Prabhudas Lilladher has given Accumulate recommendation for Jubilant FoodWorks with a target price of Rs. 3600 in its research report issued on Feb 02, 2022
Prabhudas Lilladher’s research report on Jubilant FoodWorks
We are cutting FY22/23/24 EPS by 5.5/12/12.7% following disappointing results in 3Q22. Eventhough JUBI accelerated store openings by adding 75 Dominos in current quarter, LFL sales disappointed as were System average sales per store despite IPL/T20 world cup. We believe that 3rd wave impact in last 15 days could not be the only reason as Delivery Apps like Zomato and Swiggy had bumper Chrismas and New year orders and Dominos has been a delivery dominated business model. We believe 5-7% price increase, store splits and heightened competition in Pizza delievery space (Pizza Hut, Oven story) could be a key factor. We believe new brands like Hongs Kitchen, Ek Dum and Dunkin Donuts are yet to show any clear visibility. Although JUBI is yet to give any visibility on Popeyes, it will take at least 5 years to scale up and be profitable.
We estimate 39% PAT CAGR over FY22-24 and Retain Accumulte with a DCF based target price of Rs 3600 (Rs 4139 earlier). Although JUBI has corrected from the peak, we expect back ended returns given rich valuations of 50.8xFY24 EPS.
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At 17:30 Jubilant Foodworks was quoting at Rs 3,195.40, down Rs 105.85, or 3.21 percent.
It has touched an intraday high of Rs 3,336.70 and an intraday low of Rs 3,097.00.
It was trading with volumes of 111,751 shares, compared to its thirty day average of 34,459 shares, an increase of 224.31 percent.
In the previous trading session, the share closed down 4.04 percent or Rs 139.00 at Rs 3,301.25.
The share touched its 52-week high Rs 4,577.45 and 52-week low Rs 2,597.10 on 13 October, 2021 and 03 February, 2021, respectively.
Currently, it is trading 30.19 percent below its 52-week high and 23.04 percent above its 52-week low.
Market capitalisation stands at Rs 42,169.39 crore.