Technical Analysis of Indian Equities by Nooresh

Jubilant Foodworks – Too Expensive –Highly Speculative !

This has been one of the favorite stocks of speculators over the last many months.


If one has to simply look at the fundamentals it really hits us as to why would you buy this stock at 850-900 levels ?

Things to note.


-> Current Market Cap of Jubilant Foodworks – 1.1 billion US dollars or around 5500 cr Re.  Current Market Cap of Dominos USA – 1.69 billion dollars. (


-> Current P-E of Dominos USA around 18-19. Current P-E of 68-70 for Jubilant Foodworks.


There are just too many Indian companies available at 5000-6000 crores market cap like Godrej Inds, Indian Hotels, Tata Global who have been around for decades :). Although there is no comparison to above but it clearly tells you the size of Jubilant Foodworks.


Now certain other things which create big doubts on the company.


- > Delivery Volumes are only 10-25%. Implies 75% of the trades are squared of intra day !!! I doubt Institutions trade in it 🙂 so is some one manipulating ? circular trading ?


-> Total Daily Volumes on NSE itself is around 15-25 lakhs and another 8-10 lakh shares on BSE. This gives a total volume of around 25-30 lakhs every day.


-> Total No of shares is around 6.4 cr of which 59% is promoters and 20% with institutions which leaves us with a floating no of shares of around 1.2 cr shares. Many other institutions would be holding less then 1%.

On so many days it has even traded as high as 50 lakh shares 🙂 in a day. That is way too high for an investors comfort


-> Promoters have sold some stake at higher levels.


13-Sep-11 Jubilant Foodworks Ltd Jubilant Enpro Pvt Ltd Sell 170,000   02-Sep-11
09-Sep-11 Jubilant Foodworks Ltd Jubilant Enpro Pvt Ltd Sell 27,392   29-Aug-11
07-Sep-11 Jubilant Foodworks Ltd Jubilant Enpro Pvt Ltd Sell 40,000   26-Aug-11
06-Sep-11 Jubilant Foodworks Ltd Ajay Kaul Sell 55,000   02-Sep-11
02-Sep-11 Jubilant Foodworks Ltd Jubilant Enpro Pvt Ltd Sell 102,220   17-Aug-11


Majority of the stake has been sold from 17 August to 13 September. The stock price then was between 920-1020.

Mr Ajay Kaul ( CEO ) selling of 55000 shares was between 02 September to 06 September. The stock price was at 950-1020 for that 4 days only 🙂 and once it was reported to the exchange the stock took a hit it seems or mr Ajay Kauls timing was brilliant. He has only sold part of his holding apparently.


Stock subsequently hit 650 and is now back to 850-880.


-> The promoter holding has declined from 62.07% to 58.88 % as of last quarter and ma fall further in this quarter.

-> The company does sales of less then 1000 crores and with decent NPMs. As the business grows which people expect the NPMs are set to drop is what i feel.

-> Even if the company keeps growing at current pace the stock price is way too high at 850-900 bucks and is already factoring high growth for next 1-2 years.



All in all there are way too many question marks in the above stock. How long can the company grow profits at 50% y-o-y. What if the NPMs drop. The growth takes a hit due to competition or some undue announcement. The delivery volumes show lot of speculative interest.


There seems no Margin of Safety and Way too much Risk in the above stock. !!! 🙂 ---- My view its a clear AVOID !!! Even for the day traders take CARE 🙂


Happy Investing,


Nooresh Merani

Article by Nooresh Merani

Nooresh has written 2801 articles.

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{ 19 comments… add one }
  • pratiek October 12, 2011, 11:52

    great analysis sir i think this analysis also send to mr RJ so that he also realise the real fact.

  • dharani October 12, 2011, 19:57

    all are bearish on stock,,but why it is raising &&& note this point
    For example Jubilant Foodworks had a market cap of Rs 6,500 crore, which I don’t think was justified. Given any stretch of imagination with 350 or 400 outlets it has been given a valuation of Rs 15 crore, which is costing them about Rs 50 lakh.

    • nooresh October 12, 2011, 20:30

      Hi Dharani,

      The note is just to give a perspective to investors 🙂

      Earlier had initiated a sell at 820 it dropped to 650 but we did not trade it 🙂 Basically an avoidable stock for investors and that is my view which is irrespective of whether it rises or falls

  • pratiek October 12, 2011, 20:41

    sir, i done one analysis of stock named ranbaxy there is double top @ 524 and tripple bottome @ 511. what u say one can hold with sl of 511 and looks good bz from last 2 days market increase but its at same price so i think it will shoot up in near future if it close above 525 and not to break 510.

  • dharani October 13, 2011, 10:01

    thank you sir,
    bengal &assam company …is it right time to accumulate slowly

    • nooresh October 14, 2011, 21:21

      hi dharani,

      No doubt on the fundamental of the stock but it will test patience.

  • imtiyaz October 13, 2011, 10:39

    What about SKS microfinance, can we do bottom fishing in that script

    • nooresh October 14, 2011, 21:21

      NO view on the stock

  • Hari October 13, 2011, 10:59

    What is your sense on RPL ?

    • nooresh October 14, 2011, 21:20

      At Hari,

      Do you want to make any sense of your questions?

  • sangram October 13, 2011, 11:00

    sir how does gdl look fundamentally for medium term and pls give your technical view on it? I am planing a bulk buy on it please suggest

  • Gaurav October 13, 2011, 11:03

    Hi Nooresh,

    Can we buy Camlin at 45? Any reason why it is falling at this pace?


    • nooresh October 14, 2011, 21:20

      Well the stock is a buy provided you have patience for long time to come.

      The open offer is over.

  • Gandhe srinvas October 13, 2011, 17:49

    Dear Nooresh

    Need Views on the below mentioned stock for extreme short term i.e.,
    May be this expiry

    KS oil

    Thanks in advance.

    • nooresh October 14, 2011, 21:19

      Hi Gandhe,

      Have no view on expiry and all the 3 stocks are not which i would like to speculate on. So no views

  • sangram October 13, 2011, 21:20

    sir how does gdl look
    fundamentally for medium term
    and pls give your technical view on
    it? I am planing a bulk buy on it
    please suggest?

  • sangram October 14, 2011, 13:30

    sir pls reply about gdl

    • nooresh October 14, 2011, 21:18

      GDL — The stock has given a good breakout. So accumulate slowly with medium to long term view. This is not a trending market to buy full quantity at one shot

  • jagdish October 15, 2011, 02:02

    hello sir mere pass hind dor olover 2300 share che me 46 RS ma buy karela che pls mane aama 3 month ma ketlo profit madse pls advise


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