Understanding the Current Rating
The 'Sell' rating assigned to Jubilant Foodworks Ltd indicates a cautious stance for investors considering this stock at present. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s attractiveness and risk profile in the current market environment.
Quality Assessment
As of 09 February 2026, Jubilant Foodworks maintains a good quality grade. This reflects the company’s solid operational fundamentals, including consistent profitability and efficient capital utilisation. The return on capital employed (ROCE) stands at a respectable 12.7%, signalling effective use of capital to generate earnings. Such a quality grade suggests that the company’s core business remains fundamentally sound despite broader market challenges.
Valuation Considerations
Despite the strong quality metrics, the stock is currently classified as expensive in terms of valuation. The enterprise value to capital employed ratio is 6.1, which is higher than what might be considered reasonable for a midcap company in the leisure services sector. This elevated valuation is further underscored by a price-to-earnings growth (PEG) ratio of 3.5, indicating that the stock’s price is high relative to its earnings growth potential. Investors should be mindful that such a premium valuation may limit upside potential and increase downside risk if growth expectations are not met.
Financial Trend Analysis
The financial trend for Jubilant Foodworks is currently positive. The latest data shows a 32.2% increase in profits over the past year, demonstrating robust earnings growth. However, this strong profit growth has not translated into stock price appreciation, as the stock has delivered a negative return of approximately -20.7% over the last 12 months as of 09 February 2026. This divergence suggests that the market may be pricing in concerns about sustainability of growth or other risks.
Technical Outlook
From a technical perspective, the stock is rated bearish. Recent price movements show volatility and downward pressure, with a 3-month return of -5.2% and a 6-month return of -12.5%. The short-term momentum indicators suggest caution, as the stock has struggled to maintain upward momentum despite occasional rebounds. This bearish technical grade supports the current 'Sell' rating, signalling that market sentiment remains subdued.
Stock Performance Snapshot
As of 09 February 2026, Jubilant Foodworks Ltd’s stock performance reflects mixed signals. The stock gained 0.48% on the most recent trading day and has shown a 10.26% increase over the past week. However, longer-term returns remain negative, with a 1-year return of -20.73% and a year-to-date return of -2.12%. These figures highlight the stock’s recent short-term resilience amid a broader downtrend over the past year.
What This Means for Investors
The 'Sell' rating from MarketsMOJO suggests that investors should approach Jubilant Foodworks Ltd with caution at this time. While the company’s quality and financial growth remain commendable, the expensive valuation and bearish technical outlook imply limited upside and potential downside risks. Investors may want to consider these factors carefully in the context of their portfolio strategy and risk tolerance.
Sector and Market Context
Operating within the leisure services sector, Jubilant Foodworks is classified as a midcap company. The sector has faced headwinds recently, with consumer discretionary spending under pressure in certain markets. The stock’s valuation discount relative to peers’ historical averages may reflect sector-specific challenges as well as company-specific concerns. Investors should weigh these broader market dynamics alongside the company’s individual fundamentals.
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Summary of Key Metrics
To summarise, as of 09 February 2026:
- Mojo Score: 44.0 (Sell grade)
- Return on Capital Employed (ROCE): 12.7%
- Enterprise Value to Capital Employed: 6.1
- Profit growth over past year: +32.2%
- Price-to-Earnings Growth (PEG) ratio: 3.5
- Stock returns: 1D +0.48%, 1W +10.26%, 1M +4.73%, 3M -5.20%, 6M -12.47%, YTD -2.12%, 1Y -20.73%
Investor Takeaway
Investors should interpret the 'Sell' rating as a signal to exercise prudence. The company’s strong profit growth and quality fundamentals are positive, but the expensive valuation and bearish technical signals suggest that the stock may face headwinds in the near term. Those holding the stock might consider monitoring price action closely and reassessing their positions in light of evolving market conditions. Prospective investors may wish to wait for more favourable valuation levels or technical signals before initiating new positions.
Looking Ahead
Going forward, Jubilant Foodworks’ ability to sustain profit growth and improve its technical outlook will be critical to altering its current rating. Market participants will also watch for any changes in sector dynamics or broader economic factors that could influence consumer spending in the leisure services space. Until then, the current 'Sell' rating reflects a cautious stance grounded in a balanced analysis of quality, valuation, financial trends, and technical factors.
About MarketsMOJO Ratings
MarketsMOJO’s ratings combine quantitative analysis with qualitative insights to provide investors with actionable stock recommendations. The Mojo Score and associated grades are updated regularly to reflect the latest company fundamentals, market data, and technical trends. This approach helps investors make informed decisions based on a comprehensive view of each stock’s current standing.
Final Note
While the rating was last updated on 15 Dec 2025, all financial metrics, returns, and fundamentals discussed here are current as of 09 February 2026, ensuring that investors receive the most up-to-date information to guide their investment choices.
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