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    Jubilant FoodWorks stock plunges 7% to hit 52-week low. What should investors do?

    Synopsis

    The company's EBITDA (earnings before interest, tax, depreciation and amortisation) stood at Rs 290 crore, while margins declined 457 basis points to 22%. The performance during the quarter was mainly impacted due to high inflation.

    Jubilant FoodWorksAgencies
    Shares of Domino’s India, Jubilant FoodWorks plunged nearly 7% to hit a 52-week low at Rs 425 in Thursday's trade after the company posted a 36% fall in net profit at Rs 88 crore for the December quarter of 2022. The net profit was Rs 137 crore in the same period last year.

    Jubilant Foodworks saw a 10% growth in revenue from operations to Rs 1,316 crore, driven by growth in orders for Domino’s.

    The company's EBITDA (earnings before interest, tax, depreciation and amortisation) stood at Rs 290 crore, while margins declined 457 basis points to 22%. The performance during the quarter was mainly impacted due to high inflation.

    During the quarter, the company opened 64 new stores in India, resulting in a network of 1,814 stores across all brands. With the addition of 60 new stores and entry in 16 new cities, Domino’s India has expanded its network strength to 1,760 stores across 387 cities.

    On a year-to-date basis, Jubilant FoodWorks's stock has fallen over 14%. It has also declined over 34% in the last one year.

    Should you buy, sell or hold Jubilant FoodWorks stock? Here's what analysts say:

    Kotak Institutional Equities

    Kotak Institutional Equities has an add rating on Jubilant FoodWorks with a target price of Rs 530.

    "Jubilant FoodWorks' 3Q print was weak, as the discretionary slowdown resulted in a further deceleration in revenue growth, peak inflation and adverse operating leverage impacted margins," it said.

    HDFC Securities
    HDFC Securities has a reduce rating on Jubilant FoodWorks with a target price of Rs 475.

    "Jubilant’s Q3 performance was a miss on all fronts. Revenue and LFL YoY growth was at 10% and 0.3% vs. the expectation of 12% and 4.5%. We were building up a weak consumption trend, but it came sharper than expected. We believe the EBITDA margin will remain under pressure," it said.

    Motilal Oswal

    Motilal Oswal has a buy rating on Jubilant FoodWorks with a target price of Rs 575.

    "Longer-term opportunity in QSR remains immense and JUBI with its moats is poised to take advantage of the same. Valuations, after a steep stock price correction of 45% from its peak appear reasonable at 25xFY25 EV/EBITDA for a business that can compound earnings at 20% and has ROE levels superior to QSR peers and other retail companies," Motilal Oswal said.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)




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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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