Buy Jubilant Foodworks; target of Rs 780: ICICI Securities

Buy

ICICI Securities research report on Jubilant Foodworks

In Jubilant Foodworks' [Jubi] first-ever analyst meet, it outlined the present and future (next three years) - (1) target to open 1,000 stores (vs. ~250 per annum currently), (2) 200bps net margin expansion aspiration, (3) platform opportunity in Domino’s (willingness to accelerate launches outside of pizza, targeting snacking TAM), (4) finetuning Popeyes playbook prior to acceleration, (5) insights into Turkey business (the nuances of a successful franchise operation, managing hyperinflation), (6) using data to decide new store locations, (7) clear guidelines / guardrails for new product development / ramp-up, (8) clear strategy of prioritising customer acquisition over price growth, (9) plans to relaunch loyalty program, (10) it may experiment with sub-franchising. Our long-term optimism is intact. BUY.

Outlook

Our earnings estimates are unchanged; modelling revenue / EBITDA / PAT CAGR of 25% / 28% / 44% over FY24-27E. Maintain BUY with an unchanged DCF-based target price of INR 780. Key downside risks are raw material costs turning inflationary and higher-than-expected increase in competitive intensity..

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Jubilant Foodworks - 28022025 - isc