1. Morgan Stanley, Macquarie and CLSA bullish on this midcap after strong Q2 profits

Morgan Stanley, Macquarie and CLSA bullish on this midcap after strong Q2 profits

Global research firms such as Macquarie, Morgan Stanley and CLSA remain bullish on the shares of Jubilant FoodWorks, after the company announced a two-fold rise in net profit in the latest quarter.

By: | Published: November 14, 2017 10:01 AM
Jubilant Foodworks, Domino's Pizza, Dunkin Donuts, india, Dunkin in FY18, EBITDA margins, Pratik Pota Jubilant FoodWorks’ shares have doubled since January this year. (Image: Reuters)

Global research firms such as Macquarie, Morgan Stanley and CLSA remain bullish on the shares of Jubilant FoodWorks, after the company announced a two-fold rise in net profit in the latest quarter. For the quarter ended 30th September 2017, Jubilant FoodWorks, exclusive India franchisee of Domino’s pizza, reported over twofold rise in net profit at Rs 48.47 crore for the quarter ended September 30, 2017 against Rs 21.56 crore in the corresponding quarter last year. CLSA has a buy on the shares with a target price of Rs 2,200. Jubilant Foodworks shares were trading flat at Rs 1,707 on Tuesday morning. CLSA’s target price implies an upside of more than 28% from the current market prices. Notably, the shares have doubled since January, as against BSE Midcap returns of 37.4% in the same period. CLSA says that the management’s strategy to employ smart pricing instead of price hike is a growth trigger. According to CLSA, Jubilant FoodWorks’ management has customer satisfaction and and cost optimisation as its top priority.

Track live stock price: Jubilant FoodWorks

Morgan Stanley has an overweight rating on the shares with a target price of Rs 1,900. Notably the earlier target was Rs 1,780. Morgan Stanley target price implies an upside of more than 11% from the current market prices. According to Morgan Stanley, the company is likely to sustain its strong Q2 margins. Notably, total income of the company jumped 9.10 per cent year-on-year to Rs 730.28 crore in Q2FY18 over Rs 669.82 crore in Q2FY17.

Morgan Stanley has raised estimates by 11-14%, as it believes that Jubilant FoodWorks will sustain its strong Q2 performance. Macquarie too maintains an outperform rating on the shares with a target price or Rs 2,005. Macquarie’s target price implies an upside of more than 17% from the current market prices. For FY17-20, Macquarie has increased the EBITDA estimates by 3-8%.

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