Jubilant FoodWorks stock is overvalued: Deepak Shenoy

In a chat with ET Now, Deepak Shenoy, Founder, Capital Mind, shares his views on Jubilant Food. Excerpts:

ET Now: Jubilant Food was seemingly a forgotten stock but just a 2% positive same-store sales growth has led to a bumper move in Jubilant in the last couple of weeks and this is stark contrast to what some of the others have done, is it like an oasis in a desert but which will get sold into very soon or do you believe that the structural uptick is now underway?

Deepak Shenoy: To be honest Jubilant Foodworks does not really behave like a stock that act so much on fundamentals. So, I am guessing the 2% uptick must have come against the fact that everybody expected a 10% down tick. We think the stock is overvalued but it is like, be this overvalued level for a really long time so it is a momentum play and for momentum Jubilant Life is a fantastic play.

Having said that, 2% same-store sales growth is not much. They had a price increase a while back as well, so in that context it is not looking great at just the raw numbers but on a relative basis, it is like if you want to play the food QSR business, you will have to buy and you have to pay a premium for that.