Jubilant Foodworks shares gain 3% on strong like-for-like growth in Dominos; Analysts remain divided

Shares of Jubilant FoodWorks Ltd. gained nearly 3% on Thursday, August 14, even as analysts remain divided on the company’s prospects after its June quarter results.Analysts who are bullish on the stock, expect a potential upside of 23% on the stock. On the flip side, bearish analysts project a downside of up to 19%.

Brokerage firm CLSA has an “underperform” rating on the stock, while Citi and Morgan Stanley have a “buy” and “overweight” recommendation, respectively.

CLSA

CLSA has an “underperform” rating on Jubilant Foodworks with a price target of ₹519 per share.It said the first quarter standalone sales growth of 18% were in-line with estimates. However, the company’s gross margin contracted 199 basis points from the previous year to its lowest level in over 30 quarters, CLSA said.

Jubilant’s sales per store increased 8% with Domino’s India reporting a like-for-like (LFL) growth of 11%.

To factor in the higher costs, CLSA has cut Jubilant’s financial year 2026-2028’s earnings growth estimates by 5% to 11%.

Citi

The brokerage has a “buy” rating on Jubilant Foodworks with a price target of ₹820 per share.

It said double-digit same store growth (SSG) for the Popeyes outlets in South, repayment of debt from the next quarter from free-cash-flow generated in Turkey, were other key positives during the quarter.

The brokerage said it liked the company’s strategy to pursue growth and market share gain.It expects the company to still deliver mid-single LFL, likely ahead of other quick service restaurant (QSR) players, led by tailwinds from new product innovation.

Citi sees a scope for re-rating for Jubilant Foodworks with like-for-like growth continuing to outpace other QSR players and profit growth outpacing revenue growth.

Morgan Stanley

Morgan Stanley has an “overweight” rating on the stock with a price target of 781 per share.

It said Dominos India’s LFL growth of 11.6%, compared to 12.1% and 12.5% in the previous two quarters, each, was ahead of the -8% to 0.5% reported by other QSR peers.

Morgan Stanley said the company’s focus is on increasing penetration and not taking price increases. However, few calibrated price increases will be taken where needed.

The company’s management expects the LFL growth to be good, aided by strategic measures, even as the base gets higher from the third quarter, it said.

Of the 32 analysts that have coverage on the stock,  16 have a “buy” rating, nine have a “hold” rating and seven have a “sell” rating.

Shares of Jubilant FoodWorks were 2.7% up at ₹657.25 apiece. It has declined 11% this year, so far.

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