Motilal Oswal is bullish on Jubilant FoodWorks recommended buy rating on the stock with a target price of Rs 3630 in its research report dated dated July 22, 2021.
Broker Research
July 22, 2021 / 03:33 PM IST
An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.
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Motilal Oswal’s research report on Jubilant FoodWorks
While Jubilant FoodWorks (JUBI)’s sales were broadly in line with our expectations, margins surprised positively. The management believes the QSR business in India is at a significant inflection point. In line with this, the company has not only increased its store expansion guidance (150-175 stores from 135 earlier) but also announced investments to boost the supply chain. Moreover, in an interesting new thrust, it has shown intent to gradually become a food tech company. On the technology front, JUBI is significantly expanding its customer experience, analytics, and product innovation teams. The personalization of purchases and identifying triggers for buying in various customer segments would be important growth areas.
Outlook
Given the structural opportunities in the QSR space and JUBI’s dominant positioning with proven and profitable model, we expect JUBI to be the key beneficiary of favorable trends (shift towards branded players). Thus, we upgrade the rating to Buy with TP of INR3,630 (60x Sep’23 EPS).
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