2 weeks ago

Jubilant FoodWorks: Jefferies Sees 34% Upside As Popeyes Doubles

Jubilant FoodWorks: Jefferies Sees 34% Upside As Popeyes Doubles
Jubilant FoodWorks: Jefferies sees 34% upside as Popeyes revenue doubles, Domino sees a recovery · financialexpress.com

Jubilant FoodWorks is a big company in India that runs restaurants like Domino's Pizza and Popeyes.

A research company called Jefferies studies companies and guesses whether their stocks will go up or down.

Jefferies thinks Jubilant FoodWorks will do well, so it told investors to keep buying its stock.

It raised its target price to Rs 650, meaning it believes the stock can climb by about 34 percent.

One reason is Domino's: more people are ordering pizza again, and the company opened 58 new Domino's stores.

Another reason is Popeyes, a fried chicken chain whose sales doubled as it added 10 new stores.

But making the food costs more because things like cheese and oil got more expensive, so profits are a bit tighter.

The company also runs restaurants in other countries, like Bangladesh, Sri Lanka, and Turkey, and those are growing too.

So Jefferies thinks the company has a bright future, as long as it keeps a careful eye on its costs.

Key facts

Brokerage
Jefferies
Rating
Buy
Target price
Rs 650 (raised from Rs 600)
Implied upside
Nearly 34%
Domino's India Q1 LFL growth
2.5% year-on-year
Domino's India store count
2,513 outlets (58 net additions)
Popeyes performance
45% LFL growth; revenue doubled year-on-year
Adjusted standalone EBITDA
Rs 220 crore, up 7% YoY (Ind AS margin 12.1%)

Quotes

Jefferies analyst

Brokerage firm Jefferies analyst on Jubilant FoodWorks performance

“"Popeyes is emerging as a second growth engine, with improving store economics & LFL at 45%."”
financialexpress.com
“"the medium-term target of c200bps adjusted EBITDA margin expansion remains unchanged."”
financialexpress.com

Sources

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