Jubilant FoodWorks launches biryani biz with ‘Ekdum!’; stk hits record high

By | December 17, 2020

Shares of surged 4.4 per cent and hit a fresh record high of Rs 2,793 on the BSE on Thursday, after clocking an 8-per cent in the past two trading days, after the company entered into the biryani segment with a new brand ‘Ekdum!’ as part of its portfolio expansion.

The largest foodservice company in India on Wednesday announced that it has entered into the ‘most-loved food space’ of Biryanis with its newest brand – Ekdum!

“Ekdum! will offer the widest variety of biryanis from across India to choose from. The chefs at Ekdum! have brought together a selection of twenty different biryanis curated from various parts of India using authentic ingredients that bring out the unique flavours and signature tastes associated with the region,” said in a press release. READ HERE

Ekdum! will be affordably priced, with biryani prices starting from Rs 99, offering unbeatable value for money to customers. Ekdum! starts with three restaurants in Gurgaon for Delivery, Takeaway and Dine-In, with more restaurants planned to open in NCR over the next few months, it said.

While an accurate estimate of overall (dine-in + delivery) market size is not available, analysts at Kotak Institutional Equity peg the Biryani delivery market at Rs 3,000 crore.

Prima-facie Kotak Institutional Equities find Ekdum!’s pricing attractive. It also believes Biryani economics would likely be comparable to Domino’s once critical scale is achieved; and that the key difference between Domino’s and Ekdum! would be kitchen dynamics.

has pushed structural improvements during the pandemic and transformed into a leaner execution engine. This, along with easing competitive intensity and net cash of over Rs 800 crore and healthy OCF puts the company in a sweet spot,” they said in a note dated December 17.

The template/platform, it says, is in place to accelerate store additions to 100-125/year in Domino’s and 30- 40 aggregate between HK and Ekdum!. “We believe there is room for JUBI to step up aggression and investments,” it added with an ‘Add’ rating on the stock with a target price of Rs 2,700.

Jubilant FoodWorks has been the biggest success story in the Indian quick service restaurant (QSR) industry in terms of growth with its delivery-based business model. It offers the highest margin and best return-ratios amongst peers, according to Motilal Oswal Financial Services.

Post-Covid-19, the company’s longer-term prospects appear even brighter with faster shift toward organized players in the Indian Food Service Industry, key domains of delivery and takeaway gaining further traction, and an increased usage of technology by customers, which facilitates growth of players like Jubilan FoodWorks. The introduction of delivery charges (without any negative feedback on ratings) and closure of 105 least profitable stores are factors driving structural margin improvement, the brokerage firm said in a recent report.

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