Jubilant Foodworks will focus on mass-market products, keeps buy: Deutsche Bank
Deutsche Bank has kept buy rating on Jubilant Foodworks with a target of Rs 1250 and it is a top pick in its consumer discretionary segment along with Titan Company.
“The stock is up more than 37 percent in CYTD2017 as consensus now agrees that the turnaround plans implemented under new CEO Mr Pratik Pota are steps in the right direction,” Deutsche Bank said.
Domino’s is now outsourcing deliveries to ShadowFax, which is a significant step as it reduced the necessity to manage large number of employees and it converts a fixed cost to a semi-variable cost.
Domino’s is now available in food-tech and food-aggregator platforms like Swiggy, Zomato, Foodpanda etc. It has co-opted these platforms versus considering them as competition earlier. It has an opportunity to partner with Google Areo when the app goes live in the major cities, it added.
Research house is hoping that the company will follow the recent actions with higher focus on mass-market products, focus more on menu refreshments and improving product quality.
The company is going report its June quarter earnings today. It could post a 6 percent rise in net profit for June quarter at Rs 20.1 crore, according to a poll of analysts by CNBC-TV18. The total income could rise 6.3 percent at Rs 647.5 crore, against Rs 608.9 crore.
Meanwhile, in 1QFY18, CLSA forecast same-store sales growth (SSG) would be at 3 percent and expects EBIRTA margins at 9.9 percent. The firm kept buy rating on stock.At 11:59 hrs Jubilant Foodworks was quoting at Rs 1,169.90, up Rs 3.95, or 0.34 percent on the BSE.