Reduce Jubilant Foodworks; target Rs 1048: ABMoney
Brokerage house Aditya Birla Money has recommended a reduce rating on Jubilant Foodworks with a target price of Rs 1048 in its August 05, 2013 research report.
Aditya Birla Money's report on Jubilant Foodworks
"Jubilant Foodworks, we believe the strategy of JFW to expand aggressively during downturn and spend money behind brand building is the step in right direction. Past experience of FY09, when SSSG moderated steeply to 6 percent (as compared to that of 23 percent in FY07 and 20 percent in FY08) and then again bounced back to 22 percent in FY10, gives us the confidence and is testimony of the fact that money spend during the downturn gives very healthy return whenever economy bounce back to accelerated growth path. We believe, the moderating in SSSG growth is a temporary blip and JFW has build very robust brand and business model, which has immense potential to tapped the opportunity of rapidly growing organised QSR industry. We expect SSSG to be in 10 percent and 16 percent in FY14E and FY15E respectively. Our 1-yr fwd fair value of JFW business based on DCF methodology comes to Rs 1048/share. Based on CMP of Rs 1139, we are reiterate our REDUCE rating with Aug14 target price of Rs 1048/share," says Aditya Birla Money research report.
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