Jubilant FoodWorks slips as foreign brokerage initiates coverage with underweight rating

Jubilant FoodWorks fell 2.87% to Rs 1,389.85 at 15:18 IST on BSE on reports that a foreign brokerage initiated coverage on the stock with an underweight rating, citing risk reward mismatch.

Meanwhile, the S&P BSE Sensex was up 115.99 points or 0.41% at 28,558.70.

On BSE, so far 93,000 shares were traded in the counter as against average daily volume of 36,394 shares in the past one quarter.

The stock hit a high of Rs 1,453 and a low of Rs 1,376 so far during the day. The stock had hit a 52-week low of Rs 938.60 on 30 April 2014. The stock had hit a record high of Rs 1,497.95 on 19 November 2014.

The stock had outperformed the market over the past one month till 3 December 2014, surging 14.35% compared with Sensex's 2.09% rise. The scrip had, however, underperformed the market in past one quarter, advancing 3.94% as against Sensex's 4.8% rise.

The mid-cap company has equity capital of Rs 65.54 crore. Face value per share is Rs 10.

According to reports, while the brokerage expects Jubilant FoodWorks to benefit from an improving macro, the recovery is likely to be only gradual as it expects material same-store sales (SSS) growth recovery to be still 8-10 quarters away due to high competition. Jubilant FoodWorks will remain in investment mode, with 400 new stores planned over FY 2014-17, which should dampen near-term returns, the brokerage reportedly said.

Jubilant FoodWorks' net profit declined 12.7% to Rs 29.01 crore on 14.8% growth in net sales to Rs 501.08 crore in Q2 September 2014 over Q2 September 2013.

Jubilant FoodWorks & its subsidiary operates Domino's Pizza brand with the exclusive rights for India, Nepal, Bangladesh and Sri Lanka. The company is India's largest and fastest growing food service company, with a network of 806 Domino's Pizza restaurants (as of 30 October 2014).

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