The fate of Jubilant FoodWorks

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What is jubilant foodWorks?

Jubilant FoodWorks Limited is an Indian food delivery company which is based in Noida, Uttar Pradesh. It has the master franchise for the pizza fast food chain Dominos pizza and Dunkin donuts in India and the neighboring countries. Jubilant FoodWorks was formerly known as dominos pizza private limited and has a current net worth of $US 180 million. The stock price for each share of jubilant FoodWorks estimates around $29.89. 

Current scenario of Jubilant FoodWorks:

Jubilant FoodWorks is one of the leading promoters for dominos pizza and honking restaurant chains has decided to shut down about 105 non-profitable stores across India after it hit a major low in the first quarter of the year when the country went into complete lockdown for almost 86 days. The decision was taken after the stores were completely shut and went into loss released in FY21 Q1 data. However, it reconsidered the fact for opening 100 more outlets that will strictly deal with takeaways and deliveries rather than dine-in due to the impact of the COVID-19 situation. The COVID-19 pandemic has impacted various industry sectors but has been a complete loss show for the food deliveries and restaurant business. The company has decided to shut only unprofitable stores from which Dunkin donuts stay on the top. As of now, jubilant FoodWorks owns more than 1242 stores for dominos pizza in India. The company later said in a statement that the chefBoss brand will be selling sauces in an alliance with Amazon supermarket, Flipkart groceries, and other e-grocery stores in the areas such as Bangalore and Mumbai. 

The figures released by the company for the FY21 Q1 data is significantly low and the revenue is decreased by almost 60%.

Facts and figures about jubilant FoodWorks during the global pandemic:

the numerical data which was released by the company showed a heavy loss during the first quarter causing a loss in revenue for about 60% estimated to be around 75 crore INR. 

The stock which was trading at 2,242 has hit an intraday low of 2,204. The global research firm has downgraded the stock to underperform. But it is said that the stock price is likely to regain its pace in Q4 FY21. Hopefully, sales will be the major deciding factor in that.

The dine-in demands by the customers have created an added pressure on the firm and the gains by July/august have been seriously encouraging for the company to serve its customers at its best.

In the fourth quarter, 24 new dominos outlets were added with a total of 4 Dunkin donuts outlets were closed which added 19 net outlets after the whole math.

The staff cost fell 18.9% making the cost to 1.6 billion INR.

EBITDA (earnings before interest taxes depreciation and amortization) decreased by 29%.

The total revenue generated by the company was 300 million and the loss was about 540 million INR. These figures are huge when compared to the regular working of the stores. 

The net profit before the pandemic was 734 million INR which was reduced to 300 million INR post the COVID-19 pandemic. And the global pandemic still has not averted and shows signs of no relief for the food sectors.

The restaurants can only dwell upon takeaway and deliveries as the dine-in services have still been closed by the governments taking into account of the social distancing norms that were given as the strict guidelines for every business to follow.

Measures taken by Jubilant FoodWorks to curb the losses encountered during the pandemic:

Cost optimization measures such as employing fewer people, re-negotiation of the rents, and lowering operating costs have been few of the measures that are being considered. 

Dominos pizza is one of the largest fast-food selling chains and helped 78% of the food sectors to resume their working by June. The figures and the cost is said to return to normal before the year ends as the graph is continuously growing. 

A total of 105 stores are all set to be closed so that 100 new stores can be opened which will be profitable to the company as a whole. 

Call takeaways are encouraged in place of dining in

Due to the unseen disarray caused by the coronavirus about 20-30% of stores are expected to shut down.

The shares of Jubilant FoodWorks have reached a high of 2,231 which was increased by 3.86 % recently.

While jubilant FoodWorks managed to get back most of its earnings back on track there is a whole lot of work that needs to be done to get back in business. Otherwise, it would not take a blink of an eye to drown twice as fast as it rose to achievements becoming one of the leading brands in a short period.

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