CLSA downgrades stock to 'underperform' after Q1 loss observed in Jubilant Food shares

 

Shares of Jubilant Foodworks, which operates fast-food chains Domino's Pizza and Dunkin' Donuts, were trading in the red on September 4, a day after the company reported a consolidated net loss of Rs 74.47 crore for the June quarter, hit by the closure of stores due to COVID-19 and the lockdown.

The company has posted a net profit of Rs 71.48 crore in the April-June quarter a year-ago, Jubilant Foodworks Ltd (JFL) said in a BSE filing. 

Its revenue from operations declined 59.07% to Rs 388.41 crore during the quarter under review as against Rs 949.11 crore in the year-ago period.

"The impact of COVID-19 was felt severely in Q1 FY21. The nationwide lockdown led to a complete closure of stores initially, with dine-in and takeaway remaining closed for most of the quarter," JFL said in a statement.

The stock was trading at RS 2259.60, down Rs 33.15, or 1.45%. It has touched an intraday high of RS 2268.60 and an intraday low of RS 2204.

Global research firm CLSA downgraded the stock to 'underperform' from 'outperform' and raised the target to Rs 2245 from Rs 2095 per share. It is the view that overall business recovery is likely in Q4 FY21, CNBC-TV18 reported.

The research firm feels that the medium-term upside in the core business is now adequately priced in, adding that the upside option emerges from expansion in adjacencies like a new brand portfolio.