Motilal Oswal is bearish on Jubilant Foodworks has recommended sell rating on the stock with a target price of Rs 1270 in its research report dated October 26, 2017.
Motilal Oswal's research report on Jubilant Foodworks
EBITDA by 59% YoY to INR 1b (est. of INR 677m) and adj. PAT by 124.8% YoY to INR 485m (est. of INR 215m) in 2QFY18. SSS grew 5.5% (est. of +6%) for the quarter. JUBI opened one Domino’s store and closed one store in the quarter.
JUBI has in fact lagged other QSR peers like Westlife on SSG growth for the last seven quarters and Yum India for the last four quarters. Despite assuming highly aggressive EPS forecasts, the stock trades at expensive valuations of 59.9x/45.4x FY19/FY20E EPS. Maintain Sell with a revised TP of INR 1,270 (multiple unchanged at 40x Sept’19 EPS).
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