Volume growth to spice up gains for Jubilant, Westlife

Expectations of high same-store sales growth and improving margins led to higher investor appetite

Stocks of quick service restaurants Westlife Development, Jubilant FoodWorks and Speciality Restaurants have been hitting their 52-week highs this week on expectations that improving demand and new offerings will sustain volume growth going ahead. This, coupled with the recent trigger of revisions in the goods and services tax (GST) rate to five per cent from the earlier 18 per cent should help bring down overall prices.

Given that the new rates are without the benefit of input tax credit, companies such as Jubilant (Domino’s) have raised prices (before taxes) to negate the impact. While this will be neutral as far as