Shares of Jubilant FoodWorks gained on Wednesday, August 26, after brokerage firm Macquarie upgraded its rating on the stock. The brokerage has upgraded its rating on Jubilant Food to 'neutral' from 'underperform' and has set a target price of ₹520 per share, representing an upside of just 1% from its previous close. According to reports from CNBC TV18, Macquarie cited channel checks pointing to higher same store sales growth (SSSG) in the second quarter compared to the first one as the key driver for the upgrade. The latest brokerage reports also highlight that channel checks point to Q2 SSSG ahead of Q1, indicating continued momentum in the company's performance.
The company reported strong financial results for the first quarter, with consolidated revenue increasing 14.1% to ₹2,569.3 crore and standalone revenue up 9.2% at ₹1,848.5 crore. As reported by CNBC TV18, Domino's India, a Jubilant FoodWorks-operated fast food chain, recorded like-for-like sales growth of 2.5% in the first quarter. The company added a net 76 stores across the group in the June quarter, taking the total store network to 3,712 stores. Macquarie's latest analysis suggests that dine-in led demand recovery and operating leverage gains are driving 20%+ FY26-29E EBITDA CAGR across the quick service restaurant space.
According to CNBC TV18, shares of Jubilant FoodWorks were trading 1.3% up at ₹521.75 apiece following the upgrade announcement. The stock has gained 22% in the past month but is down 5.7% this year. Among the 29 analysts covering the stock, 20 have a 'buy' rating, six have a 'hold' rating, and three have a 'sell' rating. Macquarie noted that demand has recovered over the last two quarters, which drives earnings per share (EPS) and target upgrades across the board. The latest brokerage reports indicate continued EPS volatility from Domino's Turkey operations, though the India LFL recovery and constructive outlook for the Popeye's brand remain key positive factors.
As reported by CNBC TV18, Macquarie sees over 20% FY26-20 earnings before interest tax depreciation and amortization (EBITDA) compound annual growth rate (CAGR) across the space. The brokerage highlighted that the India like-for-like (LFL) recovery and constructive outlook for the Popeye's brand drives the upgrade for Jubilant FoodWorks. Macquarie's latest analysis suggests that prefer Devyani/Sapphire and Westlife in the space given the strength of the KFC and McDonald's formats, with Devyani expected to see a tailwind to EPS from a potential turnaround in the Pizza Hut format post merger of Yum franchisees. The company's India like-for-like recovery and the positive outlook for the Popeye's brand were key factors in Macquarie's decision to upgrade the stock rating.
