The growth of Jubilant Foodworks is hard to miss
26-05-2014 • About Jubilant Foodworks (
$JUBLFOOD) • By InTwits
Jubilant Foodworks is an attractive growth stock in Restaurants industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Jubilant Foodworks showed fast growth in the last financial year. Jubilant Foodworks's revenue surged on 22.8% in FY2014. At the same time Jubilant Foodworks well managed its profitability and also showed EBITDA growth of 2.74% for the same period.
In the last 3 years Jubilant Foodworks showed fast revenue growth of 36.8% from FY2011 to FY2014 annually. EBITDA surged on 27.5% from FY2011 to FY2014 annually.
Jubilant Foodworks ($JUBLFOOD) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 25,677 | 6,783 | 10,189 | 14,141 | 17,360 |
|---|
| Revenue growth, % | | -73.6% | 50.2% | 38.8% | 22.8% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 658 | 1,205 | 1,904 | 2,433 | 2,499 |
|---|
| EBITDA growth, % | | 83.1% | 58.0% | 27.8% | 2.7% |
|---|
| EBITDA margin, % | 2.56% | 17.8% | 18.7% | 17.2% | 14.4% |
|---|
| Net Income | 330 | 717 | 1,033 | 1,311 | 1,182 |
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| Net Income margin, % | 1.28% | 10.6% | 10.1% | 9.27% | 6.81% |
|---|
| |
| CAPEX | 521 | 718 | 1,307 | 1,916 | 2,487 |
|---|
| CAPEX/Revenue, % | 2.03% | 10.6% | 12.8% | 13.6% | 14.3% |
|---|
| Debt | 86 | 0 | 0 | 0 | 0 |
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| Cash | 70 | 89 | 109 | 305 | 242 |
|---|
| Net Debt/EBITDA | 0.0x | -0.1x | -0.1x | -0.1x | -0.1x |
|---|
| |
| ROIC, % | 35.7% | 58.0% | 62.1% | 49.8% | 33.0% |
|---|
| ROE, % | 46.6% | 46.5% | 42.4% | 36.1% | 24.1% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the longer period the company showed big decline in EBITDA margin of 3.40 pp from 17.8% in FY2011 to 14.4% in FY2014.
Jubilant Foodworks shows attractive ROIC at 33.0% for the last 12 months which assumes stable development model. During the last three years it dropped - it was 58.0% in FY2011. Average ROIC for the last three years was 48.3%.
The company showed big decline in Net Income margin of 2.50 pp from 9.30% to 6.80% in FY2014. In the longer period Net Income margin dropped on 3.80 pp from 10.6% in FY2011 to 6.80% in FY2014.
Jubilant Foodworks operates at ROE of 24.1%. Average ROE for the last three years was 34.2%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.In FY2014 the company had CAPEX/Revenue of 14.3%. The company showed fast CAPEX/Revenue growth of 3.73 pp from 10.6% in FY2011 to 14.3% in FY2014. Average CAPEX/Revenue for the last three years was 13.6%.
Leverage (Debt)
Jubilant Foodworks has negative net debt at -0.1x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period the company's leverage surged on 0.02x from -0.07x in FY2011 to -0.10x in FY2014.
Valuation vs. comparable companies
At the end of trading day today Jubilant Foodworks traded at 29.3x EV/EBITDA which is 82.9% higher than 16.0x Restaurants peer group avearge calculated on the basis of 3 companies. At the end of trading day today Jubilant Foodworks traded at 62.0x P/E which is 97.9% lower than 2,887.1x Restaurants peer group avearge calculated on the basis of 2 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 5,716.7x EV/(EBITDA-CAPEX) which is higher vs. -13.2x Restaurants industry avearge calculated based on 1 company.
