Jubilant FoodWorks Limited

About: Jubilant FoodWorks Limited is one of the famous names in Fast-Moving Consumer Goods (FMCG) companies, which is making its way up at a rapid pace. As we know they have two International brands franchisees under its roof i.e. Domino’s pizza and Dunkin’ Donuts. Domino’s Pizza India operates 1,167 restaurants covering 269 cities across the Country and with bright future of Dunikin’ Donuts, Jubilant FoodWorks Limited will achieve greater heights. To figure out if it is one of the best stocks to buy, we will go through the Financial Health of the company and we will also do Fundamental Analysis of Jubilant FoodWorks Limited.

Financial Health

Balance Sheet of Jubilant FoodWorks Limited, 2018

We all know how does a Balance sheet look like, however, we have picked the selected line items that we need to consider. As we can see, Total share capital and Equity share capital of Jubilant FoodWorks Limited has been remained almost the same wherein they still have zero debt to pay. From that we can definitely give a good stance to this company.

Profit and Loss Statement, 2018

As shown in the Profit and Loss Statement of Jubilant FoodWorks Limited, their Net Sales and Consumption of Raw Materials have been constantly growing. If we talk about P/L before tax and Net Profit, it dipped in the year 2017 but in the year 2019 they just not recovered but managed to double their profits of year 2016. As we can expect more profits in the coming year of 2019, once again we will give a definitely positive stance to them. Up until now, everything looks good, now will go bit deeper into Fundamental Analysis to see if it is a right pick as stock to buy.

Fundamental Analysis

The Current PE of Jubilant FoodWorks Limited is 56.15 where in the Industry PE is much higher at 69.51. That tells us that the current Profit to Earning ratio is lower and it’s a good time to invest in the stock of the company. Additionally, current PE ratio using the CAGR is 38.99 and the one year forward PE using the CAGR seems to be around 31.32. As the forward PE ratio with the help of CAGR is lower, thus, we can again conclude that the current price of the Stock is Undervalued. 

P/E ratio

The Current PE of Jubilant FoodWorks Limited is 56.15 where in the Industry PE is much higher at 69.51. That tells us that the current Profit to Earning ratio is lower and it’s a good time to invest in the stock of the company.

Additionally, current PE ratio using the CAGR is 38.99 and the one year forward PE using the CAGR seems to be around 31.32. As the forward PE ratio with the help of CAGR is lower, thus, we can again conclude that the current price of the Stock is Undervalued. 

Future of the Stock

PB Ratio to Equity

From the Price to book value analysis with the Return on Equity, we can see that PB ratio was 7.89 whereas it increased to 19.77 which is a jump of 2.5 times while the Return on Equity increased by 1.7 times, therefore it shows a great potential the value of stock in the year 2019.

PEG Ratio

From the above analysis, we can see the PEG ratio is 1.92, which is seems to be high but still a good bet that shows the high chances of making us all rich are pretty high too.

Target Price of Jubilant FoodWorks Limited

Target Price

Here, we can see the expected EBITDA would be around 524, which is higher than the current EBITDA i.e. 469 and that makes the forecasted EV as 17000. From all this calculation, we are getting the target price as Rs. 2876.

Conclusion

From the all above analysis, we can Jubilant FoodWorks Limited have a good forthcoming year where they will make good profit. The stock is currently undervalued so we can get this as cheap price. Being a stock analyst, I would say it is one the best stocks to buy and my recommendation would be to buy Jubilant FoodWorks Limited.

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