Coffee Day Enterprises Limited, India’s largest coffee shop chain, reported a strong financial performance in the fourth quarter of 2020. This led to a surge in the share price of the company by over 6% in early trading hours on Friday.
The company’s revenue for the quarter ended December 31, 2020, stood at INR 655 crore, an increase of 10% YoY, whereas its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood higher at INR 111 crore, up 19% YoY. The company’s net profit stood at INR 4.4 crore after a loss in the same quarter in the previous year.
Coffee Day’s retail coffee chain, Café Coffee Day, operates in over 200 cities and towns across India, serving over 200,000 customers a day. Despite the challenges posed by COVID-19, the company managed to sustain its business by launching new products, expanding its delivery business, and introducing contactless ordering options.
In addition, the company’s vending business saw a profit of INR 3.3 crore in the quarter, compared to a loss of INR 0.6 crore in the same period last year.
The positive financial performance of Coffee Day has led to an increase in investor confidence, resulting in the share price rise. The stock closed at INR 31.50 on Friday, up 5.99% from its previous close.
The company also made a statement on Friday, saying that it has been working on various strategic initiatives to streamline its coffee and non-coffee businesses to focus on core operations and enhance profitability. Coffee Day will continue to focus on expanding its footprint through a mix of company-owned and franchised stores and investing in technology to enhance the customer experience.
In conclusion, Coffee Day’s strong financial performance in Q4 2020, coupled with its strategic initiatives, has resulted in an increase in investor confidence and a surge in its share price. The company’s future looks bright, and it will be interesting to see how it continues to navigate the challenges posed by COVID-19 while expanding its business.
