Target: ₹700
CMP: ₹613.85
We interacted with the management of Jubilant FoodWorks (JUBI) to discuss the industry outlook, growth prospects for its business, profitability outlook, and other focus areas.
Demand has remained steady but has yet to show material pickup. JUBI expects demand recovery to begin from 3QFY26, supported by GST reforms. Moreover, strong participation in recent sale events such as Big Billion Days, etc, indicates a positive consumer spending momentum. The GST 2.0-driven relief is likely to boost disposable incomes, benefiting discretionary categories such as QSR. JUBI believes that there is ample underlying demand, and the right combination of location, pricing and value will be a key enabler to unlock growth, mainly in rural markets.
JUBI has been the key beneficiary of healthy traffic growth for the delivery business. Delivery is likely to outperform in the near term, which will continue to lead to better growth metrics than those of its peers in the near term. JUBI’s focus on customer acquisition and increasing order frequency has been fueling strong growth in the delivery segment. Value offering and product innovation will continue to drive order growth in FY26.
We remain constructive on the business franchise and higher orientation for growth. However, given the expensive valuations, we reiterate our Neutral rating on the stock with a TP of ₹700.