Motilal Oswal has given Buy recommendation for Jubilant Foodworks recommended buy rating on the stock with a target price of Rs 720 in its research r with a target price of Rs. 720 in its research report issued on Aug 22, 2022

Motilal Oswal’s research report on Jubilant Foodworks

JUBI continues to build extensively on its three key moats of delivery expertise, supply chain efficiency and technological superiority. The emphasis on its ‘value for money’ proposition was also highlighted with the company choosing not to hike the price of its ‘Every Day Value (EDV)’ offering even as it took price increases on other parts of the portfolio. Management also indicated a good initial response to Popeyes with medium- term targets of 250-300 stores. We had highlighted in a detailed note earlier this month about: a) how Popeyes has fared globally, b) what JUBI brings to the table and c) why do we believe it is the most scalable among JUBI’s non-Domino’s businesses. Quick-service restaurants (QSRs) are our preferred picks to play the discretionary consumption growth story. JUBI, DEVYANI and SAPPHIRE are our top picks in this domain.

Outlook

The stock trades at 35.9x FY24 pre-IND AS 116 EV/EBITDA. While not inexpensive, we believe the company deserves premium multiples for the abovementioned reasons. We maintain our BUY rating and value the stock at 40x Jun’24E pre-IND AS 116 EV/EBITDA to arrive at our TP of INR720.

More Info

At 11:58 hrs Jubilant Foodworks was quoting at Rs 577.35, up Rs 12.80, or 2.27 percent.

It has touched an intraday high of Rs 580.70 and an intraday low of Rs 557.15.

It was trading with volumes of 90,970 shares, compared to its thirty day average of 175,917 shares, a decrease of -48.29 percent.

In the previous trading session, the share closed down 5.32 percent or Rs 31.70 at Rs 564.55.

The share touched its 52-week high Rs 915.49 and 52-week low Rs 451.60 on 13 October, 2021 and 12 May, 2022, respectively.

Currently, it is trading 36.94 percent below its 52-week high and 27.85 percent above its 52-week low.

Market capitalisation stands at Rs 38,096.16 crore.

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