Brokerages are largely upbeat on Jubilant FoodWorks’ performance, adding that the same store sales growth (SSSG) being better than estimates. Macquarie and Credit Suisse have upgraded their target prices.
The stock rose over 2 percent in the morning trade. It touched an intraday high of Rs 1,239.05 and an intraday low of Rs 1,220.00.
The operator of Domino’s Pizza reported a 46 percent jump in its Q3FY19 net profit at Rs 96.5 crore on the back of better operating income and same-store-sales growth.
The company had reported profit of Rs 66 crore in the same quarter last fiscal.
Revenue of the company rose 16.8 percent at Rs 929.1 crore against Rs 795.2 crore.
Operating profit or EBITDA up 24.7 percent at Rs 170.6 crore, while margin was at 18.4 percent.
The same-store-sales growth stood at 14.6 percent for the quarter ended December 2018.
Here is a gist of what brokerages feel about the results.
Brokerage: Credit Suisse | Rating: Neutral | Target: Raised to Rs 1,350 from Rs 1,275
The global research firm observed that the same store sales growth was healthy, but it was moderating as GST impact is fading away. It expects more moderation in same-store-sales growth. It also saw stores expansion being accelerated after two years. Further, a change in beverage partner leads to gross margin gain, it added. A key watchout could be the risk of aggression from food aggregators.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 1,525
The firm believes margin expansion of 110 bps is ahead of its +20 bps estimate. The overall operating expenses remained flattish. SSSG was higher than expectation of 14 percent.
Brokerage: Macquarie | Rating: Outperform | Target: Raised to Rs 1,780 from Rs 1,600
Macquarie said that Q3 results were a strong rebuttal to street concerns about demand environment. Further, incremental margin boost on account of the new beverage deal. It believes that the recent correction provides for a good entry point. On the earnings front, it is building in 31% EBITDA CAGR for FY18-20. The company remains as one of the top picks.
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