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    Jubilant Food.

    JUBLFOOD
    Consumer Services·12 Feb 2025
    Management Summary

    Jubilant FoodWorks delivered a strong Q3 FY25, primarily driven by exceptional performance in Domino's India with robust LFL and order growth. Strategic investments in customer acquisition, product innovation, and free delivery led to significant revenue growth, though impacting gross margins. Emerging brands like COFFY showed strong store expansion, while international markets like Sri Lanka also contributed positively. The company remains focused on balancing growth investments with margin improvement.

    Highlights

    7

    • Consolidated revenue of ₹21.5 billion, up 56.1% YoY.

    • Domino's India LFL growth of 12.5% YoY.

    • Domino's India order growth of 33.8% YoY.

    • New Customer Acquisition grew by 55.4%.

    • COFFY surpassed 150 store mark in Turkey.

    • DPEU Revenue crossed ₹5 billion, up 9.5% QoQ.

    • Sri Lanka revenue up 65.4% YoY to ₹213 million.

    Concerns

    5

    • Gross Margin at 75.1%, lower by 160 bps YoY due to higher food costs, inflation, discounting, and delivery charge waiver.

    • Standalone EBITDA margin of 19.4%, lower by 145 bps YoY.

    • Domino's Turkey LFL growth at -3.2% on a base of 18.9% LFL in Q3FY24.

    • COFFY Turkey LFL growth at -2.6% on a base of 27.7% LFL in Q3FY24.

    • Muted overall demand scenario.

    What Changed1

    vs Q4 FY25

    Risks discussed3 → 4 (+1)

    Key financials

    Single quarter

    06 metrics
    1. 01Consolidated Revenue$21.5B+56.1%YoY
    2. 02Standalone Revenue$16.1B+18.9%YoY
    3. 03Standalone EBITDA$3.1B+10.6%YoY
    4. 04Standalone EBITDA Margin19.4%-1.5%YoY
    5. 05Domino's India LFL Growth12.5%

    Segment breakdown

    DPEU Markets (Turkey, Azerbaijan, Georgia)
    7.5 billion System Sales5 billion Revenue23% EBITDA Margin (9M FY25)7.2% PAT Margin (9M FY25)-3.2% Domino's Turkey LFL Growth-2.6% COFFY Turkey LFL Growth
    Sri Lanka
    213 Mn Revenue
    Bangladesh
    173 Mn Revenue
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Profitability
    Gross Margin Improvement
    100 basis points
    		High
    Profitability
    Domino's India Pre-Ind-AS-116 EBITDA Growth
    mid-teen growth
    		High
    Revenue
    Popeyes Revenue
    ₹1,000 crores
    		Medium
    Capacity
    Popeyes Store Count
    100 stores
    		Medium
    Capacity
    Domino's Store Count
    1,000 stores
    		High

    Gross Margin Improvement

    next two to three quarters
    Current75.1% (Q3 FY25)
    TargetProgress towards 100 basis points improvement

    Why it matters

    Key to overall profitability and demonstrating leverage from growth investments.

    I think internally we are targeting the 100-basis point improvement of gross margin, right, in the next two to three quarters, right, that's what we are planning to do.

    How to verify

    key_financials.metrics[label='Gross Margin']

    Risks & concerns

    4
    RiskSeverity

    Gross Margin Compression

    Gross Margin down 160 bps YoY to 75.1% due to higher food costs, inflation, sharper discounting, and delivery charge waiver, viewed as an investment for growth. — Management acknowledged

    medium

    Competitive Intensity

    The competitive intensity continues to be strong along with inflationary pressures in the market. — Management acknowledged

    medium

    Hyperinflation Accounting in Turkey

    Turkey's hyperinflation accounting leads to quarter-on-quarter aberrations in reported financials, making 9-month numbers more representative of underlying performance. — Management acknowledged

    low

    Muted Overall Demand Scenario

    The overall demand scenario is muted, but the company's strategies are enabling it to outperform the market. — Management acknowledged

    medium

    Q&A highlights

    8

    “I will not say it is not responding, it is actually responding. Our in-store lunch average weekly orders are highest in the last two and a half years.”

    Addresses concerns about the effectiveness of dine-in initiatives, with management providing a positive update on recent performance.

    asked by Tejas Shah

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q3 Performance Driven by Domino's India

    Jubilant FoodWorks reported a strong Q3 FY25 with consolidated revenue reaching ₹21.5 billion, a 56.1% year-over-year increase, including organic growth of 19.4%. This was significantly boosted by Domino's India, which achieved its highest-ever sales, driven by a 12.5% LFL growth and an impressive 33.8% increase in order growth. New customer acquisition for Domino's India surged by 55.4%, indicating successful market penetration strategies.

    02

    Strategic Investments Impacting Margins

    The company's gross margin stood at 75.1%, a 160 basis points year-over-year decrease. This compression is attributed to higher food costs, inflationary pressures, sharper discounting during peak periods, and the waiver of delivery charges. Management emphasized these are strategic investments aimed at gaining market share and acquiring new customers, with a target to improve gross margin by 100 basis points over the next two to three quarters.

    03

    Popeyes and Emerging Brands Expansion

    Popeyes continued its network expansion, with a focus on achieving desired unit economics and payback periods. Management expressed confidence in Popeyes' growth potential, aiming for ₹1,000 crores in revenue and planning to open 100 stores in optimal locations. COFFY, another emerging brand, achieved a significant milestone by surpassing 150 stores in Turkey, positioning itself among the top five cafe brands in the region.

    04

    International Market Performance

    The DPEU markets (Turkey, Azerbaijan, and Georgia) recorded system sales of ₹7.5 billion, with DPEU revenue crossing ₹5 billion for the first time, marking a 9.5% quarter-on-quarter growth. Despite Turkey's LFL growth being negative at -3.2% (on a high base), the 9-month DPEU revenue reached ₹14.3 billion with an EBITDA margin of 23.0% and PAT margin of 7.2%. Sri Lanka showed significant turnaround with revenue up 65.4% YoY to ₹213 million, driven by same-store sales growth.

    05

    Digital and Delivery Leadership

    Jubilant FoodWorks continues to leverage its digital capabilities, with nearly 14 million monthly active users (MAU) on the Domino's India app and app installs growing 28.6% YoY to 12 million. The company's rider management platform supported 46,700 monthly active riders in December, enabling 20-minute delivery. This digital and delivery focus is considered a strategic moat, contributing to market outperformance and managing variable peak loads.

    06

    Dine-in Performance

    Despite the strong focus on delivery, management noted that dine-in performance is also responding positively, with in-store lunch average weekly orders reaching their highest in two and a half years. Initiatives like the ₹99 four-course meal available only inside stores during lunch hours have been successful, leading to customer queues in many locations. The company expects further improvement in dine-in over the next quarter or two.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.