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MomentumDeep Value

Which Quick Service Restaurant - QSR Stocks Are Deep Value Picks in Week of May 10, 2026?

In the Week of May 10, 2026, the Quick Service Restaurant - QSR sector has 2 stocks that are underperforming Nifty 500 but have accelerating quarterly earnings. Average value score is 46/100.

Total Stocks
2
deep value
Avg Fundamental
46
/100
Top Pick
Westlife
Score: 47/100
Avg Margin of Safety
Overvalued

Stock Distribution

0 Strong0 Good2 Average0 Weak

Earnings & Valuation Signals

🔄

2 turnarounds: Westlife Foodworld Ltd, Jubilant Foodworks Ltd

⚠️

2 of 2 stocks trading above fair value — limited margin of safety.

AI Research Summary

Sector Pulse

The Indian QSR sector is exhibiting a clear recovery trajectory as of Q3 FY26, characterized by a return to positive Same-Store Sales Growth (SSSG) and record revenue levels. JUBLFOOD reported a 13.3% YoY revenue increase to ₹24.4 billion, while UFBL hit a historical high of ₹377 crores. The demand environment is described as 'improving' by both managements, with UFBL specifically highlighting a 25% surge in dine-in volumes. This volume recovery is critical as it signals a shift away from the delivery-only dependence seen in previous cycles.

Catalysts Playing Out Across the Pack

Operating leverage is the primary driver of profitability this quarter. JUBLFOOD expanded its EBITDA margins by 110 bps to 20.5%, while UFBL reported a 2.2% positive impact from operating leverage. Geographical expansion remains a high-intensity catalyst; JUBLFOOD added 114 stores, and UFBL is seeing its international business grow by 47%. Furthermore, JUBLFOOD is successfully utilizing a 'value-added product mix shift' with premium launches like Sourdough Pizza, which are accretive to gross margins, contrasting with UFBL's strategy of investing in gross margins to rebuild momentum.

What Managements Are Guiding

Managements remain confident, though they have adjusted near-term timelines. JUBLFOOD is targeting 15% standalone revenue growth and a 200-bps EBITDA margin improvement by FY28. However, it has pushed the segment reporting for Popeyes to Q1 FY27. UFBL has slightly lowered its year-end store count guidance to 265 from a previous 270-275 range due to launch timing, but it is aiming for a monthly revenue run rate of ₹125 crores. Capex remains focused on network expansion, with JUBLFOOD planning to spend up to ₹850 crores annually.

Sub-Sector Aggregates

Aggregate metrics reveal a healthy SSSG/LFL range of 5% to 8.2%, with both constituents reporting positive growth. EBITDA margins are clustered between 18.1% and 20.5%, demonstrating the sector's ability to absorb costs through scale. However, gross margins show a wide distribution (66.4% to 74.9%), reflecting different pricing strategies and brand positioning. The sector is also universally preparing for regulatory changes, with 100% of analyzed constituents reporting impacts from the new Labour Code.

Shared Risks (9-type taxonomy)

Commodity and Labor risks are the dominant themes. Inflation in dairy, oil, and flour continues to pressure COGS, as noted by JUBLFOOD. Labor risk is 'Active' across the board due to the new Labour Code; UFBL took a non-cash provision, while JUBLFOOD quantified the impact at 10-15 bps. Management responses involve 'calibrated price increases' and 'productivity-led efficiencies' to mitigate these pressures.

Bottom Line

The sector is in a sweet spot of volume-led recovery and operating leverage playout, evidenced by JUBLFOOD's 94% PAT growth. While commodity inflation and labor regulations pose margin hurdles, the aggressive geographical expansion and premiumization trends provide a strong offset.

Last updated Apr 19, 2026

2 stocks in this sector

View:
Average47/100

Westlife Foodworld Ltd

7.9K Cr
Extremely Overvalued
Earnings Pulse
PAT YoY
+57%
Turnaround
Revenue YoY
+9%
Momentum
Accelerating
▲
Average44/100

Jubilant Foodworks Ltd

31.2K Cr
Extremely Overvalued
Earnings Pulse
PAT YoY
+70%
Turnaround
Revenue YoY
+13%
Momentum
Fading
▼

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Frequently Asked Questions: Quick Service Restaurant - QSR

Based on publicly available financial data. This is educational research, not investment advice.

