Jubilant Foodworks Ltd. share price target

Key Jubi narratives now are - store expansion, industry-leading revenue growth, resilient margins, unlock-led recovery, digital capabilities, high quality management, platform potential, market opportunity. What’s not ticking (for consensus) is the international expansion which JUBI has aspirations for.

stores. 2) lower competition given covid led shakeout 3) strong ecosystem opportunity in India and emerge as a global QSR player. We believe success key to furtther re-rating. We maintain Accumulte with a DCF based target...

Boosting its technological capabilities: In addition to its delivery and value moat, JUBI is boosting its technological moat to enhance its lead over its QSR peers and aggregators. Improving its pre-order experience, usage of Hindi and...

across the country, mobility restrictions affecting takeaway channel severely and state-specific delivery restrictions. However, despite the challenges, the delivery channel continued to drive the sales recovery for Domino's. Revenue growth was driven by Domino's LFL Sales growth of 120.4% and SSG of 114.2%. The...

Opening of new stores, persisting digital investments and strong brand value help drive JFL's revenue. Meanwhile, app downloads continue to be on the rise, contributing to over half of total sales. However, post the recent stock price rally, valuation looks expensive. We therefore...

Jubilant Foodworks (JUBI) has reported above expected result for 1QFY22. Best in class execution and Zero-Contact branding has helped JUBI to report outperformance in delivery channel. Business recovery in takeaway channel was impacted during May'21 but Apr'21 and Jun'21 reported strong recovery. Positively, business recovery in Hong's Kitchen and EkDum reached at pre-covid levels. JUBI has taken marginal price hike to offset inflationary pressure. Also, there has been increase in promotional activities due competition from food-tech apps. However, gross margin remains intact at 77-78%. Also, JUBI has taken c. 9% hike in delivery charges to address inflation; benefit is likely...

While Jubilant FoodWorks (JUBI)'s sales were broadly in line with our expectations, margins surprised positively. The management believes the QSR business in India is at a significant inflection point. In line with this, the company has not only increased its store expansion guidance (150175 stores from 135 earlier) but also announced investments to boost the supply chain. Moreover, in an interesting new thrust, it has shown intent to gradually become a food tech company. On the technology front, JUBI is significantly expanding its...

We cut our FY22E/FY23E EPS forecast by 12.5%/5.2% on account of: a) JUBI's lower than expected 4QFY21 result, and b) the effect of the lockdown so far in 1QFY22 due to the second COVID wave. The impact would have been more if not for the resilience shown in AprMay'21, as per the management commentary. Continued strong growth in the Delivery channel has meant that the severe impact on Dine-in was mitigated to some extent at the broader level. This led to ~90% recovery compared to the pre-COVID run-rate in these two months. This will result in a lower impact compared to discretionary peers for 1QFY22 and lead to...

We continue to believe that most near to medium term drivers are priced in. However, on account of expected aggressive store expansion in India, we increase our EPS by 3% for FY22/23. The stock is valued at 81 and 65 P/E on FY22/FY23 EPS. We increase our target multiple to 55x P/E (50x earlier) and derive TP of Rs 2,500. We maintain our REDUCE rating. JFL is a far superior company among QSR peers but we see earnings surprises more for other discretionary companies (driven by pent-up, market share gain, pricing, sourcing advantage, make in India etc). Jubilant FoodWorks (JFL) announced the acquisition of Fides Food Systems Coperatief U.A., Netherlands (Fides) for GBP 24.8mn (INR 2.5bn). Fides is the beneficial owner of 32.81% of equity shares of DP Eurasia N.V. (DP Eurasia). DP Eurasia is the exclusive master franchisee of the Dominos Pizza brand, having 771 stores in Turkey, Russia, Azerbaijan and Georgia. It is listed with London Stock Exchange PLC. DP Eurasia has weak financials (due to operational losses in ex-Turkey, financial leverage and currency impact) resulting in a crack in its stock price over the past 3 years (GBX 250 in 2018 to GBX 70 now). The deal is valued at 8x EV/EBITDA of CY19.

With the opening of new stores, launching innovative food products and campaigns to improve market penetration, JFL's outlook remains positive on the back of improving demand across categories. Therefore, we maintain our ACCUMULATE rating on the stock with a roll forward target price of Rs. 3,160 based on 65x FY23E adj. EPS....