Moneycontrol Bureau
Brokerage house Morgan Stanley has retained its ‘underweight’ rating on Jubilant Foodworks, citing increased competition, lack of innovation and high prices of its pizzas as the key reasons.
Morgan Stanley’s assessment is based on a consumer survey conducted by it.
"Moderation in SSG is not entirely macro driven--increased competition and lack of innovation are factors that may have contributed to the current trend of sluggish sales," said the Morgan Stanley note to clients.
The brokerage has trimmed its FY16 earnings per share forecast for the company to Rs 19.9 from Rs 20.6, and says this is 29 percent below consensus estimates in the broking industry.
Some takeaways from the Morgan Stanley survey
* Among respondents who have not increased consumption of Dominos pizza, 44% cite higher price as the key reason.
* Over the next six months, our survey respondents seem more likely to experiment with other eating out options including western and Indian cuisines.
* Over a third of the respondents who have not increased consumption of Dominos pizza cite menu variety and its lack of change as the key reason
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