Brokers' call: Jubilant gets buy from BNP

BNP Paribas has given a buy rating on Jubilant Foodworks with a target price of Rs 1,250. “We consider Jubilant the most attractive growth opportunity in India’s consumer and retail space for its multiple growth drivers (demographics, lifestyle, urbanisation), attractive payback (less than three years for stores to break even), expansion opportunities into neighbouring markets (Sri Lanka, Bangladesh) and entry into new quick service formats.

We believe that the decline in same store sales growth rate is much more moderate than is being priced in, and acceptance of International QSR formats in Tier 2 and Tier 3 cities remains encouraging. Cost inflation trends, which have been above the historical average, should also moderate, supporting better margin trends in FY14-15. Jubilant stands heads and shoulders above the competition in terms of franchise and opportunities,” it said in a report.