Hot Stock: Sharekhan recommends Buy on pizza-maker Jubilant FoodWorks, check price target

Jubilant Foodworks share price: Domestic brokerage firm Sharekhan is bullish on Domino's pizza-maker Jubilant FoodWorks and has recommended buy rating on the stock. It said that the company’s brand-wise differentiated strategy, aggressive store additions, improving customer experience on the delivery platform, sustained innovation and customer-centric offerings will drive growth in the medium-long term.

The brokerage house in its report dated December 30, 2022, said that it likes the company's strategy of investing in the core and new ventures to scale up business growth and revenue without comprising on profitability in the medium term.

With the right strategies in place, Sharekhan expects the company’s revenue and PAT to report a 22.5 per cent and 37.1 per cent CAGR, respectively, over FY2022-FY2025E.

Traders Diary on 20 stocks: Buy, Sell or Hold strategy on Federal Bank, SBI Life, CONCOR, Escorts Kubota, others diary 

Jubilant FoodWorks Share Price Target 2023

The stock has corrected by 18 per cent from its recent high, it said, adding that "we maintain our Buy rating on the stock with an unchanged price target of Rs 770."

The report also said that the food service company witnessed strong demand traction till Diwali. However, post the festive season, the momentum weakened in November with a decline in footfalls, which continued till mid-December. It said that the decline in demand can be majorly attributed to a general decline in the high street and mall footfalls and higher eating out at social functions (vs. Quick Service Restaurants chains).

Even though demand has shown some signs of recovery in the latter half of December, on an overall basis, it will be muted for the quarter ending December, it said.

On the other hand, the report said that raw-material inflation which continued to remain elevated during the quarter with cheese and wheat prices up by 30 per cent year on year (y-o-y) would also adversely impact JFL’s profitability in the near term.

According to the report, JFL has multiple drivers in place to achieve consistent double-digit growth in the coming years. It said that a few of the company’s strategies will aid in achieving strong growth which includes regional menu innovation, enhanced digital focus, scaling up of new ventures, sustained new store addition, and introduction of the loyalty program in the long run. 

Shares of Jubilant FoodWorks quoted Rs 508 apiece on NSE, up nearly 0.80 per cent the previous close of Rs 505.05. On BSE, the scrip traded at Rs 507 per share.

Valuation 

Click here to get more stock market updates I Zee Business Live