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Karvy Stock Broking
Jubilant FoodWorks (Buy)
CMP: ₹1,736.50
Target: ₹2,040
High contribution of unorganised sector and lower penetration of QSR (quick service restaurants) especially of the pizza delivery players presents high growth opportunity for Jubilant FoodWorks Ltd (JFL). In addition, favourable demographic mix, increasing population of women work force and changing consumer habits is likely to accelerate revenue traction for QSR industry going ahead. JFL being a leader in pizza and pasta industry, is likely to benefit from these factors.
Though, unfavourable business conditions continues to pressurise JFL business, the management is confident about positive SSS (same store sales) growth for FY16E. We continue to believe that the change in business conditions and uptick in the general domestic markets especially in the urban economy would support JFL to record increase in SSS growth. With positive SSS growth we believe that the operating efficiency would improve going ahead.
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