Departure of Kaul Reversed the Fate of

Jubilant Food
Jubilant Foodworks today announced that Ajay Kaul,
Jubilant FoodWorks Chief Executive Officer (CEO) has
resigned from his position, to pursue opportunities
outside the company. Kaul's resignation happened at a
time when Jubilant Food, the master franchisee of
Domino's and Dunkin' Donuts in India disclosed a slip of
3.2 per cent in its same-store sales growth (SSG) for the
first quarter of the fiscal year 2016-17, lowest in seven
quarters. Analysts anticipate Kauls resignation to
profoundly affect Jubilants operations and impact the stock in the times to come.
The chief concern will now be who Jubilant brings on board as the next CEO.
As expected, Jubilant Food share price dipped sharply by 8%, intraday on Tuesday
on the back of Kauls resignation. The stock opened at Rs. 950.00 and the days low
till now is seen at Rs. 925.25. The opening price remained its days high value. As
the trading session commenced this morning, within the next thirty minutes,
approximately 13,88,161 shares exchanged hands with a traded value of Rs.
12,985.55 lacs. The stock volume spurted by more than 2.46 times.
At the BSE, Jubilant Food had tanked 10 per cent on September 6, owing to the
company's poor June quarter performance and has stayed muted since then.
Dwindling earnings, narrowing margins and growing competition have struck the
stock hard, which is seen to fall 48 percent from its all-time high of Rs 1,931
touched on September 8, 2015. Previously, Jubilant Food disclosed a 31.09 per cent
fall in stand-alone net profit amounting to Rs 18.99 crore as compared to a net
profit of Rs 27.56 crore in the corresponding period of the previous financial year.
Its total income from operations shot up by 6.69 per cent to Rs 608.91 crore during
this quarter versus Rs 570.68 crore in the year-ago period.

On Monday, Jubilant Food share price closed at Rs 1005.60 per unit on the NSE,
down 3.54 per cent. Kaul, an IIT as well as XLRI alumnus, was linked with Jubilant
Food since 2005. He will continue in his current role till March 2017, as per the
companys filling. Though the company showed no signs of appointing a new CEO,
yet it is expected that a new CEO will be announced soon.
Last April, the company had switched roles of Dev Amritesh, the President & Chief
operating officer (COO), Dunkin' Donuts India and Tarun Bhasin, Domino's Pizza
India, president & COO, to strenthen the business. Amritesh was identified as the
president & chief business officer (CBO) of Domino's Pizza India whereas Bhasin
was appointed the president & CBO, Dunkin' Donuts India. In spite of this,
Jubilant's (JFL) Q1FY17 results came below estimates because of 3.2% Y-o-Y dip in
same stores sales. It is the lowest SSG number in the past 7 quarters on the back of
muted consumer sentiment, the shift in Ramadan dates and delay in the launch of
new products.
Jubilant Food is one of the top 500 performing stocks for this quarter, analyzed by
Dynamic Levels research analysts out of the 1700 stocks listed on NSE. The stock is
considered as fundamentally healthy. With the announcement of the new CEO and
after the impact of the news subsides, it is hoped that the stock will gain
momentum and turn active again.

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Article Written by
Madhurima Chowdhury