Dolat Capital recommended Accumulate rating on Jubilant Foodworks with a target price of Rs 1355 in its research report dated May 15, 2019.
Dolat Capital's research report on Jubilant Foodworks
JFL’s Q4FY19 results were below our estimate, with a 6% same store sales growth (SSSG) vs our estimate of ~10%. A high base of 26.5% SSSG restricted overall growth in the quarter. We believe JFL will likely post a high single digit to a low double digit SSSG in the ensuing quarters, as the base remains highly unfavorable. However, margins will remain high, as the negative impact of store additions will be mitigated by margin expansion in Dunkin.
We have broadly maintained FY20E and FY21E EPS estimates to ` 30.4 and ` 34.1 respectively. Maintain Accumulate, with TP of ` 1,355 (40x FY21E EPS).
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