The current hammering of valuations is not overly done and actually needs to get much more kicked.
- Current OPM margins are over-earning (borrowed from SOIC) and are not sustainable. They will revert back to 13-17% range. Opposite rationales most welcome.
- Commodity prices are really high.
- As mgmt themselves honestly acknowledged. Dominos is not 1st choice in Tier1 & 2 towns. Good room for improvement in dine in conditions and value for money intangible brand improvement.
- Will probably end the year flattish.
- Currently trading at 24x mcap/profits (abnormal), real should be ~33x(sustainable)
Latest result format is quite detailed.
- Stores will only be split depending on customer experience, not just for profitability. Crucial amazon principle reflection.
- Number of stores for Dunkin, Hong & Ekdum reduced . These are just not working well for us. Popeye (new 4) on the other hand has people finger lickin’ good with a good backward integration strategy working as well.
If only we could know how the latest products like Gourmet etc. have been performing (being premium products)
Disc: Invested at around ~500 ( due to lack of insights in valuation analysis). Still this business is far superior than peers and I’m genuinely looking to see what new CEO can bring from past exciting experience.
Results: https://www.bseindia.com/xml-data/corpfiling/AttachLive/80090309-6d47-4ffc-b805-ca6a5a9151b7.pdf
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