Jubilant Foodworks Shares Surge 6% Post Q1 Results as Bernstein Highlights Popeyes as Key Growth Catalyst—Is It Time to Invest?

Jubilant Foodworks experienced a notable surge in its share price, rising approximately 6% following the announcement of its financial results for Q1 FY27. The company reported a consolidated net profit of Rs 97 crore, reflecting a year-on-year increase of 6% from Rs 92 crore. Revenue from operations expanded significantly, registering a 14% growth to Rs 2,570 crore compared to Rs 2,252 crore in the corresponding quarter of the previous fiscal year. This growth trajectory is attributed to robust performance across its brand portfolio, notably continuing order growth from Domino’s India and impressive gains from the Popeyes brand.

The EBITDA for the quarter grew over 10% to Rs 360 crore, driven by a combination of strong revenue generation and controlled operational efficiencies. Domino’s India exhibited 6.5% order growth alongside a 2.5% like-for-like (LFL) increase, albeit underperforming relative to last year’s impressive LFL growth of 11.6%. Meanwhile, Popeyes emerged as a vital growth driver, achieving a staggering 97% revenue growth and more than 40% LFL growth for the third consecutive quarter, which underscores its potential as a significant contributor to the company’s revenue stream.

Market analysts have expressed optimism regarding Jubilant Foodworks’ prospects. Bernstein has reiterated its ‘Outperform’ rating, setting a target price of Rs 680, suggesting approximately 38% upside potential. The analysis highlights Popeyes’ average daily sales approaching Rs 96,000, with some outlets surpassing Rs 1 lakh. Concurrently, Motilal Oswal maintains a ‘Buy’ rating with a target price of Rs 625, citing robust growth forecasts driven by Popeyes, a healthy medium-term outlook, and effective margin recovery strategies amidst commodity inflation. Although the stock has lost ground internationally, it has made notable gains over shorter timeframes, indicating a possible correction in investor sentiment.

In conclusion, despite some challenges with Domino’s performance, Jubilant Foodworks appears well-positioned for future growth, primarily bolstered by its expanding Popeyes brand. The focus on productivity gains and supply chain efficiencies appears to mitigate the adverse effects of inflation, fostering a favorable environment for sustained profitability and investor confidence moving forward.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)