JUBLFOOD - Jubilant Foodworks Limited Share Price

Outlook by Management:
Jubilant FoodWorks' management is optimistic about sustained growth, driven by Domino's strong performance, strategic investments in technology/delivery, and expansion of emerging brands. Key highlights include:

1. Domino's India Strength:

• Achieved record sales with 12.5% LFL growth (24.7% delivery LFL) and 33.8% order growth.
• Aggressive store expansion: 60 net new stores in Q3 (2,139 total), entering 19 new cities.
• Launched Chicken Feast range nationally to tap into under-indexed non-pizza demand.
• Digital edge: 14M monthly active users on the app, 46.7k riders for 20-minute delivery.

2. Margin & Cost Management:

• Gross margin dipped 160 bps YoY due to inflation, discounting, and free delivery.
• Targeting 100 bps gross margin improvement via waste reduction, cost optimization, and selective price adjustments.
• Pre-Ind-AS EBITDA margins improving sequentially (up 70 bps QoQ).

3. International Growth:

• Turkey (DPE): Revenue crossed Rs.5B in Q3; inflation easing (64.9% to 42.1%). COFFY surpassed 150 stores.
• Sri Lanka/Bangladesh: Strong recovery (65% YoY revenue growth in Sri Lanka).

4. Emerging Brands:

• Popeyes: Focus on unit economics and high-potential locations. Store expansion tied to premium site acquisition.

5. Strategic Focus:

• Leverage Domino's scale, tech, and delivery infrastructure to drive market share.
• Confident in compounding customer acquisition (55% YoY new users) and repeat orders.

Outlook: Management expects momentum to continue into Q4, with Domino's leading growth and gradual margin recovery. Investments in delivery, innovation, and store expansion remain priorities to sustain dominance in India's QSR sector.

Major Questions and Answers from Jubilant FoodWorks Q3 FY25 Earnings Call

1. Question (Tejas Shah):
"The delivery is gaining traction phenomenally well. But despite multiple interventions on dine-in, that is not responding as expected. Any insights on challenges or competitive landscape differences?"
Answer: Dine-in is improving, with lunch orders at a two-and-a-half-year high due to the Rs.99 meal. Take-away decline is attributed to free delivery shifting customers to delivery. Store experience enhancements and new formats are expected to drive dine-in recovery in 1-2 quarters.

2. Question (Tejas Shah):
"LFL recovery is strong, but margin expansion isn't commensurate. Are split stores or other factors impacting this?"
Answer: Margin pressure stems from four growth investments: product innovation (e.g., extra cheese), higher marketing, matching aggregator discounts, and free delivery. These are deliberate choices to acquire customers and gain share, with margin leverage expected as growth compounds.

3. Question (Tejas Shah):
"Popeyes' four store additions in the festive quarter seem underwhelming. Any plans to scale up?"
Answer: Popeyes' expansion is location-driven, prioritizing prime sites over speed. Unit economics, average sales, and margins are improving. Stores like Delhi's Pacific Tagore exemplify success, with a focus on securing top 100 locations for future growth.

4. Question (Jignanshu Gor):
"What caused gross margin contraction, and can we expect improvement via price hikes or premiumization?"
Answer: Gross margins fell due to higher food costs (new products), inflation, festive discounts, and delivery fee waivers. A 100 bps margin improvement is targeted in 2-3 quarters via waste reduction, packaging optimization, and calibrated discounting.

5. Question (Jignanshu Gor):
"Is Popeyes still finding product-market fit, or is it ready for scaling?"
Answer: Popeyes has strong product-market fit, especially in chicken-centric South India. Growth hinges on securing high-footfall locations (malls/high streets) and replicating Domino's delivery playbook. The brand is poised for expansion with refined unit economics and a dedicated team.

6. Question (Arnab Mitra):
"Can current LFL growth sustain, or will margin recovery efforts slow it?"
Answer: Growth momentum is expected to continue (Q3 to Q4) from new stores, city expansions, and customer acquisition. Margin recovery will come from cost controls and operating leverage, not investment cuts. Absolute EBITDA growth (+11% YoY) reflects underlying strength.

7. Question (Arnab Mitra):
"Why do pre- and post-IndAS EBITDA margins diverge?"
Answer: Pre-IndAS margins improve as rental costs (excluded post-IndAS) grow slower than revenue. Focus remains on pre-IndAS operational EBITDA, which better reflects business health. Future divergence depends on rental vs. revenue growth rates.

8. Question (Percy Panthaki):
"What caused Y-o-Y bill value decline? Is it delivery waivers or down-trading?"
Answer: Entire decline stems from delivery fee waivers, partly offset by packaging charges. No down-trading observed; instead, core pizza sales rose. New customers (55% YoY) and repeat orders signal long-term compounding benefits.

9. Question (Percy Panthaki):
"International segment's net profit contribution appears muted. What's the FY26 outlook?"
Answer: Turkey's hyperinflation accounting causes quarterly volatility, but underlying metrics are strong. Nine-month performance (PAT margin ~7%) aligns with expectations. Margins will track revenue growth as inflation stabilizes and debt reduces.

10. Question (Aditya Soman):
"Why did mature store counts drop sequentially?"
Answer: Mature store counts dip annually by Q4 due to splits/new additions, resetting in Q1. This cyclical trend doesn't reflect underperformance but normal store lifecycle dynamics.

11. Question (Devanshu Bansal):
"Aggressive market share gains"”will this trigger industry consolidation?"
Answer: Muted industry growth favors scale players. Dark kitchens and delivery-focused models face pressure, likely driving consolidation. Domino's delivery moat (20-minute service, 46k riders) strengthens its position.

12. Question (Devanshu Bansal):
"Growing order-revenue gap"”is this sustainable for margins?"
Answer: The gap stems from delivery mix shift and lower order thresholds (Rs.199 minimum). Margin recovery will come from cost controls (rentals, manpower) and operational efficiencies, offsetting delivery cost headwinds.

13. Question (Devanshu Bansal):
"What drove confidence to launch chicken nationally after South tests?"
Answer: South India's post-launch growth (chicken contributes 30% sales) validated demand. Regional customization (wings, Cheesiken meals) addressed preferences, making South a top-performing region and justifying national rollout.

14. Question (Latika Chopra):
"What's the new city expansion potential and store economics?"
Answer: 500+ cities remain untapped, focusing on densification (e.g., Gurgaon adding 20 stores) and smaller districts (e.g., Badaun). New cities maintain 2"“2.5-year payback with lower costs, ensuring margin neutrality.

15. Question (Latika Chopra):
"How is delivery mix evolving between own app and aggregators?"
Answer: Own app engagement is rising (14M MAUs, 28% install growth) due to UX improvements and CRM. Aggregators remain key partners, but app focus ensures better margins and customer retention. Mix specifics undisclosed.

16. Question (Jay Doshi):
"Can pre-IndAS EBITDA keep pace with revenue growth?"
Answer: Domino's mid-teens EBITDA growth is partly offset by emerging brands' losses. Clarity will emerge post-Q4 stabilization, but investments aim to balance growth and margin recovery.

17. Question (Jay Doshi):
"Dine-in order growth vs. revenue decline suggests AOV drop. Why?"
Answer: Decline reflects mix shift within dine-in (take-away falling as delivery grows). Pure dine-in (in-store consumption) is rising, with no material AOV drop. Thaali meals (low base) skew growth metrics.