Jubilant FoodWorks Limited (JFL) is an Indian food-service company based in Noida, Uttar Pradesh which holds the master franchise for Domino’s Pizza in India, Nepal, Sri Lanka and Bangladesh, for Popeyes in India, Bangladesh, Nepal and Bhutan, and also for Dunkin’ Donuts in India. Jubilant FoodWorks is a part of the Jubilant Bhartia Group which is owned by Shyam Sunder Bhartia (husband of Shobhana Bhartia) and Hari Bhartia. JFL is amongst one of the India’s largest food-service company.
JFL owns a large network of stores around India and other nearby countries. As on FY22, In India, it owns 1560+ stores of Domino’s, 28 stores of Dunkin Donuts, 9 stores of Ekdum! Biryani, 4 stores of Popeyes & 15 stores of its own brand Hong’s Kitchen. The company also owns 35 Domino’s stores in Sri Lanka & 9 Domino’s stores in Bangladesh. It owns a total of 8 supply chain centres & 4 distribution centres across India to fulfil the raw material demand of all its stores.
JFL made a record in fiscal 2022 with new store openings with a landmark 230 new Domino’s Pizza stores being opened.
Quarterly Growth Walkthrough
JFL has posted a strong growth in the September 2022 quarter as the release of COVID-19 restrictions have led to a vigorous pick-up in the dine-in and the takeaway revenues. However, margins were affected by rising commodity prices.
Net Sales were reported at Rs 1,301 crore in September 2022 which is up by 16% from Rs 1,116 crore in September 2021.
Quarterly Net Profit was reported at Rs 132 crore in September 2022 which is up by 9% from Rs 120 crore in September 2021.
EBITDA was reported at Rs 322 crore in September 2022 which is up by 8% from Rs 297 crore in September 2021.
| Particulars | Sep 2022 | Jun 2021 | Sep 2021 | YoY | QoQ |
| Revenues | 1301 | 1255 | 1116 | 16% | 4% |
| EBITDA | 312 | 304 | 288 | 8.4% | 2.5% |
| Net Profit | 131 | 113 | 120 | 9.4% | 17% |
| EPS | 2.0 | 1.7 | 1.8 | 9.4% | 17% |
Robust store additions have contributed to the growth momentum. The dine-in and the takeaway businesses have grown sturdily and increased their share in the overall revenues, while the company has conserved a blooming growth in the delivery business.
Domino’s store expansion
JFL will add new stores for the main Domino’s brand in India. JFL is going to launch around 250 new stores in the current fiscal (with the present count of 1,567 as of March 2022). JFL has opened 76 new stores in Q2FY23 and 134 stores in H1FY23. JFL has entered 34 new cities in H1FY23, reaching an overall city count of 371. The company has tremendous opportunities for expansion in existing cities as well as probing into new cities. The company expects healthy store additions for Domino’s over the medium term. The company has declared that amongst the overall store openings, 2/3 would be in new regions while 1/3 will be split stores (stores nearby existing stores).
Menu innovations
JFL is launching new products/menu offerings to sustain the sales momentum. The company has introduced Paratha Pizza at the start of the fiscal, which has received reassuring customer response. Lately, the company has introduced Bangla cuisine flavoured Pizza for the eastern market as well as No-Onion-Garlic Pizza for the western market (Gujarat & Rajasthan). The company would carry on with the introduction of new products with regional tastes and preferences for the expansion of the pizza consumption in the country.
New CEO aims to toughen the growth track
Sameer Khetarpal is the new CEO of JFL who joined the company in September 2022. He aims to pursue the existing growth road map drawn out by the company. He has a track record of up scaling several reputed businesses, such as Amazon Fresh, Amazon Food, and Amazon Pharmacy, and has worked in reputed organisations such as McKinsey & Co, GE Capital, and Hindustan Unilever. He aims to strengthen the JFL operations and its overall positioning in the industry.
The new CEO will focus on growth and margin improvement, while strengthening the core Domino’s brand and scaling up the new businesses of Popeyes (chicken offerings), Hong’s Kitchen (Chinese cuisine), and the Dunkin brand. The new CEO will also deepen the digital focus and technology implementation in several processes such as ordering, inventory management, store operations as well as improve the overall customer experience.
Faster pizza delivery
JFL on 20th December 2022 has announced the launch of 20-minute delivery service across 14 cities in the country. It is expected that the metropolitan cities of Mumbai, Delhi, Kolkata, Bengaluru and Chennai where a huge number of Domino’s outlets are located, have a high probability to be included in the fast delivery zones.
Jubilant Foodworks said that “The new delivery program will be rolled out without compromising the food quality and the safety and well–being of its delivery riders”.
India is Domino’s largest market outside of the United States. The 20-minute delivery service, according to Domino’s chief executive officer Russell Weiner, highlights the company’s “customer-centric approach in India. Elevated consumer experience through reduced delivery time is proven to deliver better customer satisfaction and lead to increase frequency across the market. This strategic move will give Domino’s India an edge over the competition in the QSR domain and help the brand continue to be the market leader”.
Technical Analysis
JFL stock price has corrected down to Rs 498 per share from its lifetime high of Rs 918. The price has taken support on the 61.8% retracement level thrice and currently continues to resist falling further. Historically the price of this stock rarely goes below the 200-day moving average. The MFI is at 22 points on the weekly chart. Considering all the data, the stock is extremely oversold and a great buy for long trades. The company has good overall valuations and can be a valid candidate for the portfolio.
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