Shares of the food-service company and the master franchisee for Domino’s Pizza and Dunkin’ Donuts in India, Jubilant Foodworks (NS:JUBI) plunged 14.6% to Rs 2,446.45 apiece at 9:52 am, recording a fresh 52-week low at Rs 2,443.3 apiece in the early session on Monday.
The company’s shares have tanked in response to the news of its CEO and whole-time director Pratik Rashmikant Pota resigning from his post.
In a company filing, Jubilant FoodWorks stated that its board of directors accepted Pota’s resignation as its CEO and whole-time director in a meeting held on March 11, as he wishes to pursue opportunities outside the company.
Post the announcement, several brokerages responded to the company’s sudden leadership change.
JP Morgan (NYSE:JPM) has downgraded its rating on the company due to increasing demand and margin risks. Besides, unexpected resignation from the CEO reflects uncertainty in the company, as the brokerage lowers the FY23/24 EPS estimates by 11%/8%.
It has revised its call on the stock from Overweight to Neutral and cut its target price from Rs 4,025 to Rs 3,000/share.
Brokerage Morgan Stanley (NYSE:MS) has also downgraded its call on Jubilant from Overweight to Underweight, cutting the target price from Rs 5,000 to Rs 2,250/share.
It stated that sudden leadership changes pose a threat to the company’s near-term outlook, putting its strategy in doubt. MS also cut its EPS estimates for FY23/24 by 15%/24%.