How many Quick Service Restaurant - QSR stocks are deep value opportunities worth studying?

There are currently 2 stocks in the Quick Service Restaurant - QSR sector that qualify as deep value opportunities worth studying. These stocks are underperforming the market despite showing improving earnings — a classic contrarian research signal.

Which Quick Service Restaurant - QSR deep value stocks appear most undervalued?

The most undervalued Quick Service Restaurant - QSR deep value stocks based on fair value analysis

  • Jubilant Foodworks Ltd — Significantly Overvalued
  • Westlife Foodworld Ltd — Significantly Overvalued
  • Stocks sorted by valuation signal (most undervalued first).

Which Quick Service Restaurant - QSR deep value stock has the highest earnings acceleration?

Quick Service Restaurant - QSR deep value stocks with the highest earnings growth

  • Jubilant Foodworks Ltd — PAT growth +69.8% YoY, earnings turning around (inflection up)
  • Westlife Foodworld Ltd — PAT growth +56.6% YoY, earnings turning around (inflection up)

Why are Quick Service Restaurant - QSR stocks underperforming despite improving earnings?

Quick Service Restaurant - QSR deep value stocks are underperforming despite improving earnings because the market has not yet recognized their earnings recovery. This creates a potential opportunity for patient investors

  • The market often takes 2-4 quarters to re-rate stocks after earnings improve
  • Deep value stocks typically have a negative narrative that suppresses sentiment
  • Improving earnings combined with market underperformance creates a valuation gap
  • When the market eventually recognizes the recovery, re-rating can be significant
  • This is an educational explanation of deep value investing theory.

Which Quick Service Restaurant - QSR deep value stocks have the highest revenue growth?

Quick Service Restaurant - QSR deep value stocks with the highest revenue growth

  • Jubilant Foodworks Ltd — Revenue growth +13.3% YoY
  • Westlife Foodworld Ltd — Revenue growth +8.7% YoY

What is the average PE ratio of Quick Service Restaurant - QSR deep value stocks?

The average PE ratio of Quick Service Restaurant - QSR deep value stocks is 315.3x. Deep value stocks typically trade at lower PE multiples relative to their sector peers, reflecting the market's skepticism about their recovery.

Is the earnings recovery in Quick Service Restaurant - QSR sustainable?

Sustainability indicators for the Quick Service Restaurant - QSR deep value earnings recovery

  • 2 stocks showing turnaround (inflection up)
  • A sustainable recovery shows more stocks accelerating than decelerating.

Is Quick Service Restaurant - QSR a contrarian opportunity worth studying?

Quick Service Restaurant - QSR as a contrarian opportunity — key research signals

  • 2 stocks underperforming the market (contrarian setup)
  • 2 stocks showing turnaround signals
  • Contrarian investing requires patience.

What is the typical recovery timeline for deep value stocks?

Deep value stock recovery timelines vary, but historical patterns suggest

  • 1-2 quarters: Earnings inflection detected, market still skeptical
  • 2-4 quarters: Consistent earnings improvement builds confidence
  • 4-6 quarters: Market re-rates, stock price catches up to fundamentals
  • Some stocks never recover — continuous monitoring is essential
  • Timelines are approximate and based on historical patterns.

What is deep value investing?

Deep value investing is a strategy of studying stocks that are underperforming the market despite showing improving fundamentals (earnings growth, margin expansion). The thesis is that the market has not yet recognized the earnings recovery, creating a potential valuation gap.

  • These stocks typically underperform indices like Nifty 500
  • They show positive earnings trends (PAT growth, revenue growth)
  • The market eventually re-rates them as earnings improvements sustain
  • It requires patience — recovery can take several quarters

The above FAQs are based on publicly available financial data. This is educational research only. Sector Alpha is not SEBI registered and does not provide investment advice.