Jubilant Foodworks Ltd. share price target

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....

Jubilant Foodworks (JUBI) has reported better than expected result for 3QFY21. JUBI reached 100% pre-covid levels during 3QFY21 driven strong growth momentum in delivery and takeaway while dine-in still operating at c. 42% pre-covid. Favourable competitive environment, benign raw material and delivery charges continued to support gross margin expansion. JUBI added higher no. of Dominos stores during 3QFY21. Also, added 5 stores of Hongs and EkDum. Positively, both these franchises are tracking well. Based on revised business outlook; we have revised our EPS estimates upwards by 7%, 9% and 7% in FY21E, FY22E, and FY23E. We upgrade our valuation...

with medium term potential of 3000 Dominos 2) lower competition as several smaller players have gone out of business 3) Investment in App being rewarded by record downloads and improved mix order value and 4) huge growth opportunity in segments like biryani (EkDum) and chinese foods (Hongs Kitchen) given lack of large organised players. We believe JUBI's wide reach and affordable portfolio will enable dine in to grow swiftly once capacity restrictions are lifted. We believe strong cash position and negative working capital provides JUBI an opportunity to create...

Jubilant Foodworks (JFL) has expanded its platter by foraying into the Biryani segment under the brand name -Ekdum! by opening three restaurants in Gurgaon. This is inline with its strategy expand its portfolio to include products that Indian consumers prefer. The expected rise in QSR sector, shift to trusted brandspost COVID-19 and higher ordering through online platforms will be the key growth drivers for such ventures in the near term. Core business recovered m-o-m (in October,business bounced back to 96%). With stores operating at optimal levels and the on-going festive/cricket season, online...

Outlook improves with the ongoing growth momentum across delivery and take-away channels and expected recovery from Dine-in. Therefore, we upgrade our rating on the stock to ACCUMULATE with a revised price target of Rs. 2,830 based on 63x Dec 2022E adj. EPS....

returned to normalcy (96.2% in Oct'20) and is likely to emerge stronger from and 49.8% YoY) 2) lower competition as several smaller players have gone out of business 3) closure of dine in focused 105 stores which will be replaced...

Jubilant Foodworks (JUBI) has reported above expected result for Q2FY21. JUBI witnessed strong recovery in revenue (compared to last year) from 70% in Jul'20 to 92% in Sep'20 and 96% in Oct'20. This was driven by faster recovery in delivery and takeaway channel. To further improve convenience in takeaway channel; JUBI has launched drive and pick facility during 2QFY21 (customer's won't have to step-out from their cars). Gross margin improved significantly led by low discounting intensity, deflationary raw material environment, and introduction of delivery fees. Cost efficiencies (lower employee and other expense) drove EBITDA margin expansion....

Jubilant FoodWorks' (JUBI) closure of 90 stores at net level on sequential basis impacted sales performance v/s estimates in 2QFY21. However, store opening returning to end-FY20 levels is encouraging (1,335 stores by endFY21). Management believes sales would be positive by 4QFY21. Operating margins were significantly ahead of expectations, led by various factors like (a) introduction of delivery charges from 1QFY21, (b) deflation in raw material costs, (c) closure of least profitable stores, (d) costs savings on employee costs, both at the store level and delivery level, (e) lower energy costs, and (f) cut on wastages. Of these, most are sustainable....