Why Jubilant FoodWorks Stock is a good bet in QSR Sector?

2 min read

Jubilant FoodWorks has gone down by more than 20% from its All-Time High Levels or more than Rs. 1,000 in Rupees terms. The stock price of Jubilant FoodWorks was Rs. 4,577 on October 13, 2021, which came down to Rs. 3,542 on December 29, 2021. Is this fall a warning situation to investors or a buying opportunity? Let’s discuss the company in brief in this short article.

Why Jubilant FoodWorks is a Good Bet:

  • Jubilant Foodworks Declined More than 20% from its All-time High from Rs. 4,577 on October 13, 2021, which came down to Rs. 3,542 on December 29, 2021.
Jubilant FoodWorks- Share Price Movement
Jubilant FoodWorks- Share Price Movement
  • There has been a sharp growth in the Quick-Service Restaurant Industry where Value for Money propositions set up by the Jubilant FoodWorks has played out exceptionally well for customers.
  • Talking about its geographical presence, Jubilant FoodWorks is having 1,435  Domino’s Stores as of the Quarter ended 30th September 2021.
Jubilant FoodWorks- Domino’s Store
Jubilant FoodWorks- Domino’s Store
  • The company is not only has a remarkable physical presence across the country but also Jubilant FoodWorks is having record mobile downloads of its app which is around 7.13 Cr., which is the highest among its competitors like Burger King, etc.
Jubilant FoodWorks- Mobile App Downloads
Jubilant FoodWorks- Mobile App Downloads
  • The key thing to watch here is that the company is not having a dependency on third-party aggregators like Zomato, Swiggy, etc. for its product Delivery.
  • Jubilant FoodWorks is also the leading player in the Pizza Market in India with over 70% market share.
  • Moreover, the company has recently taken a price hike to offset the inflationary pressure across its products of around 5%-6%.

Valuation of Jubilant FoodWorks Stock:

  • The Stock of Jubilant FoodWorks was trading at a premium valuation in the past period, has now corrected highly but remains at premium valuation zone.
  • As of 29th December 2021, the stock is trading at a PE ratio of 108, which is much lower than its 1-year PE of 180, but above 3-Year and 5-Year Median PE of 116 and 86 respectively.

What Should Shareholders Do?

Quick Service Sector (QSR) is a consumption story. Over the past few years, there has been a significant rise in the penetration of this sector. And if one believes in the QSR Sector or the consumption story, this is one of the stocks which should be on the Investor’s radar.

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