Prabhudas Lilladher's research report on Jubilant FoodWorks
JFL reported subdued nos with standalone PAT missing on our estimate led by 1) lower GM amid higher input prices and discounting and 2) higher ad spends & employee cost. We cut our FY25/FY26/FY27 standalone EPS estimates by 12.8%/9.7%/5.9% as we expect overheads to remain elevated given overheads on new stores (180 Dominos addition in FY25, rising wage rates and RM inflation). JUBI is focusing on driving volumes by innovations, low value meals, discounting and waived off delivery charges in a tepid demand environment, which will limit margin expnasion in near term. Popeyes is witnessing good traction and with improving economics, losses are likely to be lower. Dp eurasia was impacted as inflation eased off to 42% in Turkey, however lower wage revision remains key concern for demand.
Outlook
We estimate 39% standalone EPS CAGR over FY24-27 on a low base. We have assigned 25x multiple to dp eurraisa (Rs 80/share) on its CY26 earnings and arrived at SOTP based target price of Rs672 (719 earlier). Retain hold.
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