Shares of Jubilant Foodworks, which runs the Domino's chain of restaurants in India, have fallen 10 per cent ever since Coffee Day Enterprises, which runs the biggest coffee chain in India with 1,500-odd stores under the brand “Café Coffee Day” got a nod for Rs 1,150-crore initial public offer from the Securities and Exchange Board of India.
Given the average target price of Rs 1,890, the stock is seen giving an upside potential of 20 per cent. In September, while Indian brokerage firm Nirmal Bang had upgraded its rating on the stock to ‘buy’ from ‘accumalate’, Geojit BNP Paribas had revised its target price upwards by 13 per cent to Rs 1,920.
Coffee Day Enterprises has however mentioned in its red herring prospectus that none of the companies listed in India are engaged in a portfolio of businesses similar to it.
Meanwhile, global peer Yum Brands that operates the Pizza Hut and KFC restaurants worldwide, missed the earnings estimates and hence the latter’s shares crashed 18 per cent in the US.
Yum Brands' sales declined 9 per cent in the domestic market, led by a sharp 18 per cent decline in SSS growth in the July to September quarter. SSS growth in India was the lowest in the last 19 quarters, analysts said.