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On Thursday, Jubilant Foodworks Ltd (NSE:JUBI:IN) saw its price target increased by CLSA from INR499.00 to INR519.00. Despite the higher price target, the firm maintained its Underperform (4) rating on the company’s shares. CLSA’s analysis followed Jubilant FoodWorks’ fourth-quarter financial report for fiscal year 2025, which showed a standalone sales growth of 19.2% year-over-year, meeting both the firm’s expectations and the company’s recent business update.
The company’s gross margin, however, contracted by 209 basis points year-over-year, which was anticipated in CLSA’s estimates. Jubilant FoodWorks also reported an 8.3% year-over-year increase in sales per store. Domino’s India recorded a like-for-like (LFL) growth of 12.1%, which was similar to the growth observed in the third quarter but was achieved against a more challenging comparison base.
The earnings before interest, taxes, depreciation, and amortization (Ebitda) for Jubilant FoodWorks exceeded CLSA’s estimates by 6% and aligned with the consensus. Based on these results, CLSA has adjusted its fiscal year 2026-27 forecasts upwards by 3%-6%. The adjustments reflect expectations for a higher margin, which in turn has led to the increase in the target price for Jubilant FoodWorks’ stock.
Jubilant FoodWorks’ performance indicates a continued growth trajectory in terms of sales, although the pressure on gross margins remains a point of concern. The company’s ability to maintain sales growth per store and achieve consistent like-for-like growth with Domino’s India contributes to the positive adjustments in future earnings estimates. Despite the adjustments and the increased price target, CLSA’s rating suggests a cautious outlook on the stock’s performance potential.
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