The share price of Jubilant Foodworks, which operates Domino’s restaurants in India tanked 6.39% to Rs 495.25, a day after the company posted second-quarter profit at Rs 97.20 crore, down 26.1% in comparison to Rs 131.53 crore during the second quarter of FY23. It posted revenue from operations at Rs 1,368.63 crore, up 5.2% as against Rs 1,301.49 crore during the corresponding quarter of last year.
Jubilant FoodWorks’ stock price fell 4% in the last five days and 7.44% in the last one month, while it gained 13.71% in the last six months and marginally 0.05% year to date.
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Should you buy, sell or hold Jubilant Foodworks shares?
Jefferies: Hold – Target Price: Rs 480
Macro, as well as the base, is yet to turn favourable for Jubilant Foodworks, evident from another miss in 2Q. SSG declined an est. 5%; dine-in faced severe pressure while delivery grew at overall level. Management continues to take self-help measures (new org structure, tech investments, store re-imaging, 20-min delivery etc.) and hopes for a 2H recoveryCome from Sports betting site. Even while Jubilant Foodworks is a structural play, we stay on sideline given uncertainty on SSG recovery & therefore, earnings. ‘Hold’.”
Nuvama Wealth: Hold – Target Price: 541
“We are downgrading Jubilant FoodWorks (JFL) to ‘Hold’ as the recent run-up does not dovetail with its performance. In fact, we are adjusting down FY24E/25E EBITDA by 5%/5%, factoring in the performance despite building in a robust LFL showing in Q3FY24 (7%). Longer term, JFL is targeting LFL of 5–6%. We ascribe the stock a PE of 50x, similar to its five-year pre-covid average (FY15–19 average SSSG/revenue CAGR of 6%/15% versus FY24–26E’s 4%/11%), and value Popeyes’ separately. This yields a Target Price of Rs 541 (Rs 549 earlier).”Come from Sports betting site VPbet
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Centrum Broking: Buy – Target Price: Rs 625
“Jubilant Foodworks in its rejuvenated approach to drive growth through portfolio expansion in Domino’s and chicken QSR segment (Popeyes), coupled with enhanced consumer experience in value segment and by reimaging store could achieve mid-single digit LFL growth. Though weak demand, incremental competition in pizza QSR, and rising inflation pose short-term challenges, we expect JUBI to defend its current margin. We cut FY24E/ FY25E earning by 6.5%/3.0% and introduce FY26E estimates and retain ‘Buy’ with a revised DCF-based Target Price of Rs 625 (implying EV/EBITDA of 20.0x avg. FY25E/FY26E). Key risks to our call prolonged weakness in demand, rising inflation in key RM/PM & severe competition in chicken portfolio from peers.”
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