Jubilant FoodWorks Limited
Q1 FY26
Call date · August 13, 2025
1 · Management Commentary
Key Positives
- Strong start to FY26 despite challenging demand environment; consolidated revenue at INR 2,260 crores, up 17% YoY.
- Like-for-like growth of 11.6% YoY for Domino’s; third consecutive quarter of double-digit LFL growth.
- 71 net new stores added, network now at 3,387 stores across geographies.
- Pre-Ind AS EBITDA margins improved YoY; pre-Ind AS EBITDA up 18.2% to INR 292 crores (margin 12.9%).
- Robust digital engagement: 15 million monthly active users (+21.5% YoY), 12.3 million app installs (+19.4%), 37 million loyalty members (+48.6%).
- Turkey business delivered INR 519 crores revenue with 9.4% PAT margin; healthy cash flows and profitability.
Key Negatives
- Gross margin dipped due to value-led pricing mix shifts, extended IPL season, and success of Big Big Pizza.
- Stand-alone EBIT and PAT over a 3-year period have seen muted or negative growth despite strong topline.
- Margin pressure from new product launches and promotional activity.
Forward Guidance
- Capex: High cycle of commissary capex largely behind; focus shifting to store expansion and technology. Plan to open next 1,000 stores in 3 years.
- New products: Continued innovation in menu (e.g., Chicken Burst pizza, Big Big Pizza, lunch offerings).
- Popeyes: Expansion into West India, healthy pipeline for Q2; focus on improving unit economics and profitability.
- Revenue/margin outlook: Expecting margin improvement as mix normalizes and supply chain efficiencies kick in; drag from emerging formats to halve in 12–18 months.
- Strategic initiatives: Accelerating digital leadership, operational excellence, and leveraging technology for cost and productivity gains.
2 · Q&A Highlights
Q 1 (Composite): Why has the company not taken price hikes despite strong SSG, and what is the approach to pricing?
A (Management):
• Calibrated price increases taken in select areas; focus is on growth and store penetration rather than immediate price hikes.
• Inflation remains benign; profitability is improving through operating leverage and cost discipline.
• Price increases will be considered at the right time, based on analytics and consumer sensitivity.
Q 2 (Composite): What is the impact and effectiveness of the loyalty program?
A (Management):
• Loyalty program is driving higher frequency and long-term value from loyal customers (especially those with 4+ orders/year).
• Main benefit is increased frequency and retention, not AOV; program is a key driver of digital asset growth.
Q 3 (Composite): How sustainable is the double-digit LFL growth given the high base, and what are the drivers?
A (Management):
• Base effect matters, but growth is driven by innovation, digital investments, free delivery, 20-minute delivery, and operational rigor.
• Confident that measures taken will sustain growth beyond base effects.
Q 4 (Composite): What is driving the divergence between delivery and dine-in channels?
A (Management):
• Global trend toward eating QSR food at home, accelerated by aggregators and urbanization.
• Dine-in is growing at a system level, but carryout has shifted to delivery due to free delivery offers.
• Store formats and sizes are being calibrated to local demand patterns.
Q 5 (Composite): What explains the gross margin decline and what is the outlook for profitability?
A (Management):
• Gross margin dilution due to Big Big Pizza, extended IPL promotions, and new chicken products.
• Supply chain efficiencies are providing tailwinds; majority of margin impact from new products, which are being recalibrated.
• Expect margins to improve as mix normalizes and cost initiatives take effect.
Q 6 (Composite): What is the capex outlook and how will it shift going forward?
A (Management):
• Commissary capex cycle largely complete; future capex to focus on store expansion and technology.
• Store capex per unit has declined 10–15% annually over last 3 years; more landlord contributions expected.
• Overall capex to moderate but remain robust due to aggressive store rollout plans.
Q 7 (Composite): What is the progress and outlook for Popeyes and other emerging formats?
A (Management):
• Popeyes has made strong progress in team building, delivery infrastructure, and unit economics; expansion into Mumbai and West India underway.
• Drag from emerging formats expected to halve in 12–18 months as unit economics improve and expansion is calibrated.
Q 8 (Composite): How is the competitive landscape evolving and what are the company’s differentiators?
A (Management):
• Focus remains on internal execution, innovation, and customer experience rather than competition.
• Continued investment in product platforms, digital, and operational excellence; no plans for dark stores.
3 · Other Key Numbers
- Group system sales: INR 2,671 crores.
- Domino’s India: 61 net new stores; now in 484 cities.
- Stand-alone revenue: INR 1,702 crores (+18.2% YoY).
- Domino’s India revenue growth: 17.7%; order growth: 17.3%; LFL growth: 11.6%.
- Delivery LFL growth: 20.1%.
- Mature store ADS: INR 85,396.
- Delivery channel growth: 24.6% YoY; dine-in growth: 2.5% YoY.
- Stand-alone pre-Ind AS EBITDA: INR 205 crores (margin 12%, +42 bps YoY).
- Consolidated and stand-alone PAT growth: 59.8% and 29.5%, respectively.
- Turkey business: INR 519 crores revenue; 9.4% PAT margin; Coffy in Turkey: 167 cafes in 38 cities.
- Store size in metros: 800–1,200 sq. ft.; in Tier 3/4: up to 1,500 sq. ft.
- Annual capex (stand-alone, last 3 years): INR 700–800 crores.
- Technology and supply chain investments expected to yield further productivity and margin benefits.
- Drag from emerging formats on margins: ~200 bps in FY25; expected to halve in next 12–18 months.
- No specific gross margin improvement quantified; supply chain cost at all-time low, ~50 bps tailwind.
- No disclosure of per-store capex in absolute terms; 10–15% annual reduction cited.