Jubilant Foodworks shares slipped 2.05% at Rs 466.90 around 10.38 am after it reported a 74% plunge in the overall net profit for the April-to-June quarter. Jubilant Foodworks’ net profit is estimated at Rs 28.9 crore.

CLSA has a ‘sell’ rating with a target price of Rs 460 per share. The brokerage firm mentioned that Jubilant Foodwork’s margins resist pressure as input costs increase. The broker does not observe any near-term catalysts for any stock movement.

Elara brokerage downgraded its rating to ‘accumulate’ for Jubilant. The brokerage firm predicts high vegetable costs soon to exclude benefits from price stabilisation of products like milk and cheese. Adding to it, it says that Jubilant Foodworks is now trading at a fair 53x one-year forward P/E, lower than the average primarily amid lower same-store sales.

Morgan Stanley has given an ‘equal-weight’ tag with a target price of Rs 510. The demand outlook relics uncertain for Jubilant Foodworks. The company aims at improving and maintaining margins in the coming quarters.

The business’s consolidated revenue rose 6% to Rs 1,343 crore YoY in Q1FY24, while its EBITDA fell 9.2% on a YoY basis to Rs 304 crore. It increased sequentially by 9.6%. 

The company said that, in challenging inflation with essential input costs holding firm, it expanded its operating margins sequentially amid higher productivity-led cost optimisation initiatives.

The company holds 1838 stores as on June 30. A total of 231 stores were added in the April-June quarter of 2022. In July, Jubilant Foodworks opened Popeyes’ 18th store in Hyderabad, growing its reach to five cities.