Accumulate Jubilant FoodWorks; target of Rs 3261: Prabhudas Lilladher

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Prabhudas Lilladher's research report on Jubilant FoodWorks

JUBI’s acquisition of Dp Eurasia through 32.8% controlling stake in Fide Foods Systems marks its entry in Europe with leadership in Turkey and No3 position in Russia. We believe JUBI will be able to drive benefits in long term given 1) Familiraity to operate Dominos in India 2) Asset light business model with more focus on franchisee operations 3) scope to grow in Russia and Turkey with potential of 1500/900 stores 4) synergy benefits in RM procurement and digital/technology. We believe addition of these territories literally doubles addressable market and adds new growth avenues in long term.

Outlook

We belive acquisition at 7.5x EV/EBITDA (trailing) as against 43.2x EV/EBITDA (FY21) for JUBI is attractive. We are raising our DCF based TP to Rs 3261 (earlier Rs 2941). Retain Accumulate.

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