Buy Jubilant FoodWorks; target of Rs 532: Prabhudas Lilladher

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Steady demand outlook with improving consumer trends, driven by 5-7% full-year LFL growth and healthy gross margin expansion.
  • Limited margin impact from inflationary pressure, supported by price hikes, superior mix, and supply chain efficiency.
  • Continued robust performance and scale-up in Popeyes, with a current revenue run rate of ~Rs3bn and SSG > 50%.
  • Operating leverage and supply chain initiatives are expected to drive ~200bps EBITDA margin expansion over FY24 adjusted EBITDA.

Thesis Validation Checklist

To validate the investment thesis, investors should watch for: steady demand growth, gross margin expansion, successful scale-up of Popeyes, and operating leverage driving EBITDA margin expansion. Key signals include LFL growth, gross margin trends, Popeyes' revenue growth, and EBITDA margin expansion. Investors should also monitor the company's ability to manage inflationary pressures, maintain supply chain efficiency, and execute its growth strategy.