Prabhudas Lilladher's research report on Jubilant FoodWorks
JFL reported inline nos with LFL growth of 2.8% led by 1) 11.4% LFL growth in delivery channel. 2) Increasing newer consumers led by Value meal @Rs99 & refurbishment of stores 3) Increasing pace of innovation. However we cut our FY25/FY26/FY27 estimates by 17.3%/11.0%/7.7% as We expect overheads to remain elevated given targgted opening of 180 Dominos, 50 Popayes and 25 Hongs kitchen, rising wage rates and increase in RM inflation in 4Q25. JUBI is focusing on driving volumes by innovations, low value meals and waived off delivery charges in a slow and delivery centric demand environment, which will limit significant margin expnasion in medium term. Popayes is in initial ramp up stage and current numbers also include losses on the same.
Outlook
We estimate 34% EPS CAGR over FY24-27 on a low base. We assign DCF based target price of Rs589 (582 earlier). Retain hold.
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