Buy Jubilant Foodworks, target price Rs 660: IIFL Securities

IIFL Securities maintains a positive outlook on Jubilant Foodworks, issuing a buy call on the stock with a target price of Rs 660. At the current market price of Rs 639.4, this represents a potential upside of 3.2%. The brokerage firm's bullish stance is based on the company's strong fundamentals, including its dominant market position in the quick-service restaurant segment and its robust financial performance. Jubilant Foodworks, which operates the popular Domino's Pizza and Dunkin' Donuts chains in India, has consistently reported healthy revenue growth and profitability.

About Jubilant Foodworks:

Jubilant Foodworks Limited (NSE: JUBLFOOD) is a leading Indian food service company that owns and operates the popular Domino's Pizza franchise in India, Sri Lanka, Bangladesh, and Nepal. The company also operates the Dunkin' Donuts franchise in India, as well as a chain of Chinese restaurants called Ecstasy. Jubilant Foodworks has a strong presence in the Indian food industry, with over 1,400 Domino's Pizza restaurants across the country. The company's revenues have been growing steadily in recent years, and it is expected to continue to perform well in the future.

52 Week Price Trend:

Jubilant Foodworks, the operator of Dominos Pizza and Dunkin' Donuts chains in India, currently trades at Rs. 639.4, hovering above its 52-week low of Rs. 412.1 but below its 52-week high of Rs. 586.95. The stock has shown signs of recovery after hitting its low in June 2022, indicating potential for growth. However, it remains below its pre-pandemic levels, suggesting that the company still faces challenges in fully regaining its previous momentum.

Stratzy's MOST Analysis:

According to Stratzy's MOST framework, JUBLFOOD has a "BB-" rating, indicating a medium level of fundamental risk. This assessment is based on the company's performance across four key pillars: Management, Outlook, Safety, and Trend. While JUBLFOOD may have some strengths in certain areas, overall, its performance falls into the "Medium Risk" category, suggesting that investors should proceed with caution and conduct thorough due diligence before making any investment decisions.

Company's Fundamentals:

Jubilant Foodworks, known for its Domino's and Dunkin' brands, exhibits impressive financial ratios on the NSE. Its stock PE of 145.67 indicates that investors are willing to pay a premium for future earnings, reflecting the company's strong position in the quick-service restaurant industry. Meanwhile, the PB Ratio of 15.38 suggests that the stock is priced significantly above its book value, indicating potential overvaluation. However, the low Dividend Yield of 0.25% implies that investors prioritize capital growth over dividend income, signaling their belief in the company's long-term prospects.

Fundamental and Technical information provided in this blog were last updated on 10 Aug, 2024

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