Coffee Day Enterprises reported a mixed set of numbers for Q2FY19. The company's consolidated revenue in the quarter grew 11.6% yoy to Rs979.7cr. Though the gross margin for the company expanded significantly by 715bps yoy, higher logistics and employee cost led to lower EBITDA growth of 8.3% yoy to Rs147.3cr. Also, EBITDA margin contracted marginally by 46bps to 15%. Further, higher depreciation and interest outgo led to PBT of mere Rs0.1cr in Q2FY19 against Rs11.3cr in Q2FY18. The share of profit from equity-accounted associates for the quarter was up 79.2% yoy to Rs34.8cr. Reported PAT was 59.8% lower yoy on account of Rs53.2cr worth exceptional item in the base quarter on account of equity stake sale in Global Edge Software Ltd.
Revenue growth was led by growth in logistics and financial services, which grew 45.5% and 9.3% yoy, respectively.
Coffee and related business segments reported a decline of 4.3% yoy to Rs429.5cr. EBIT for the segment was up 13.6% with 307bps expansion in the EBIT margin.
EBIT margin contracted 512bps and 23bps yoy for logistics and financial segments, respectively.
The subsidiary Coffee Day Global (CDGL) reported flat revenue on a yoy basis with a 107bps expansion in EBITDA margin to 17.6%. PAT declined 9.2% yoy to Rs8.2cr.
SSG for the quarter stood at 11.1% yoy against 6.8% in Q2FY18 and 10.4% in Q1FY19. However, other QSR players like Jubilant Foods and Westlife Development have reported strong double-digit growth of 20.5% and 25.7%, respectively, for the quarter.
As of September 2018, the Cafe network stood at 1,758 across 247 cities in India. The company added 30 cafes during Q2FY19. Further, average sales per day (ASPD) grew 12% yoy (ex-GST impact) to Rs15,277 during the quarter.
CDGL continues to lead in the vending machine segment with a total of 51,594 machines, having added a gross of ~2,608 machines during Q2FY19.
The company has announced the potential restructuring of its business to segregate the coffee business of the company and its subsidiaries from their non-coffee business. The board has approved the appointment of financial, tax and legal advisors for the same. There is no decision on the same yet and the company would make a disclosure if there is any development.
Coffee Day Enterprises Ltd ended at Rs293.90, up 7.8 points, or 2.73%, from its previous close of Rs286.10 on the BSE. The scrip opened at Rs289 and touched a high and low of Rs302.20 and Rs289, respectively. A total of 10,49,777 (NSE+BSE) shares were traded on the counter. The stock traded below its 200-DMA.
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