Why Jubilant FoodWorks shares surged 8% today, stock price targets & more

Shares of Jubilant FoodWorks Ltd climbed 8 per cent in Tuesday's trade, following a beat on Q2 Ebitda, strong outlier commentary and healthy store additions.

Jubilant FoodWorks added about 50 Dominos stores in the September quarter against 34 in the June quarter, taking the total store count to 2,079. It has maintained the guidance of 180 stores in FY25. On Popeye’s, Jubilant FoodWorks added four stores in Q2 and is looking to reach top 30–40 cities in the next 12–18 months.

Nuvama said Jubilant's positive like-for-like growth in Q2FY25 has set it apart in a challenging market. The company's focus on delivery and innovative strategies has fuelled this success, it said.

"Jubilant's strategic moves to stimulate consumption, from revamped menus to free deliveries, are paying off, revitalising both delivery and dine-in businesses. While the current trajectory necessitates slight adjustments to our FY25E/26E revenue and PAT projections, we remain bullish on the company's turnaround potential," it said.

The brokerage reiterated 'Hold' with a revised target price of Rs 631 against Rs 568 earlier.

Jubilant FoodWorks shares rose 8.15 per cent to hit a high of Rs 650.95 on BSE. The scrip is up 14 per cent in 2024 so far and 23 per cent in the past one year.. 

Emkay Global said despite waiver of delivery charges, Jubilant FoodWorks has largely been able to protect its gross margin over the last six Quarters, albeit with operating cost inflation having caused a 150 bps fall in Ebitda margin in Q2. 

"Here-on, Jubilant expects gradual margin gains, aided by operating leverage. We raise target price by 5 per cent to Rs 680, led by better international business margin and strong commentary for India business," it said.

MOFSL said the QSR industry is still reeling under pressure on unit economics. Jubilant FoodWorks was the beneficiary of healthy traffic growth for the delivery business, it said.

"Delivery is expected to outperform in the near term, which will continue to lead to better growth metrics than Jubilant’s peers in the near term. Operating margin is likely to experience slower recovery owing to JUBI’s continuous reinvestment in its core capabilities," it said.

It suggested a target price of Rs 625 for Jubilant FoodWorks.