Shares of Jubilant FoodWorks, operator of Domino’s Pizza and Dunkin Donuts, tanked as much as 15 percent on Monday after the company’s board accepted the resignation of Pratik Rashmikant Pota as the CEO and Whole-time Director of the food-service company.

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Discussing the developments, Rahul Arora, Nirmal Bang Instl Equities and Varun Lohchab, HDFC Securities have a different take on how to read this scenario.

While Arora is of the view that this is a 'good buy on dips' time, Lohchab has presented the rationale to reduce ratings on the stock.

Arora reasons that the worst of the commodity inflation may be behind consumer companies.

"Dip on Jubilant Food today is a buying opportunity... Jubilant Food’s SSSg’s grew sharply under Pratik Pota’s watch," he said.

HDFC Securities meanwhile has reduced its ratings on Jubilant Food.

"Weak capital allocation is our key rationale for a negative view on the stock. Jubilant Food’s rich valuation remains a concern for us." Varun Lohchab said.

He also said that the current expansion plans of the company require stable management at the top.

It is noteworthy that Morgan Stanley has also downgraded the stock to underweight from overweight and cut the target price to Rs 2,250 from Rs 5,000 per share.

At 10:15 am, shares of the company were trading 13 percent lower at Rs 2,488 on NSE. They hit a new 52-week low at Rs 2465.05 earlier. The stock has fallen after four days of consecutive gain.

Pota wishes to pursue opportunities outside Jubilant FoodWorks, the company said in an exchange filing. Pota will continue in his current role till Wednesday, June 15, 2022. The board has also initiated the process of identifying his successor, the filing said.

(Edited by : Abhishek Jha)

First Published:Mar 14, 2022 10:26 AM IST