JUBILANT

FOODWORKS LTD

Presentation by Group 27
 AKNOWLEDGEMENT

We would like to express our sincere gratitude to Dr. Nivedita

Sinha, for giving us an opportunity to work under her for this
assignment and taking her valuable time to provide us with the
required guidance wherever required. We would like to thank her
for providing us with such a wonderful opportunity to apply our
course knowledge on real-life data and get hands-on experience.
We are indebted for all her help and guidance throughout the
course and this assignment.
 GROUP MEMBERS
SI.NO NAME ID

1 ADITHYAN K A 2021A4PS2989H

2 MATHEW THOMAS 2021A8PS2955H

3 RHEVA FRANCIS 2022A8PS1544H

4 VAISHNAVI KATRAGADDA 2022B3A10783H

5 VARUN ROHIDA 2020A4PS2236H

6 RIDDHI KHANDELWAL 2022A5PS1266H

7 MAANYA SAIKIA 2022B3A81654H

 OBJECTIVE
To calculate the cost of capital for the
listed firm JUBILANT FOODWORKS
LTD over the period starting from May 1,
2019, and ending on April 1, 2024
(1/5/2019-1/4/2024).

To provide a concise overview and

assessment of JUBILANT
FOODWORKS, covering its market
capitalization, type of services, board of
directors, and shareholding pattern.
 INDUSTRY OVERVIEW
The Indian food service industry is a diverse and rapidly growing sector encompassing various businesses involved in the preparation, serving, and selling of food and
beverages to consumers. Here's a brief overview:
1.Market Size: The Indian food service industry is one of the largest and fastest-growing segments of the country's economy. It includes a wide range of establishments, from
small street vendors to high-end restaurants and international food chains.
2.Segmentation: The industry is segmented into various categories such as:
•Restaurants: Includes fine dining, casual dining, and quick-service restaurants.
•Cafes and Coffee Shops: Serving a variety of beverages and light snacks.
•Food Trucks and Street Food: Offering convenient and affordable options on the go.
•Catering Services: Providing food for events, parties, and gatherings.
•Food Delivery: Facilitating the delivery of meals to consumers' homes through online platforms.
3.Cultural Diversity: India's rich cultural heritage is reflected in its food service industry, with each region offering its own distinct cuisines and culinary traditions. From North
Indian curries to South Indian dosas and street food specialties, there is a wide variety of options available to consumers.
4.Rapid Urbanization: Urbanization and changing lifestyles have fueled the growth of the food service industry, particularly in urban centers where people often dine out or
order food for convenience.
5.Technology Adoption: The industry has seen significant adoption of technology, with the rise of online food delivery platforms, mobile apps for restaurant discovery and
reservations, and the use of digital payment systems to enhance convenience for consumers.
Overall, the Indian food service industry is a dynamic and vibrant sector that continues to evolve to meet the diverse needs and preferences of consumers, presenting
opportunities for entrepreneurs and businesses to thrive in this space.
 About jubilant foodworks

Jubilant FoodWorks Limited is one of India's leading food service companies and the master franchisee of Domino's
Pizza in India, Sri Lanka, Bangladesh, and Nepal. Here's an overview of Jubilant FoodWorks:

Company Background: Jubilant FoodWorks was incorporated in 1995 and began operations in 1996. It is
headquartered in Noida, Uttar Pradesh, India. The company operates under the brand name Domino's Pizza in
India and other South Asian countries.

Financial Performance: Jubilant FoodWorks has demonstrated strong financial performance over the years, driven
by robust sales growth and operational efficiency. It continues to focus on enhancing shareholder value through
strategic investments and expansion initiatives.

Overall, Jubilant FoodWorks is a prominent player in the Indian food service industry, known for its strong brand
presence, wide network of stores, and commitment to quality and customer satisfaction.
Types of services
Domino's Pizza Franchise: Jubilant FoodWorks holds the exclusive rights to develop, operate, and franchise Domino's Pizza
outlets in India, Sri Lanka, Bangladesh, and Nepal. It operates a vast network of Domino's Pizza stores across these countries,
offering a wide range of pizzas, sides, beverages, and desserts.

Menu and Offerings: Domino's Pizza is known for its diverse menu of pizzas, including classic options like Margherita and
Pepperoni as well as innovative varieties like the Farmhouse, Mexican Green Wave, and Cheese Burst. The company also
offers a range of sides such as garlic bread, pasta, chicken wings, and desserts like lava cake and butterscotch mousse cake.

Expansion and Growth: Jubilant FoodWorks has experienced rapid expansion and growth since its inception. It has
continuously expanded its footprint by opening new stores, reaching customers in both urban and semi-urban areas. The
company has also introduced various initiatives and marketing campaigns to drive sales and enhance brand visibility.

Technology and Innovation: Jubilant FoodWorks has embraced technology and innovation to enhance customer experience
and streamline operations. The company offers online ordering through its website and mobile app, allowing customers to
customize their orders and track delivery status in real-time. It has also implemented advanced supply chain management
systems to ensure efficient delivery of fresh ingredients to its stores.

