Don’t sell off your positions in Jubilant FoodWorks Ltd as yet, there’s a lot more steam left in the stock; says CLSA. Jubilant Food Networks has rallied more than 57% in the year so far. CLSA has revised it’s target on the stock to Rs 1,900 from its earlier target of Rs 1,600. The brokerage house has raised the target PE multiple for the stock to 60 times from 55 times saying it is convinced that the company’s measures will yield results.
Sudarshan Sukhani, a technical analyst with o2analytics.com shares CLSA’s viewpoint on the stock. He said, “For some reason people are eating more pizza, I have no idea, but the stock price is in a very strong momentum up move. So, at that point we want to take advantage of the strong momentum. It is a short term buy unlike Adani Ports, but Jubilant Foods is also a buying opportunity.”
Earlier this month, Jubilant FoodWorks Ltd, exclusive India franchisee of Domino’s Pizza embarked on the most significant product revamp strategy for Domino’s Pizza with an investment of ₹100 crore. Pratik Pota, CEO, Jubilant FoodWorks, said: “This is the largest ever product upgrade of our pizzas and we have made a dramatic shift in terms of improving our product quality. As the pizza category in India has evolved, customer’s expectations from the category have also evolved. So we have to make sure that as the largest pizza company in the country, we stay relevant for driving sustainable and profitable growth.”
Jubilant FoodWorks had reported a 25.53 per cent jump in standalone net profit at Rs 23.84 crore for the first quarter ended June 30. The company operates about 1,125 Domino’s Pizza restaurants and plans to add 40-50 stores this year.The share was trading at Rs 1,379.60 up 2.58% since the previous close on Wednesday morning.