Shares of Jubilant FoodWorks Ltd. fell sharply during early trade on Tuesday after the company’s fourth quarter business update showed weaker like-for-like growth momentum in India.
Consolidated revenue grew 19% year-on-year to Rs 2,506 crore in the January-March period. Domino’s India recorded a like-for-like (LFL) growth of 0.2% for the quarter. LFL growth, or comparable sales, measures revenue growth from existing, established business operations over a specific period, excluding distortions from new store openings, closures, acquisitions, or currency fluctuations.
Analysts at Macquarie expect the India operating margin to come under pressure given weaker LFL growth momentum even as Turkey business looks encouraging. They flagged concerns about weakness in India despite the benefit from the T20 Cricket World Cup, which occurs once in two years.
Jubilant FoodWorks faces limited room to expand delivery salience from current levels and headwinds from an adverse base for growth, the brokerage said.
During the quarter, net 69 stores were added to the JFL group network, taking the total store count to 3,663. Domino’s India added 59 new stores and Domino’s Turkey four.
Share Price Movement
Jubilant FoodWorks share price declined as much as 8.9% to Rs 420.30 on the NSE, compared to a 0.6% decline in the benchmark Nifty 50. The stock is down 23% on a year-to-date basis.
Out of the 31 analysts tracking the company, 22 have a ‘buy’ rating on the stock, four recommend a ‘hold’ and five suggest a ‘sell’, according to Bloomberg data. The average of 12-month analyst price targets is Rs 629, which implies a potential upside of 47%.
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