Hold Jubilant FoodWorks; target of Rs 505: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Jubilant FoodWorks with a target price of Rs 505 in its research report dated October 25, 2023.

Broker Research

October 26, 2023 / 13:58 IST

Hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Jubilant FoodWorks

We cut our FY24/FY25 EPS estimates by 7.0%/7.5% due to 1) sustained demand pressures in Pizza Industry amidst rising comeptition 2) poor sales growth with delcine in dine in sales despite 187 more stores YoY 3) inflation remaining at elevated levels due to high prices of cheese and vegetables. JUBI is looking at driving groth led by 1) 200-225 Dominos and 30-35 Popeyes store additions and 2) Incremental footfalls from Re-imaged stores. We believe worst is over given expect incraese in demand during festival seasosn and world cup and low margin in base quarters incrementally. JUBI is investing in creating long term growth drivers led by 1) Reimagined stores 2) gradual expansion in Popeyes and Hongs kitchen 3) supply chain with new commissiories. However reimagined stores are a change in strategy given that 2/3rd sales come from delivery.

Outlook

We estimate 13.7% PAT decline in FY24, but 39% CAGR over FY24-26 on a low base. we believe 3Q trends will hold key to extent of rebound in earnings and profits. Retain Hold with DCF based target price of Rs505 (Rs490 earlier).

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