Coffee Day Enterprises Ltd's Q2FY19 consolidated net profit declines 59.8% yoy to Rs23.8cr

The company’s consolidated revenue in the period stood at Rs979.7cr, up 11.6% yoy and 1.4% qoq.

Nov 14, 2018 11:11 IST India Infoline Research Team

Coffee Day Enterprises Ltd Q2FY19

Consolidated Results Q2FY19: (in Rs cr)

Q2FY19 YoY (%)
Revenue 979.7 11.6
EBITDA 147.3 8.3
EBITDA Margin (%) 15.0 [46]
Reported Profit 23.8 [59.8]
***EBITDA margin change is bps
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.

Technical View:

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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