2 weeks ago
Jubilant FoodWorks: Jefferies Sees 34% Upside As Popeyes Doubles
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.
Jefferies raised its target price on Jubilant FoodWorks to Rs 650 from Rs 600 and retained a 'Buy' rating, implying nearly 34% upside.
Domino's India like-for-like (LFL) growth improved to 2.5% year-on-year in Q1, with revenue up about 7% and its total network reaching 2,513 stores after 58 net additions.
Popeyes recorded 45% LFL growth with revenue doubling year-on-year, adding 10 stores to reach 88 outlets.
Adjusted standalone EBITDA rose 7% year-on-year to Rs 220 crore, while the Ind AS EBITDA margin slipped slightly to 12.1% due to higher wage and input costs.
DP Eurasia revenue rose about 28% year-on-year to roughly Rs 660 crore, and the medium-term guidance of 5-7% LFL growth remains intact.
- Who
- Brokerage firm Jefferies and Jubilant FoodWorks, the company operating Domino's India and Popeyes.
- What
- Jefferies raised its target price on Jubilant FoodWorks to Rs 650 and kept a 'Buy' rating, citing a Domino's India recovery and strong Popeyes growth.
- Where
- India, along with international markets served by DP Eurasia such as Bangladesh, Sri Lanka, and Turkey.
- When
- Following the Q1 results; management says Q2 has started on a stronger note with better LFL growth expected than in Q1.
- Why
- Jefferies sees multiple growth engines - improving Domino's India demand, rapidly scaling Popeyes, and international growth - though input costs continue to pressure margins.
Bullish: Recovery and Growth Engines
Cautious: Margin Pressures
Demand recovery
Bullish: Recovery and Growth Engines
Domino's India LFL growth improved to 2.5% YoY, Q2 has started on a stronger note, management expects better LFL growth than Q1, and targeted offers plus a sub-Rs 250 menu are drawing customers back.
Cautious: Margin Pressures
The 2.5% LFL growth remains modest, and the company is working against a relatively easier base, so the recovery is not yet proven.
Margins and input costs
Bullish: Recovery and Growth Engines
Price increases and cost-saving measures limited margin pressure, and the medium-term target of about 200 bps adjusted EBITDA margin expansion remains unchanged.
Cautious: Margin Pressures
Higher wage and raw material costs (especially cheese and oil) pushed the Ind AS EBITDA margin down to 12.1%, and Jefferies expects near-term margin pressure to continue.
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










