Sharekhan has given Hold recommendation for Jubilant Foodworks with a target price of Rs. 2770 in its research report issued on Mar 14, 2022
Sharekhan’s research report on Jubilant Foodworks
Uncertainties have built up post resignation of Mr. Pratik Pota as the company’s CEO along with fundamental headwinds of expected slowdown in same-store-sales and input cost inflation affecting profitability. We have revised downwards our earnings estimates by 15%/13% for FY2023/FY2024 to factor in lower same-store-sales affected by substantial addition of stores and high food inflation and lower EBITDA margin due to spike in input cost and higher store addition. New leadership on board will determine the way forward for the company as the structural growth story of the QSR sector is intact with top companies in the space focusing on driving growth through customer satisfaction and digitalisation.
We downgrade our rating on Jubilant Foodworks Limited (JFL) to Hold from Buy earlier with a revised price target of Rs. 2,770. The stock has corrected by 12% post the exit of CEO (and by 46% in the last three months) and is currently trading at 57x/39x its FY2023E/FY2024E EPS.
At 15:30 hrs Jubilant Foodworks was quoting at Rs 2,516.50, up Rs 3.75, or 0.15 percent.
It has touched an intraday high of Rs 2,589.00 and an intraday low of Rs 2,484.05.
It was trading with volumes of 122,039 shares, compared to its thirty day average of 68,683 shares, an increase of 77.69 percent.
In the previous trading session, the share closed down 12.27 percent or Rs 351.35 at Rs 2,512.75.
The share touched its 52-week high Rs 4,577.45 and 52-week low Rs 2,444.00 on 13 October, 2021 and 14 March, 2022, respectively.
Currently, it is trading 45.02 percent below its 52-week high and 2.97 percent above its 52-week low.
Market capitalisation stands at Rs 33,210.01 crore.