Brokerages slash target price on Jubilant FoodWorks despite seven-fold jump in net profit

For Jubilant's valuations to improve further, Nuvama Institutional Equities said same-store sales growth would have to revive, which remains a challenge.

"Jubilant has taken multiple initiatives— loyalty, reducing delivery time, brand rehaul with IHOP, improvement in delivery or order growth — which are positive, but not enough," said the brokerage. It kept its hold rating intact, slashing its target price from Rs 498 to Rs 487 per share.

Morgan Stanley retained its equal-weight call on Jubilant FoodWorks, cutting its target price to Rs 427 per share, as Q4 earnings missed its expectations on weaker margins. This implies a downside of around 11 percent.

The brokerage added that the current operating deleverage cycle has resulted in significant cuts to estimates, while the improved underlying demand remains key to any further recovery.

International brokerage Jefferies also cut its target price on Jubilant FoodWorks to Rs 475 apiece, as margins contracted to multi-quarter lows.

Jubilant FoodWorks shares have traded sideways over the past year, recording gains of just under one percent. In comparison, the frontline Nifty 50 index has risen around 23 percent during the same time period.

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