Jubilant FoodWorks Stock Rockets: Analyst Upgrades to BUY with Stunning Rs 700 Target!

Author

Simar Singh | Whalesbook News Team

Detailed Coverage:

Research Report Analyzes Jubilant FoodWorks Prabhudas Lilladher has upgraded Jubilant FoodWorks to a 'BUY' recommendation from 'Hold'. The upgrade is driven by several key factors, including robust sales performance in October and a positive business outlook. The company's strategy to focus on premiumization through new product innovations and launches across its brands is a significant positive.

Guidance and Performance Jubilant FoodWorks has guided for a 200 basis points (bps) margin expansion by FY28, based on FY24 figures, with 100 bps expected from reducing losses in new ventures. The company reported inline second-quarter fiscal year 2026 (2Q26) results, showing 9.1% Like-for-Like (LFL) growth, attributed to strong menu innovation and value offerings. The Popeyes brand is showing promising traction with improving economics and healthy double-digit growth. While DP Eurasia continues to face inflationary pressures in Turkey, the inflation rate has now stabilized.

Future Outlook and Margin Expansion The firm anticipates a margin expansion of approximately 220 bps between FY26 and FY28, supported by an increased average ticket size, supply chain efficiencies, and gains from technology investments, alongside a healthy growth outlook. Earnings Per Share (EPS) are projected to grow at a CAGR of 57.9% over FY26-FY28 from a low base.

Valuation and Target Price Based on their analysis, Prabhudas Lilladher has assigned a target price of Rs 700 per share for Jubilant FoodWorks, revising it up from Rs 670. This valuation considers 33x FY27 EV/EBITDA for standalone operations and 22x PAT for DP Eurasia.

Impact This upgrade suggests a positive outlook for Jubilant FoodWorks. Investors may see increased interest in the stock, potentially leading to price appreciation. The QSR sector as a whole could see renewed investor attention if consumer demand picks up as predicted. The company's focus on premiumization and margin improvement indicates a strategy for sustainable growth. Rating: 8/10

Definitions * Basis Points (bps): A unit of measure used in finance to describe small changes in interest rates or other percentages. 100 basis points equals 1 percent. * FY (Fiscal Year): A 12-month period that a company uses for accounting purposes. For India, it typically runs from April 1st to March 31st. FY26 means the fiscal year 2025-2026. * LFL (Like-for-Like Growth): A measure of growth that compares revenue from stores open for at least one year. This helps exclude growth from new store openings or closures. * CAGR (Compound Annual Growth Rate): The average annual growth rate of an investment over a specified period of time greater than one year. * EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization): A valuation multiple used to compare companies by showing how much they are worth relative to their operating profit. * PAT (Profit After Tax): The profit remaining after all expenses and taxes have been deducted from a company's total revenue. * QSR (Quick Service Restaurant): A type of restaurant that serves fast food or meals quickly. * SOTP (Sum of the Parts): A valuation method where a company's total value is calculated by adding up the values of its individual business segments. * DP Eurasia: Refers to the operations of DP Eurasia, which holds the master franchise for Domino's Pizza in Turkey, Russia, Azerbaijan, and Georgia.