over last 12 months.

We remain longstanding believers of quick service restaurant opportunity and Jubilant FoodWorks’ superior execution skills. We believe the company remains best positioned to realise industry tailwinds driven by-

1. already existing digital infrastructure and delivery capability and relationships,

2. lower competition thanks to industry consolidation (~25% of restaurants have closed as per National Restaurant Association of India) and

3. strong balance sheet.

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