Jubilant Foodworks hits 52-week high as Citi recommends buy, sees 28% upside
Share price of Jubilant Foodworks, the master franchise for Domino’s Pizza in India, gained nearly 2 percent intraday to hit a fresh 52-week high of Rs 1,750 as analysts remain positive on the stock.
While retaining a buy call on Jubilant Foodworks with a target price of Rs 1,775 per share, Deutsche Bank said market checks indicated Domino’s has implemented price hike of average 6 percent after GST.
Price hike will mitigate potential margin headwind due to impact of stranded taxes, it added.
The research house said Jubilant Foodworks remains its top pick in consumer discretionary. Revenue growth and higher cost savings in second half of FY18 may drive consensus earnings upgrades, it feels.
CLSA also has a buy call on the stock with a target of Rs 2,200 per share after Domino’s has effectively passed on the entire GST impact instantly.
It feels price changes vary across portfolio are implying 11 percent drop in end-prices and should help volume growth.
Meanwhile, last week, the operator of Dominos Pizza and Dunkin Donuts chains in India reported over two-fold jump in its standalone net profit at Rs 48.47 crore for the quarter ended September 30.
The company had posted a net profit of Rs 21.56 crore during the same period of the previous fiscal, Jubilant FoodWorks said in a regulatory filing.
Net sales during the quarter grew 9.17 percent to Rs 726.63 crore as against Rs 665.54 crore in the year ago period.
“We made good progress towards our goals during the quarter in both Domino’s Pizza and Dunkin Donuts. The performance strengthens our conviction in the strategy for growth unveiled earlier in the year, and reinforces our belief in the potential for the JFL business in the time ahead,” Jubilant FoodWorks Chairman Shyam S Bhartia had said.
The Domino’s same-store-sales growth for the quarter stood at 5.5 percent against 6.5 percent in previous quarter and 4.2 percent in year-ago.
At 10:48 hours IST, the stock price was quoting at Rs 1,736.10, up Rs 18.75, or 1.09 percent on the BSE.