Motilal Oswal's research report on Jubilant FoodWorks
Jubilant FoodWorks (JUBI) reported largely in-line sales and margins, even as like-for-like (LFL) was lower than expected. The management has shared both LFL and same-store sales growth (SSSG) numbers for many quarters thus far. The decision to stop the SSSG disclosure is puzzling, especially as the management has commented that a) there is no large difference between SSSG and LFL and b) the gap between the two is unlikely to increase. The SSSG disclosure issue aside, the investment case for JUBI remains strong, led by multiple factors. a) Quick-Service Restaurants (QSR) is the only segment under our coverage with enhanced opportunity in the COVID aftermath – as elaborated in our Thematic Note in Dec’21. b) JUBI has the best operating metrics and ROEs among the QSRs in India, resulting in visibility in funding for growth purposes. c) It is the only company with an established track record of healthy SSSG growth, along with significant store expansions. d) On the technology front, it is far better placed than other QSRs (with more than half its sales coming from its own app – app sales continue to increase).
Outlook
Moreover, it continues to have a strong bargaining power v/s aggregators. As a result, we maintain our BUY rating.
More Info
At 17:30 Jubilant Foodworks was quoting at Rs 3,195.40, down Rs 105.85, or 3.21 percent.
It has touched an intraday high of Rs 3,336.70 and an intraday low of Rs 3,097.00.
It was trading with volumes of 111,751 shares, compared to its thirty day average of 34,459 shares, an increase of 224.31 percent.
In the previous trading session, the share closed down 4.04 percent or Rs 139.00 at Rs 3,301.25.
The share touched its 52-week high Rs 4,577.45 and 52-week low Rs 2,597.10 on 13 October, 2021 and 03 February, 2021, respectively.
Currently, it is trading 30.19 percent below its 52-week high and 23.04 percent above its 52-week low.
Market capitalisation stands at Rs 42,169.39 crore.
For all recommendations report, click here
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