Jubilant Foods : Should we buy and enjoy week end pizza party for dovish Fed and to celebrate possible India World Cup win ?

Jubilant Foods (JF) is one of the favorite high beta trading scrip in our market. From a low of around 937 in April-2014, it scaled a high of around 1720 in Feb-2015 (nearly 80% movement).

Technically, for JF (CMP: 1552), immediate good support is around 1535-1522 area & sustain below that 1500-1476 zone should offer positional support as of now. Consecutive closing below 1476, it may dip to 1400-1327 area (low probability as in the current market conditions).

On the up side, sustain above 1570, immediate target should be 1625-1657 zone & above that short term target could be 1700-1735 and mid term target may be 1778-1850. In the long term (6-12 M), it could scale 2100 zone (For all that, it will have to give at least two consecutive closing above 1700-1735 zone).

JF is fast expanding its network pan India, being the 2nd largest market for Domino's Pizza after US.
Its same stores sales growth (SSSG) is also above market expectations, thanks to recent festive Indian season, a varied menu and Dunkin Donuts. We could also order Domino's Pizza from selected trains now. Favorable Indian demographics and growing income & discretionary spending along with changing life style of young population in the "Shinning India" theme is helping JF a lot. Although so far, it appears that JF is able to keep its competitive pricing power, substantial service tax increase in the budget may be a headwind as with all such fast foods/hotels/restaurants. Going forward, GST may help this industry.

Fundamentally, JF is quite an expensive scrip having historically very high PE (now around 87). But majority of its chains are in  franchise format and therefore, its high Free Cash Flow (FCF) may be supporting its apparent high valuation.

As par BG model of techno/funda valuation metrics, its median value is around 1150 (Stand Alone data) & its EV/EBITDA (MKT CAP METHOD) is around 41. But such fundamental valuation is irrelevant in the current market scenario, unless our market suffers a significant correction.

SCRIP	EPS(TTM)	BV(Act)	P/E(INDS)	LONG TERM	SHORT TERM	MEDIAN VALUE	200-DEMA	10-DEMA
JUBLFOOD	17.8	85.95	51	1114.05	1184.28	1149.16	1367.16	1544.96