Earnings Outlook
Sales store growth to boost Jubilant Foodworks' PAT
This story was originally published at 22:43 IST on 13 May 2025
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By Taniva Singha Roy
MUMBAI — A surge in same-store sales will likely boost the bottom line of Jubilant Foodworks Ltd., which operates the pizza chain Domino's Pizza in India, in the March quarter on a yearly and sequential basis. The company is also likely to outperform its industry peers this quarter, according to brokerage houses tracking the company.
The food giant is seen reporting a net profit of INR 443.0 million for the March quarter, up nearly 73% on year and over 7% on quarter, according to the average of estimates from 10 broking firms. The company's March quarter revenue is estimated at INR 16.45 billion, up 24% from the year-ago quarter and up 2% on quarter.
"We expect Jubilant Foodworks to report standalone revenue growth of 16.2% on yearly basis, as we expect the growth momentum witnessed over the past few quarters to sustain," Kotak Institutional Equities said. Overall, Kotak Equities expects the company's India revenue growth to be around 16% on year. The company's March quarter growth print is impressive in the context of a subdued demand environment and strong like-for-like print relative to other quick service restaurant, Kotak Equities said.
Analysts' estimates for the company's March quarter net profit are in the range of INR 277 million to INR 679 million. The company's net profit for the December quarter had risen almost 33% on quarter to INR 410.46 million. The revenue for that quarter had risen 18% on year. This was backed by a 34% order growth which the company, in its investor presentation, said was powered by product innovation and improvement in operational parameters.
The company is scheduled to announce its quarterly earnings Wednesday. Shares of the company have risen over 9.5% since it declared its earnings for Oct-Dec at the beginning of February. On Tuesday, shares of the company closed at INR 701.70 on the National Stock Exchange, up 0.8% from the previous day.
"Jubilant Foodworks, on a relative basis, has reported a better performance (9-10%) SSSG (same store sales growth), compared to other players that are expected to see low- to mid-single-digit SSSG growth due to a high delivery salience (70% of total sales), company specific initiatives to improve the dine-in experience, and new product launches," HDFC Securities Ltd. said.
The company's operating margin is expected to rise to 12.5% in Jan-Mar from 10.9% in the Oct-Dec quarter, HDFC Securities said. "Operating margins will slightly improve for the quick service restaurant sector and Jubilant is expected to see a 160 bps margin expansion on a 10.9% operating margin during Jan-Mar quarter," the brokerage firm said.
Despite current struggles, dine-in companies are poised for significant improvement in operating growth metrics once the industry recovers, Motilal Oswal Financial Services said in a report.
Equirus Securities expects the company's EBITDA margin to edger lower by 30 bps to 19.1 % in Jan-Mar, while broking firm Prabhudas Lilladher sees EBITDA margin down 60 bps at 18.8%. In the December quarter, the operating earnings before interest, tax, depreciation, and amortisation of the company had risen 11% on year to INR 3.13 billion. But the EBITDA margin contracted by 145 basis points on year to 19.4%.
Jubilant Foodworks is anticipated to report sales growth led by free 20-minute delivery, menu intervention, cheesy reward scheme, initiatives to improve the dine-in experience, and new product launches.
The company's focus has been on value-driven innovations, emphasising new product developments, and it has not implemented price hikes in the past 10 quarters, analysts said. The company continues to focus on store additions and added net 40 Domino's stores in Jan-Mar quarter.
Investors will focus on the company's sustainability of current same store sales growth, management commentary on demand, outlook for margin, and steps to counter competitive pressures when the company announces its earnings. Additionally, the management's commentary on scaling new businesses and sales growth from newly added stores, including the 40 net new stores added in the Jan-Mar quarter, will be closely watched.
Following are the Jan-Mar standalone earnings estimates for Jubilant Foodworks based on reports from 10 brokerage firms in descending order of estimate of net profit:
Brokerage firm | Net sales | Net profit | EBITDA |
(In INR million) | |||
Morgan Stanley | 20,095.00 | 679.00 | 3,800.00 |
Equirus Securities Pvt Ltd | 15,877.00 | 512.00 | 3,028.00 |
Nirmal Bang Equities Pvt Ltd. | 15,872.00 | 498.00 | 3,016.00 |
Sharekhan Ltd. | 21,080.00 | 490.00 | ----- |
Prabhudas Lilladher Pvt Ltd. | 15,871.00 | 458.00 | 2,983.00 |
Elara Securities (India) Pvt Ltd. | 15,094.00 | 429.00 | 2,928.00 |
HDFC Securities Ltd. | 13,313.00 | 376.00 | 1,451.00 |
Kotak Institutional Equities | 15,469.00 | 362.00 | 1,763.00 |
Motilal Oswal Financial Services Ltd. | 15,866.00 | 351.00 | 2,854.00 |
Nuvama Wealth Management Ltd. | 15,926.00 | 277.00 | 2,771.00 |
Average | 16,446.30 | 443.20 | 2,732.67 |
End
Edited by Ashish Shirke
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