This Midcap Stock Grew 200% In 5 Years, Shares Can Give 31% Returns, Brokerage Assigns Buy

Prabhudas Lilladher has assigned a "Buy" on Jubilant FoodWorks Limited's stock for a target price of Rs 610 apiece. According to the given target price, if you buy the stock at the current market price, it would likely give you a return of up to 31%. It is a mid cap Food Services Sector stock that operates in the restaurant and QSR industry having a market cap of Rs 33,949.04 crore.

Stock Outlook & Returns over the past 5 years

The stock's current market price is Rs 514.50 apiece on NSE. The stock's recorded 52-week low on NSE is Rs 451.20 apiece, and the recorded 52-week high is Rs 806.40 apiece, respectively. The stock moved down 1.29% in a week and 6.97% in 1 month, respectively. In the past 1 year, the stock has given 26.66% negative returns, whereas, in 3 years, it gave 58.11% positive returns. The stock has given a maximum 200.92% multibagger return.

Risk-reward favourable as headwinds priced in, Buy for 610 target price

Prabhudas Lilladher has said, "We cut our FY23/FY24/FY25 EPS estimates by 9.0%/9.9%/11.9% on the back of 3-5% lower system average sales/store, 60-70bps lower EBIDTA margins and lower pace of store additions post ~480 store additions over FY21-23. we believe 3Q23 demand pressures are transitionary, however higher competition requires JUBI to increase innovation and consumer value proposition which will limit pricing actions in the near term.

While the scalability of Ekdum, Hong's Kitchen, and Dunkin Donuts remain doubtful, Popeyes is showing encouraging consumer response. "We expect more clarity to emerge with regards to store expansion even though it will take a few more years for it to achieve profits. JUBI has significantly underperformed QSR segment and risk-reward seems favorable at 38xFY25 EPS. We believe JUBI's strength in Pizza market, pick up in demand, and success in Popeyes can change the course over the coming few quarters. We estimate 26.4% PAT CAGR over FY22-25 and assign a DCF-based target price of Rs610 (Rs685 earlier). Retain BUY," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.