Hold Jubilant Foodworks; target of Rs 950: Axis Direct
Axis Direct recommended hold rating on Jubilant Foodworks with a target price of Rs 950 in its research report dated March 17, 2017.
Axis Direct's research report on Jubilant Foodworks
Mr. Pratik Potais joining Jubilant as CEO in the midst of challenging times. After a blockbuster performance over FY10-13, Jubilant has posted low single-digit SSSg for the fourth consecutive year. Low SSSg and rapid store expansion led to a dramatic fall in OPM (from 17.4% in FY13 to 10.1% in FY17E), resulting in EPS decline of 17% over FY12-17E and RoE coming down to 11%.
A turnaround will not be easy to come by and we await strategic clarity from new management. Maintain HOLD with TP of Rs 950 (40x fwd PE).
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