Jubilant FoodWorks shares hit 52-week high after Q1 earnings; should you buy, sell or hold?

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Domino's Pizza chain operator Jubilant FoodWorks reported a net profit of Rs 63 crore in Q1FY22 as compared to a net loss of Rs 74 crore during the corresponding period in FY21.

Jubilant FoodWorks shares hit 52-week high after Q1 earnings; should you buy, sell or hold?
The share price of Jubilant FoodWorks hit a fresh 52-week high of Rs 3,399.50 apiece, rising 11 percent in the early trade on Thursday after the company reported better-than-expected earnings for the first quarter of fiscal 2022.
The Domino's Pizza chain operator reported a net profit of Rs 63 crore in Q1FY22 as compared to a net loss of Rs 74 crore during the corresponding period in FY21.
The company’s revenue from operations grew 131 percent YoY to Rs 879 crore led by growth in digital assets and the delivery channel.
The company said the growth was driven by like-for-like sales growth (at 120 percent) and same-store growth of 114 percent in Domino’s Pizza.
EBITDA during the quarter stood at Rs 211.5 crore and its EBITDA margin was 24 percent.
Here’s what brokerages have to say about Jubilant FoodWorks’ stock and Q1 earnings:
Morgan Stanley
Morgan Stanley has an Overweight call on the stock with a target price of Rs 3,236 per share as the company’s Q1 earnings beat the brokerage’s estimates.
The management is optimistic on the near-term outlook. Jubilant FoodWorks accelerated its store addition target of 150- 175 stores in FY22, Morgan Stanley noted, as it remained constructive on medium-term strategy of physical and digital scaling.
Goldman Sachs
Goldman Sachs said that the system sales have almost recovered, while it expects the dine-in revenue to pick up with re-opening.
It maintained a Sell rating given headwinds to earnings growth. It has a target price of Rs 1,293 per share.
Motilal Oswal
With the QSR business in India being at an inflexion point, Jubilant FoodWorks has increased its store expansion guidance, announced investments to boost supply chain, and showed intent to gradually become a food tech company. On the technology front, Jubilant FoodWorks is significantly expanding its teams for customer experience, analytics and product innovation, said the brokerage.
"With its proven and profitable model, we expect Jubilant FoodWorks to be the key beneficiary of favorable trends. We upgrade the rating to Buy with TP of Rs 3,630."
ICICI Securities
"We believe benefits from developing superior-tech capabilities are now visible. We like the focus on growth, developing synergies with new brands and expanded organisational bandwidth. Investments on a strong fleet give it an edge over peers. Popeye’s success is the next potential positive upside trigger. Our positive stance stays - ADD retained; TP 3500," said the brokerage.
At 10:30 am, the shares of Jubilant FoodWorks were trading 10.37 percent higher at Rs 3,380.30 apiece on the BSE.

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