Shares of Jubilant FoodWorks rose as much as 5.5 percent on Thursday as Morgan Stanley's upbeat commentary cheered investors.
At 12:46 pm, shares of Jubilant FoodWorks, operator of Domino's Pizza and Dunkin Donuts in India, were trading 3.3 percent higher at Rs 3,543.2 on BSE.
Morgan Stanley has an 'overweight' rating on shares of Jubilant FoodWorks with a target price of Rs 5,000 - a 46 percent upside from Wednesday's closing price.
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The foreign brokerage said that its channel checks suggested that Domino's Pizza India has raised prices by 5-6 percent on an average across its portfolio recently.
The brokerage pointed out that even after the price hike, Domino's prices are lowest among pizza peers. Rather, it has taken the price hike positively as it helps offset some margin pressure without hurting demand.
Domino's India remains focussed on maintaining its value for money proposition, and has taken minimal price hikes since 2016, Morgan Stanley added.
Even though the stock valuation is high, the market will continue to be willing to pay for Jubilant FoodWorks' strong market share gains, technology platform, revenue growth strategy and expanding addressable market, according to the brokerage firm.
The food service company holds the master franchise rights for three international brands, Domino's Pizza, Dunkin' Donuts and Popeyes, addressing three different food market segments.
Jubilant FoodWorks currently operates more than 1,435 outlets for Domino's Pizza, Dunkin' Donuts and Hong's Kitchen and is a market leader in the pizza segment.