JFL is a strong player in the QSR industry, with >1,100 stores. Therefore, it commands a high valuation, despite its uninspiring performance in the past. We expect JFL's performance to improve in ensuing quarters. We upgrade the rating to BUY from NEUTRAL, with a TP of Rs 1,405 based on 45x June-19EPS. JFLs net revenue was up 11.5% YoY at Rs 6.8bn, higher than our expectation of 7%. EBITDA and PAT increased by 38% and 26% YoY, respectively. JFLs strong 1QFY18 performance has delivered on time after stock was under pressure on consistent weak performances. SSG at 6.5% (our expectation 3%) was much better than -7.5/-3.2% in 4QFY17/ 1QFY17 respectively. QSR industry growth was muted, but JFLs mgt is confident of sustaining healthy SSG, going ahead.