Rahul Arora, CEO at Nirmal Bang Institutional Equities told CNBC-TV18, "Procter and Gamble (P&G) is at about 42 times FY17. Jubilant Foodworks' results were very good, they surprised even us on the positive side and we have the most aggressive target on the street on that stock. We still believe that the stock can give about Rs 1,750 kind of a target with one-year horizon. If you start rolling over from three year perspective then we think that the stock could give anywhere between Rs 2,300 and Rs 2,500 if you are ready to hold from a two-year view."
"So retain our very positive stance on Jubilant Foodworks, the rationale still remains the same. I still think that return ratios will double from 20 percent ROE to 40 percent and I still think the EPS will triple from Rs 18 in this financial year over the next three years to about Rs 54-55," he said.
"The results in P&G were a little lower than our expectations. So even though the sales grew 18 percent, EBITDA grew 13 percent and they have had a double digit growth in profit after tax (PAT). We were expecting 600 bps improvement in the EBITDA margin, it came in at about 350 bps but the stock is up about 145 percent since we initiated but to come out and tell someone to buy it at Rs 7,000, I don’t have the heart."
He further added, "We have put P&G under review. The results came out this morning, they were supposed to come out yesterday. So the analyst has not had a chance to roll forward his numbers. So at present we have put it under review but it will at best be an accumulate. I cannot see putting a buy even from FY17 on this one."
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