Buy Jubilant Foodworks: target of Rs 500: ICICI Securities

ICICI Securities research report on Jubilant Foodworks

Jubilant FoodWorks’ (JFL) Q2FY27 confirms that its operating recovery is on track. Domino’s India LFL improved to 4.1% (on a high base of 9.1%), Dine-In and Take-Away (DITA) returned to growth, and Popeyes sustained 53% LFL. India gross margins expanded (110bps) and EBITDA margin held, despite unplanned cost inflation. However, consolidated PAT was flat (standalone +8% YoY), weighed by higher depreciation and lease cost from India expansion and hyperinflation accounting at DP Eurasia. We see a stronger H2, with a soft base and festive demand supporting LFL acceleration towards target of 5–7%. Maintain BUY.

Outlook

We cut our earnings estimates for FY27/FY28 by 9.1%/9.6%. More than half of this cut reflects a higher effective tax rate of 29%/28%, driven by hyperinflation accounting at DP Eurasia. We now model revenue/EBITDA/PAT CAGRs of 13%/13%/18% over FY26–28E. Maintain BUY with a DCF-based unchanged target price of INR 500.