InvestorQ : I am holding shares of Jubilant Foodworks bought at around the current levels. After the results should I hold on or exit the stock?
Deepa Salunkhe made post

I am holding shares of Jubilant Foodworks bought at around the current levels. After the results should I hold on or exit the stock?

Answer
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Juvina Maggie answered.
1 year ago


Jubilant Foodworks, franchisees for Domino’s Pizza, reported an 8.6% growth in net profits to Rs.74 crore while sales grew by 11% at Rs.865 crore. Actually the profits should have been higher but it had taken a loss of Rs.8 crore on its Sri Lanka stores that it shut down. EBITDA margins improved slightly from 16.4% to 17.1%.

At the current price of Rs.1245, the stock is available at a P/E ratio of Rs.47, which is a reasonable valuation for a high FMCG company. The stock has bounced from its October lows but even at these prices the risk reward is favourable to the investor. You can actually hold on to the stock at current levels considering its strong branch franchise and its same store sales level at 6%.