Jubilant FoodWorks Q2 Results Review - Demand Improvement Expected; Upgrade To 'Accumulate': Dolat Capital
We remain positive on QSR growth in the long run and believe that moderate inflation would help regain lost pace.
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Dolat Capital Report
Jubilant FoodWorks Ltd.’s Q2 FY24 operational performance was in line with our estimate. A -1.3% like for like growth, high employee cost and low operating efficiency resulted 340 basis points Ebitda margin contraction.
During the quarter, Jubilant FoodWorks added 50 new Domino’s stores in the domestic market. Going ahead, the company plans to add ~200-225 new store under Domino’s while ~30-35 stores under Popeye’s.
Further, favorable base, festive season and cricket world cup is expected to help the company to post strong same-store sales growth improvement.
Maintained our FY24/25E earnings per share estimates at Rs 5.9/8.2 as Q2 performance was in line and introduced FY26E EPS at Rs 10.1.
We remain positive on quick service restaurant growth in the long run and believe that moderate inflation would help regain lost pace. Increase target price at Rs 607 (60 times FY26E; price/earnings to growth – 2.6 times).
Multiple revision is in line with better growth visibility. Upgrade to 'Accumulate'.
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