Jubilant FoodWorks Sees Bullish Outlook, Target Price Set at Rs 576

Prabhudas Lilladher Maintains Buy Rating for Jubilant FoodWorks

Jubilant FoodWorks, the parent company of Domino's Pizza and Popeyes, has reported a solid fourth quarter performance, with its long-term growth prospects remaining intact. The company's 4Q26 like-for-like (LFL) sales came in broadly in line with the research firm's estimates, while its expansion in gross margin (GM) was driven by a superior SKU mix and lower overheads, leading to a better-than-expected EBITDA and profit after tax (PAT).

The company's Popeyes business continued to witness strong traction, with a year-on-year (YoY) same-store growth (SSG) of 28% in FY26. This momentum has sustained into Q1FY27, indicating a favorable trend for the company. DP Eurasia, another key business segment, has also shown improvement, with the company now fully servicing acquisition-related debt through internal cash flows. However, the healthy performance in Domino's has been partially offset by softer trends in Coffy, amidst stiff competition.

Management commentary remains healthy, with Popeyes expected to contribute around 1-1.5% to the company's overall growth in the near term. Jubilant FoodWorks plans to open around 300 stores (including Popeyes) in FY27. While near-term margins may remain under pressure due to wage inflation and geopolitical headwinds, management is confident of delivering a 200bps EBITDA margin expansion over FY24 adjusted EBITDA, led by operating leverage and supply chain initiatives.

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Key Highlights

Outlook

The research firm estimates a 33.1% standalone earnings per share (EPS) compound annual growth rate (CAGR) over FY26-28 on a low base. Based on the estimated EPS growth, the firm has assigned a 26x FY28 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBIDTA) multiple to standalone numbers, arriving at a value of Rs508 per share. Additionally, the firm has assigned a 22x price to earnings (P/E) multiple to DP Eurasia's FY26 earnings, resulting in a value of Rs68 per share. The firm has also assigned a stock price of Rs576 (Rs584 earlier) based on a sum-of-the-parts (SOTP) approach.

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Jubilant FoodWorks is well-positioned to gain from the expected improvement in consumer demand in the quick service restaurant (QSR) space. The research firm retains its Buy rating for the company.