Jubilant Foodworks - To Buy or Sell - Stock Analysis

Jubilant Foodworks operator of Dunkin Donuts and Dominos Pizza brands in India has been using the innovative technique of delivering the pizzas and it has done a lot of good for their bottom line. But it was quick before Mcdonalds, Pizza Hut caught with it and it has dented its bottom line. Have a look at their results in succeeding paras:

Results

On Thursday reported a year-on-year increase of 11.52 per cent in net profit for the quarter ended March 31 this year. The company announced that its net profit jumped to Rs 32.17 crore in the January to March quarter, from Rs 29.33 crore in the corresponding period of the previous financial year. Net sales jumped from Rs 282.95 crore in the final quarter of 2011-12 to Rs 365.75 crore in the same quarter of 2012-13. Net profit for the full financial year ended March 31 was recorded at Rs 135.10 crore, as against Rs 105.64 crore in the previous financial year. Full year net sales increased from Rs 1,017.11 crore to Rs 1 407.31 crore. Shyam S Bhartia, chairman of Jubilant Foodworks, said that it ended the fiscal year 2012-13 on a positive note amid slowdown in economic activity. Speaking on the topic, Bhartia said, "We ended the fiscal on a positive note in a scenario which was impacted by contracting economic activity at a macro level and restrained consumer spending." But, Jubilant Foodworks shares slipped 7.4 per cent following the announcement of the quarterly results as the reported profit lagged analyst expectations.

Technical Analysis for the Stock

An approximate horizontal trend is broken down. A continued weak development is indicated, and the stock now meets resistance on possible reactions up towards the trend lines. The stock has marginally broken down through the support at rupee 1040. An established break predicts a further decline. Negative volume balance weakens the stock in the short term. The stock is overall assessed as technically negative for the medium long term.

Verdict

Thus it appears that we may see some consolidation in the stock with downward bias in the near short term.

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