Jubilant FoodWorks share price closed higher today even after the firm reported a 57.96 per cent decline in consolidated net profit for quarter ended March 2020. Share price of Jubilant FoodWorks rose nearly 6% to Rs 1614 in early trade today compared to the previous close of Rs 1524 on BSE. Jubilant Foodworks stock opened with a gain of 3.06% at Rs 1,571 today.
The stock has gained 4.26% in 2 days. The stock stands higher than 20 day, 50 day and 200 day moving averages but lower than 5 day and 100 day moving averages.
22 of 27 brokerages rate the stock "buy" or 'outperform', two "hold" and five "underperform", according to analysts' recommendations tracked by Reuters.
The operator of fast-food chains Domino's Pizza and Dunkin' Donuts reported a net profit of Rs 32.53 crore in Q4 due to the coronavirus pandemic and subsequent lockdown. It posted net profit of Rs 77.38 crore in January-March quarter a year ago.
Revenue from operations climbed 4.11 per cent to Rs 908.75 crore in Q4 against Rs 872.82 crore in the corresponding quarter of last fiscal.
There was a "sharp drop in revenue" in March due to COVID-19 pandemic and the "consequent national lockdown, which impacted the overall quarter's performance adversely", the company said.
Jubilant FoodWorks CEO Pratik Pota said, "Our strong run in Q4 was interrupted by the onset of coronavirus and the consequent lockdown."
Total expenses in Q4 rose 13.64 per cent to Rs 875 crore against Rs 769.91 crore a year ago. However, brokerages were positive about the prospects of the stock.
"The industry consolidation and efforts to improve unit economics are key positives. The company's numbers for quarter-ended March were impacted due to lockdown. Credible brand positioning with trend toward food delivery should aid market share," said CLSA.
The brokerage retained "buy" call on the stock and raised price target to Rs 1,850 from Rs 1,800 per share. Morgan Stanley said Jubliant Foodworks has superior brand perception and value proposition. It has overweight rating on stock with a target of Rs 1,900.
"The company has higher proportion of delivery and lower competitive intensity. The preparedness for new normal and cost control should drive speedy recovery as management sounded extremely focussed on execution," said Morgan Stanley.
by Aseem Thapliyal