Deutsche Bank bullish on shares of Jubilant FoodWorks on stellar Q2 results

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Published: November 16, 2017 10:04:06 AM

Global research firm Deutsche Bank has raised its target price on the shares on Jubilant FoodWorks, after the exclusive India franchisee of Domino’s Pizza announced a two-fold rise in net profit in the latest quarter.

Jubilant FoodWorks, exclusive India franchisee of Domino’s Pizza has had more than doubled its net profit in the July-Sep quarter. (Image: Reuters)

Global research firms Deutsche Bank has raised its target price on the shares of Jubilant FoodWorks, after the exclusive India franchisee of Domino’s Pizza announced a two-fold rise in net profit in the latest quarter. For the quarter ended 30th September 2017, Jubilant FoodWorks, 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. Deutsche Bank observed that the company has implemented a 6% price hike on products. Deutsche bank says that this was done to mitigate potential margin headwinds due to impact of stranded taxes.

The research firm has increased its target price on the shares to Rs 1,775. Jubilant Foodworks shares were trading at Rs 1,725, up by mo0re than 0.7% on NSE this morning.  Notably, the shares have more than doubled in the year so far. Deutsche bank reiterated that the company remains a top pick in the consumer discretionary space.

Track live stock price: Jubilant FoodWorks 

Other global brokerages such as Morgan Stanley and CLSA remain too remain bullish on the company. CLSA has a buy on the shares with a target price of Rs 2,200. CLSA’s target price implies an upside of more than 27% from the current market prices. According to CLSA, Jubilant FoodWorks’ management has customer satisfaction and and cost optimisation as its top priority.

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 10% from the current market prices. According to Morgan Stanley, the company is likely to sustain its strong Q2 margins. In the September quarter, 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 16% from the current market prices. For FY17-20, Macquarie has increased the EBITDA estimates by 3-8%.

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