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Jubilant FoodWorks Poised for Massive Expansion; ProTips Gives Valuable Info

Published 05/22/2024, 11:54 PM
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Jubilant FoodWorks Ltd (JFL), the master franchisee of Domino’s Pizza in India and several other markets, with a market capitalization of INR 31,517 crore, announced plans on Wednesday to significantly expand its store network. The company aims to increase its Domino’s Pizza outlets from 2,793 to over 5,500 across six global markets in the medium term.

JFL operates in India, Turkey, Bangladesh, Sri Lanka, Azerbaijan, and Georgia. Last year, its subsidiary, Jubilant Foodworks (NS:JUBI) Netherlands BV (JFN), acquired DP Eurasia, the master franchisee of Domino’s in Turkey and Georgia, thus expanding JFL’s footprint beyond Asia.

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As of March 31, 2024, the JFL Group's store network spans six markets and includes 2,990 outlets across five brands. JFL holds franchise rights for three global brands—Domino’s Pizza, Popeyes, and Dunkin’—and operates two of its own brands, Hong’s Kitchen in India and COFFY in Turkey.

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However, digging deep into the fundamentals through ProTips, some interesting pieces of information have surfaced. The company operates with interesting gross margins which is always a good sign for an efficiently managed business. In fact, in March 2024, the company posted a net profit margin of 12.67%, the highest since September 2022.

The stock also has a lower volatility than the broader markets which makes it an easy-to-hold stock, especially for those who are more on the conservative side. For dividend lovers, they would be happy to know that the company has been paying dividends for the last 9 consecutive years.

All such information is known without investors having to dig deep into the financial statements. This is why before making any investment decision, having a quick glance at ProTips is a must. It reads the fundamentals and deciphers the data into easy-to-read bite-sized information.

In India, JFL has set an ambitious target to open 4,000 Domino’s stores in the mid-term, up from its previous goal of 3,000. Domino’s India is close to a milestone of 2,000 outlets, currently operating 1,995 stores across 421 cities, with 179 new stores added in the past year alone.

“FY24 is a pivotal year for JFL, transforming us from India’s largest food service company into one of the largest in emerging markets,” said Hari S. Bhartia, co-chairman of JFL, during the company’s earnings call on Wednesday.

For the March 2024 quarter, JFL reported a 23.9% year-on-year increase in revenue to INR 1,572.8 crore and a staggering 632% rise in profit to INR 208.9 crore. This profit boost was largely due to a net gain of INR 170.2 crore from the remeasurement of previously held equity interest following the DP Eurasia acquisition.

CEO and MD Sameer Khetarpal highlighted that Domino’s India saw a positive turnaround in like-for-like sales in Q4, driven by strategic initiatives such as strengthening regional infrastructure, improving execution, revamping the brand, and offering targeted delivery fee waivers to stimulate demand during a sluggish period.

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Also Read: Here’s How to Unlock the Secrets of the Investment Titans

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