Coffee Day Enterprises reported mixed set of number for Q4FY18. Consolidated revenue for the company grew by 26.5% yoy to Rs1,130.3cr. Though the gross margin for the company expanded, higher logistics cost led to lower EBITDA growth of 18.7% yoy to Rs179.5cr. EBITDA margin contracted by 104bps to 15.9%. Higher depreciation, interest and tax led to profit erosion. Reported PAT before share of equity accounted investees declined to loss of Rs0.1cr against Rs7.4cr profit in Q4FY17. Share of profit from equity accounted investees for the quarter was up by 93.3% yoy leading to adjusted PAT growth of 36.4% to Rs34.5cr.
The strong revenue growth was led by broad based growth across verticals. Coffee and related business segment grew by 15.3% yoy, logistics by 39.8% yoy and financial services by 41.1% yoy. However, the operating performance was not encouraging. EBIT margin contracted by 87bps, 458bps and 468bps yoy for coffee and related business, logistics and financial service, respectively.
Net debt as at FY18 stood at Rs3,200cr and there are no plans to reduce the debt in near term ans company is focussed on expansion as of now. The total capex in FY18 stood at Rs186cr.
The subsidiary, Coffee Day Global (CDGL), the coffee business reported 4.5% yoy revenue growth with 176bps EBITDA margin expansion to 15.8%. PAT grew by 17.9% to Rs8.1cr.
SSG for the quarter stood at 8.2% yoy, higher than the 6-7% range reported in recent quarters. However, the other players like Jubilant Foods and Westlife Development have reported strong double digit growth of 26.5% and 25.1% respectively.
Revenue mix at its café network stood at - food - 34%, beverages - 61% and merchandise - 5%.
CDGL’s gross café addition in FY18 stood at 135, and net was 40 cafes, taking the total count to 1,722. The management plans to open a similar number of stores in FY19E and refurbish 150-175 stores per year over the next few years.
CDGL continues to lead in the vending machine segment with total ~47,750 machine installed as on FY18 (added 8,000 machines in FY18). The management has guided to add more than 7,000 machines in FY19E.
CDGL’s ECBs are not fully hedged and the company incurred a forex loss of Rs9cr in Q4FY18 due
to MTM of ECBs.
CDGL has taken a price increase of 4.5% in April 2018.
Currently, CDGL offers delivery through third party in eight cities across 345 cafes. The delivery revenue of respective cafes is in the range of 8-9%, which company expects to increase to 20% in next few years. The management also intends to widen the network of cafes that offer delivery.
Coffee Day Enterprises Ltd ended at Rs. 315.45, up by 0.8 points or 0.25% from its previous closing of Rs. 314.65 on the BSE.
The scrip opened at Rs. 313.10 and touched a high and low of Rs. 322.90 and Rs. 312 respectively. A total of 2,79,964 (NSE+BSE) shares were traded on the counter. The stock traded below its 100 DMA.
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