Sharekhan has given Buy recommendation for Jubilant FoodWorks with a target price of Rs. 3145 in its research report issued on Feb 03, 2021
Sharekhan’s research report on Jubilant FoodWorks
Jubilant Foodworks Limited’s (JFL) revenue stood flat at Rs. 1,057.2 crore; Delivery and takeaway revenue grew by ~19% and 64%, respectively. Benign input prices, delivery charges of Rs. 30 per order, and wastage saving led to 340 bps improvement in gross margin to ~78%. Higher ticket price per customer and improving volumes would help gross margin to remain high despite inflation in input prices. JFL added 57 new stores (including 50 Domino’s store) in Q3 and would maintain the run rate of adding around 50 stores every quarter, considering strong growth prospects in the QSR space.
With business recovering to 100%, management is focusing on improving revenue growth trajectory through strengths of its distribution model and varied offerings. We recommend Buy with a PT of Rs. 3,145.
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