220 times P/E! Yet, investor appetite for this pizza maker is only growing
Sep 15, 2020
NEW DELHI: Covid-19 might be having a devastating impact on the revenues of quick service restaurants (QSRs), but the shares of this pizza maker have climbed 41 per cent year to date and 85 per cent in the last one year, suggesting no stress on the stock whatsoever.
This is even when the stock commands a trailing 12-month earnings per share of 220 times! This means an investor is paying Rs 220 for every Re 1 earned by the company in last 12 months.
The QSR, which commands a 72 per cent market share in the organised Indian pizza market last week posted a net loss of Rs 74 crore for June quarter, but that did not stop the stock from rallying 5 per cent that day.
This company is Jubilant FoodWorks. It owns the master franchise agreement with Domino’s International valid till 2024 and renewable thereafter for 10 years. The company also has exclusive rights for developing and operating the Dunkin’ Donuts restaurants in India.