Detailed Narrative
Strong Consolidated Performance and Profitability
Jubilant FoodWorks reported a robust Q2 FY26, with consolidated revenue from operations increasing by 19.7% year-on-year to ₹23.4 billion. Consolidated EBITDA grew by 19.5% to ₹4.8 billion. Notably, consolidated PAT from continued operations saw a significant jump of 53.7% year-on-year, validating strategic capital deployment and execution focus. The company aims for a 200 basis point EBITDA margin improvement over three years from FY24 levels.
India Business Momentum and Store Expansion
The India business delivered industry-leading revenue growth of 15.8% to almost ₹17 billion, driven by strong order volume growth of 15% year-on-year. Domino's India achieved a positive like-for-like (LFL) growth of 9.1%, marking seven consecutive quarters of positive LFL growth. The company expanded its network by adding 81 new Domino's stores in Q2, taking the total to 149 for H1 FY26 and extending service to 500 cities. Overall, 93 new stores were added across all brands and markets in Q2, bringing the total store count to nearly 3,500.
Turkey Business Outperformance and International Growth
The Turkey business continued its strong performance, exceeding plans with revenues of ₹5.9 billion and a healthy PAT margin of 10.4%. Domino's LFL growth in Turkey, adjusted for inflation, was 5.6%. The COFFY brand in Turkey is also ramping up, adding five new stores in Q2 to reach a total of 172 cafes. Sri Lanka and Bangladesh businesses also witnessed strong growth, with Sri Lanka reporting an 81% LFL growth.
Product Innovation and Digital Initiatives
Product innovation remains a key growth lever. Following successful launches like Big Big Pizza and Chicken Burst, Q2 saw the introduction of four cheese sourdough pizzas, which received exceptional customer feedback. Digitally, the company achieved a major milestone by launching an ad monetization platform on the Domino's app, attracting iconic brands and nearly 15 million monthly active users. App traffic grew 28%, and the loyalty member base rose to over 40 million.
Dine-in and Takeaway Performance
While delivery channel revenue grew over 20% and delivery LFL was 16.5%, the dine-in segment grew 14% in Q2, and takeaway declined by 19%. Management is actively working on initiatives to boost dine-in sales, including the ₹99 value meal for dine-in during lunch hours. The decline in takeaway is attributed to the attractiveness of 20-minute free delivery, which incentivizes customers to order for delivery rather than pick-up.
Cost Control and Margin Management
The India business saw sequential improvement in pre-IndAS EBITDA margins, driven by improved operating leverage and productivity gains. The team maintained tight cost control across the supply chain. The reduction in input GST from 12% to 5% on ingredients like cheese and sauces contributed approximately 50 basis points to margins, with benefits selectively passed on to consumers to drive consumption, especially during the festive period.
Capital Expenditure and Investment Focus
Total investments in fixed assets for H1 FY26 amounted to ₹4.15 billion. The majority of this investment is shifting towards store and tech investments, with minimal commissary investments. A significant portion of capex also goes into expanding the delivery network by adding more bikes to support growth. The company is committed to opening approximately 900 stores over the next three years, with a focus on customer base, app penetration, and ROIC for new city entries.