Jubilant Foodworks gains 2%, Goldman Sachs maintains buy

Moneycontrol Bureau

Shares of Jubilant Foodworks gained 2 percent in early trade Tuesday on buying interest. Goldman Sachs maintained its buy rating on the stock, adding the stock to its conviction list.

"We see potential for Jubilant Foodworks to rise to a USD 7.4 billion valuation in 10 years. We expect the company to add over 1,800 outlets while growing same-store-sales by 12 percent in 10 years as against 5.4 percent currently priced in," Goldman Sachs report said.

On August 5 after first quarter earnings, Ravi Gupta, CFO of the company had said the overall economic slowdown has hurt its same-store sales growth, but it still expects 8-10 percent growth in the current financial year.

Jubilant Foodworks had reported a 5 percent year-on-year rise in first quarter (April-June) net profit at Rs 34 crore. Its total income rose 26 percent to Rs 397 crore. However, same-store sales growth at Domino's, which has 602 restaurants, rose just 6.3 percent in April-June, down sharply from the 22.3 percent growth in the year ago quarter.

At 09:42 hours IST, the stock was up 1.97 percent at Rs 1,074.30 on the Bombay Stock Exchange.