Jubilant FoodWorks Shares Upgraded To 'Buy' By Dolat Capital Post Strong Q1 Results — Check Target Price

Jubilant FoodWorks saw 20.1% LFL growth in delivery channel, pushing overall LFL growth to 11.6%, compared to 3.0% in the base quarter. It outperformed key QSR competitors who posted negative growth. The company’s Q1 FY26 Ebitda and APAT exceeded estimates by 3.7% and 31.6%, respectively. This was largely due to lower-than-anticipated expenses.

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Dolat Capital Report

Jubilant FoodWorks Ltd.’s Q1 FY26 profitability was ahead of our estimate. Domino’s posted +11.6% like-for-like, aided by delivery LFL of 20.1%. Further, dine-in channel revenue grew by 2.5%, majorly driven by lunch hour meals.

Gross margin/Ebitdam contracted by 120/40bps YoY to 71.4/19.4% due to higher investments behind growth, new customer acquisition and delivery mix. Nevertheless, we are optimistic that Project Vijay will facilitate gross margin recovery moving forward. Additionally, an anticipated improvement in LFL would help expand margins.

The management aims for 200bps improvement in margins over the next three years.

Though Q1 results were ahead of our estimates, we have maintained our FY26/27E Ebitda as it already factors in improvement.

Going ahead, we expect margins to improve gradually in line with the improvement in LFL growth. Valuing the domestic business at 28x FY27E EV/Ebitda and IB at 14x EV/Ebitda, we maintain target price at Rs 785. Considering the recent fall in stock price, we upgrade to ‘Buy’

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