52-WEEK BLOCKBUSTER: Jubilant Foodworks

Jubilant FoodWorks (JFW) made quite the market debut in February 2010, ending listing day with a 60 per cent gain. The stock then embarked on a dazzling run, more than tripling its issue price. JFW benefited in part by virtue of having no competition in the listed space.

It operates in the lucrative quick-service food retail segment and has firmly established itself in the home-delivery market. This allows it to capitalise on leisure spends by both the sizeable youth and the family markets.

It utilised funds raised to expand its network of outlets, going from the 286 at the time of its public offer to the 364 at end-December 2010. It also used funds to trim debt; interest costs had eaten away a good four per cent of revenues. In the nine months ended December 2010, interest outgo dropped over 90 per cent.

Interest cost savings, together with a high same-store sales growth (39 per cent for March-December 2010), an expanding menu, widening market presence by tapping new cities and rapid store expansion helped JFW post a strong 62 and 133 per cent revenue and profit growth for the nine months ending December 2010.

Further buoying healthy prospects for the company are its plans to open stores in countries such as Sri Lanka where it has the license, besides exploring tie-ups with other international brands to widen product offerings.

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