Despite second wave Jubilant Food’s performance was encouraging; management inclination to add new brands and expand network should sustain growth

Deal wins to ensure double digit growth; soft near term performance at HCL Tech a dampener but long term prospects remain good
August 2, 2021
Agri pipes sales hit at Supreme due to second wave; long term prospects excellent due to rural demand and pick up in construction; share of value added products moving up
August 2, 2021

Jubilant Foodworks, the India franchisee for Dominos Pizza, is a perfect play on changing consumption pattern and rising spends by millennials on restaurants, order in and take away meals. Prior to the second Covid wave, operations were nearly back to normal with takeaways / deliveries being the key positive trend for speedy recovery. However, near term performance will be impacted by the recent lock downs. In dining (30% of sales) are yet to pick up and would be an added growth factor once full normalcy returns. Commodity price inflation is a concern but the company has pricing power. Good long term prospects, launch of new brands / franchises and aim to transform itself to a food tech company are key reasons for an over weight rating on the stock despite to steep valuations. Over the longer horizon, rising competition from food aggregators such as Zomato and Swiggy are threats as they offer incredible home dining options but management has counter strategy in place – 20-07-2021 Price : Rs. 3062.80 Rating: Over Weight Recommendation: Buy

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