Shares of this consumer food stock under the ‘mid-cap’ category fell more than 2 percent after the Promoters of the company pledged 2.20 million shares. In the last six months, the company’s shares have gained more than 25 percent.
With a market capitalization of Rs 35,704.22 crores, the stocks of Jubilant Foodworks Limited closed at Rs 541.10 on Thursday representing a fall of around 2.50 percent as compared to the previous close of Rs 552.45 apiece.
The bearish sentiments around the company’s stock are witnessed after a regulatory filing published with the Bombay Stock Exchange (BSE) dated 27th September 2023 disclosing the pledge of shares from ‘Jubilant Consumer Private Limited’, the sole Promoter of the company.
On 21st September, the entity pledged 2.20 million shares equating to 0.33 percent of the equity capital to Bajaj Finance Limited as security for a loan availed by ‘Jubilant Enpro Private Limited’.
Having a quick glance at the financials reported, the company saw a decent improvement in its fundamental business parameters such as the operating revenues and net profits during the recent financial quarters.
The operating revenues increased from Rs 1,269.85 crores during Q4FY22-23 to Rs 1,334.54 crores during Q1FY23-24, and, the net profits, during the same time period, rose from Rs 59.59 crores to Rs 69.73 crores.
Due to increased operating expenses, the company’s profitability ratios have taken a hit with the return on equity (RoE) reducing from 24.92 percent during FY21-22 to 17.83 percent during FY22-23. Moreover, the return on capital employed (RoCE) decreased from 42.35 percent to 32.2 percent.
The company’s shareholding pattern, as per the latest quarter ended June 2023, shows the Promoters holding a 41.94 percent stake, and, the Foreign Institutional Investors (FIIs) holding a 25.22 percent stake in the company.
Jubilant Foodworks Limited, one of India’s largest food service companies, mainly operates under the brand name ‘Domino’s Pizza’ within & outside India. The company also has rights for ‘Dunkin Donuts’ in India, a food cafe offering various beverages.
Written by Amit Madnani
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