Amid margin worries, Jubilant stock to face downside pressure in near term

Aggressive expansion, raw material inflation, and competitive pressures to hit Quick Service Restaurant (QSR) player Jubilant FoodWorks stocks and profitability, say analysts

After a sharp 22 per cent rally in the last week of May, the stock of India’s largest quick service restaurant player, Jubilant FoodWorks, has shed a third of those gains since. While an aggressive store expansion plan and appointment of a new chief executive officer (CEO) are positives from a growth perspective and clear the leadership overhang, margin worries could sustain the downside pressures on the stock in the near term. These concerns have led to a revision of profit estimates by brokerages.

Analysts, led by Anand Shah, of Axis Capital have cut their 2022-23 (FY23) earnings estimates of