Jubilant Foodworks Shares Hit Record High On Bullish Analyst Ratings After Q1

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Shares of Jubilant Foodworks Ltd. jumped to a record high as analysts remained bullish on the company, citing newer brands, rapid store expansion, and recovery in sales, among others.

That’s despite a 35% sequential decline in net profit of the operator of Domino’s Pizza and Dunkin’ Donuts in India to Rs 69.51 crore in the quarter ended June, according to an exchange filing.

  • Its revenue fell 14% over the preceding quarter to Rs 893.18 crore.

  • Operating profit or Ebitda of the Noida-based company dropped 15% quarter-on-quarter to Rs 212.27 crore.

  • Margin contracted to 23.77% from 24.14%.

Pratik Pota, chief executive officer and whole-time director at Jubilant Foodworks, said growth picked up after easing of lockdowns and the momentum in June was markedly higher with almost complete revenue recovery. The company, that opened 29 new stores during the quarter ended June, has targeted to open 150-175 stores in the ongoing fiscal.

Shares of Jubilant Foodworks gained as much as 12% to a record high of Rs 3,513 apiece in the afternoon trade on Thursday. The stock has risen more than 21% so far in 2021.

Of the 32 analysts tracking the company, 22 have a ‘buy’ and five each recommend a ‘hold’ and a ‘sell’, according to Bloomberg data. The average 12-month consensus price target indicates a downside of 4%.

Here is what brokerages have to say about Jubilant Foodworks’ June-quarter earnings.

Dolat Analysis & Research

  • Recommends ‘buy’ with a target price of Rs 3,412 apiece.

  • Aggressive store expansion plans, rapid recovery from second wave impact to be key growth drivers.

  • Introduction of delivery charges to mitigate loss of revenues well absorbed by consumers.

  • Expects margin to sustain owing to calibrated pricing and introduction of new products.

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