Corporate Social Responsibility (CSR): Jubilant FoodWorks is committed to corporate social responsibility and has undertaken
various initiatives in areas such as education, healthcare, and environmental sustainability. The company supports programs
aimed at empowering communities and promoting social welfare.
Jubilant Foodworks Market
Capitalization(JUBLFOOD.NS)

As of April 2024 Jubilant

FoodWorks has a market cap of $3.58
Billion.
The market capitalization, commonly
called market cap, is the total market
value of a publicly traded company's
outstanding shares and is commonly
used to measure how much a
company is worth.
This makes Jubilant FoodWorks the
world's 3171th most valuable company
by market cap
Board of directors
Shareholding Pattern
Shareholding pattern

1.Promoters pledge remained unchanged at 0.79% of holdings in Dec 2023 qtr.

2.Promoters holding remains unchanged at 41.94% in Dec 2023 qtr.
3.FII/FPI have increased holdings from 26.14% to 27.75% in Dec 2023 qtr.
4.Number of FII/FPI investors decreased from 663 to 644 in Dec 2023 qtr.
5.Mutual Funds have decreased holdings from 15.54% to 15.41% in Dec 2023 qtr.
6.Number of MF schemes remains unchanged at 29 in Dec 2023 qtr.
7.Institutional Investors have increased holdings from 48.50% to 49.89% in Dec 2023
qtr.
3.
Comparable firms with
unlevered beta values

BARBEQUE NATION HOSPITALITY LTD = 1.654

COFFEE DAY ENTERPRICES LTD = 0.5052

RESTAURENT BRANDS ASIA LTD = 0.4845

SPECIALITY RESTAURENT LTD = 1.9958

Risk free rate estimation 7.1%
We have considered the average weekly yield of 10-year treasury bonds
for the past three years, from 01-04-2019 till 01-04-2024

Beta for JUBLFOOD stock = 0.9639 and Jubilant Foods ltd returns
significant at 3.4%
 Cost of debt estimation 8.6%
We used the interest coverage ratio to determine a synthetic rating for the
firm. The rating helped us determine the interest rate spread which can
be added to the risk-free rate to determine the cost of borrowing.

Interest Coverage Ratio for jubilant foodworks = 5.97%

Spread for jubilant foodworks = 1.5% (A+)

Market value of equity
=298334.633
COST OF DEBT = RISK-FREE RATE + SPREAD
WACC Calculation
A firm’s Weighted Average Cost of Capital (WACC) represents its blended cost of capital across

all sources, including common shares, preferred shares, and debt. The cost of each type of

capital is weighted by its percentage of total capital and then are all added together.

WACC = (E/V x Re) +((D/V x Rd) x (1 – T))

Here,

●T stands for tax rate,

●Re stands for cost of equity

●Rd stands for cost of debt

Top Down approach

Cost of equity =10.9%

WACC =10.6%
Bottom Up approach

Cost of equity = 10.894%

WACC =10.6%
 Links to Python code

● RBA -
https://colab.research.google.com/drive/1hPjeo2HKWwmbwXhDa3_086j5-KMiD7hy
● JUBLFOODS -
https://colab.research.google.com/drive/1JiZLbNl_qnUw59Ht9nkONUI1K65NT9B3
● Barbeque - https://colab.research.google.com/drive/1Lkmnbjw2tmy6R-
YUQrQayMgNDW5ejXs7
● COFFEEDAY -
https://colab.research.google.com/drive/13HzZU2LsNIDRmDYcyxr37gYzD9iJWJwl
● SPECIALITY -
https://colab.research.google.com/drive/1yCQ9XPrkxuzWTs_skoDmU7UcIVd3s2XN
 CONCLUSION
In this project, our objective was to compute JUBILANT FOODWORKS LTD cost of capital using two
distinct methods: the Top-Down approach and the Bottom-Up approach. This process also entailed
determining the company's capital structure and calculating the Cost of Equity and Cost of Debt.
The Top-Down approach involved conducting a regression analysis of the company's stock returns
in comparison to market returns to ascertain the Beta, which was subsequently employed to
determine the Cost of Equity and, consequently, the Cost of Capital.
Conversely, the Bottom-Up approach necessitated an examination of the company's industry peers
to identify an Industry Beta. This Beta was then adjusted based on the company's specific financials
to calculate the Cost of Equity and the Cost of Capital.
To calculate the Cost of Debt, we employed the firm's Interest Coverage Ratio, which helped assess
its ability to consistently meet its interest obligations. Subsequently, we determined the Credit
Spread using the provided data, which was added to the Risk-Free Rate to arrive at the Cost of
Debt.
 REFERENCES

https://www.moneycontrol.com/financials/jubilantfoodworks/ratiosVI/JF04

https://trendlyne.com/equity/share-holding/701/JUBLFOOD/latest/jubilant-
foodworks-ltd/

https://in.investing.com/rates-bonds/india-10-year-bond-yield-historical-data

https://www.jubilantfoodworks.com/about-us/leadership

https://companiesmarketcap.com/jubilant-foodworks/marketcap/