Sri Lankans may not be willing to subsidize their pizza spends but auditor reports do highlight the risks.
Impairment of Investment in Subsidiary:
The Company holds investment in subsidiary located in Sri Lanka amounting to 11,153.67 lacs as at March 31, 2022 and has recognized provision for diminution of 2,793.00 lacs as on March 31, 2022.
Does anyone have the split between delivery sales and dine-in?
The current hammering of valuations is not overly done and actually needs to get much more kicked.
Latest result format is quite detailed.
If only we could know how the latest products like Gourmet etc. have been performing (being premium products)
Disc: Invested at around ~500 ( due to lack of insights in valuation analysis). Still this business is far superior than peers and I’m genuinely looking to see what new CEO can bring from past exciting experience.
Results: https://www.bseindia.com/xml-data/corpfiling/AttachLive/80090309-6d47-4ffc-b805-ca6a5a9151b7.pdf
Can u please throw some light on the profile of new CEO. And his previous achievements.
That would be helpful.
Disc : Planning to buy
Most initiatives I could find about him were from his prev workplace(mine current) and Mckinsey.
Khetarpal joined Jubilant FoodWorks after 6.5 years at Amazon, where he conceptualised, launched and scaled several businesses like Amazon Fresh, Amazon Food and Amazon Pharmacy.
During his 25 year-long career, he has worked in e-commerce and management consulting.
Prior to Amazon, Khetarpal served as a partner at McKinsey and Company, where he served several hi-tech clients on topics related to business building and transformation, and was instrumental in building data driven service lines used by several Fortune 500 companies.
He has also worked with GE Capital and Hindustan Unilever.
His ideologies lie in running several data based experiments and ensuring customer value is present , rather than optimising on profits. Many experiments might fail but they often bring out very crucial customer info that could never have even been thought of. His past projects have been on much larger scales than Jubilant so no worries there too. Only thing is his duration of stints . I expect another heartbreak like Pota’s.
HSBC Webinar recording: Jubilant FoodWorks Limited CEO & MD and CFO address investors in the HSBC webinar - YouTube
Can someone explain what is lease liability like a 10 yr kid?
Well, this is what ChatGPT says:
"Imagine you want to play with your friend’s toy car for a week. Your friend says it’s okay, but you have to give them one candy every day that you play with it. That candy you have to give every day is like a lease liability.
Now, let’s say you want to rent a house from someone. The rent you pay every month is like a lease liability. It’s the money you have to pay the landlord every month for the right to use their property. And just like with the toy car, if you don’t pay the rent, you might have to give the property back or face consequences.
So, lease liability is like an agreement to pay someone a certain amount of money over a period of time in order to use something that belongs to them."
If you want to know its impact on financials - thread on same https://twitter.com/soicfinance/status/1623335700811878402 from @Worldlywiseinvestors
So this means if in future jubilant foodworks fails to pay that candy( lease Liability amount) they have to stop using that property.
So can we say that lease Liability is like a long term debt and can it be repaid in upcoming quarters?
Or if they are taking stores on rent to expand their reach can this end up like future retail?
How what ratio can we use to make sure the ratios are healthy?
Hi,
I am trying to understand the reason for high Debt on the balance sheet when they have more than 1900 Crore reserves.
For aggressive expansion of stores, they could have used the reserves instead of borrowing money from banks.
I am trying to go through this thread to understand this, but unable to find exact reason.
Till March 2019, this was Debt free business. What is the reason for increase in Borrowings after that? I am trying to understand. With increasing interest rates, Would it be risky to pay the debt over next few years OR was it a low rate loan, which they can prepay easily.
Not Invested.
Debt is coming from lease liability from Ind AS.
I think this explains better https://twitter.com/ishmohit1/status/1614626218598608897
Accounting norms changed w.e.f. that year. As per new norms (Ind AS 116), lease liabilities have to be capitalised. So you will see lease liabilities on the Liability side and Right of Use assets on the Asset side suddenly coming up, which was not there in the previous year. You can compare the accounting policy for leases in the Notes to the Accounts for FY189 and FY20 and see the difference. This is just an accounting change but brings in more transparency in the financial statements. Change in accounting policy in mentioned in the financial statements for FY20 as shown below:
Hello,
Yes, this explains the situation.
As per my understanding these are not borrowings, but Lease liabilities which they need to pay over a period.
Some analysts are not mentioning this clearly in their reports, and mentioning that D/E ratio is quite risky and all that. I am surprised that they should mention it clearly as Lease liabilities which are being reported as Debt. This can be applicable in case of Hospitals, QSR, and few companies only.
Anyway, now the situation is clear to me.
Disc : Not Invested.
What are mechanisms in place to stop Dominos to take away the Master franchise from Jubilant Foodworks, I know they sign a 10-year contract but what stops them not renewing it again with Jubilant?
what will they achieve by not renewing? won’t they have to start from the scratch then?
There can be many incentives in Time for Dominos to let Jubilant Foodworks go, let’s say they want royalty fees from the current level and Adani or Ambani or TATA are ready to pay more, what is stopping Dominos from stopping that is what I am trying to understand, or any other corporate level issue which causes them to partway, I am not saying there is a considerable probability of it but there is a not so slight possibility of this happening in future.
Imo, it depends on the physical store network. If those can be directly transferred to Adani, Tata then Jf might not have much leverage.
Also, success of Popeyes and Hongs Kitchen will be crucial for jf in such a scenario to avoid dependency on Dominos.
As per my knowledge the stores belong to the franchise partner. So, if the agreement ends or terminated the brand owner doesn’t get access to the stores. I can recall that when Monginis had issues with their franchise partner Switz Foods in West Bengal, the agreement got terminated and Switz Foods converted all the shop into a new brand Mio Amore. As part of the resolution Monginis also was not allowed to reenter the market for a period of 3 years… So, its not that the franchise partners have no power. Also, no need to think that Jubilant can’t stand against the might of the Domino’s international. Jubilant is a powerful group in India and Indian regulation always favors local companies… remember how Lay’s lost its potatoes?
IMO the license not being renewed is not a realistic threat. Aside from the fact that any new partner will have to start from scratch, Domino’s globally also has a reputation to protect. I believe all their stores internationally are franchised, and changing franchise partners in any geographically randomly without cause will affect relationships and growth intention of other franchise partners globally.
