ICICI Securities sees nearly 50% upside in Jubilant FoodWorks
The brokerage maintained its ‘buy’ call on the stock with a target price of rupees 630, an upside of 48%.
This is on account of the new store addition of Popeyes, a chain of fried chicken fast food restaurants.
Popeyes' casual positioning fits well with Jubilant's strengths – focusing on value-for-money and delivery, said ICICI.
The launch (a month ago), informed the brokerage, has gained a google rating of 4.4.
ICICI believes the brand will compete fiercely with KFC and wrest some of its market shares.
The market may eventually expand to accommodate both brands; however, KFC does have an air pocket to tackle for now, it said.
Popeyes is also likely to benefit from Jubilant’s existing back-end infrastructure like supply chain, commissary, etc.
Key downside risks are raw material costs turning inflationary and an increase in competitive intensity.
The brokerage maintained its earnings estimates, modelling revenue, and PAT CAGRs at 20% and 24% over FY22-FY24E.
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