JUBLFOODNSEQ3FY25February 19, 2025

Jubilant Foodworks Limited

7,708words

76turns

9analyst exchanges

1executives

Download PDF ↗JUBLFOOD stock page →

Management on call

Suman Hegde. We Will Commence With Key Thoughts From Our Co

Chairman and turn to our CEO and MD to

Key numbers — 40 extracted

Rs. 21.5 billion

The Q3FY25 was actually a really defining quarter for the company with consolidated revenue of Rs. 21.5 billion, aided by a very strong Domino's LFL growth of 12.5%. We have delivered an exceptional result in

12.5%

pany with consolidated revenue of Rs. 21.5 billion, aided by a very strong Domino's LFL growth of 12.5%. We have delivered an exceptional result in Quarter 3. This really demonstrates the strength of f

Rs. 24.1 billion

tem Sales, our measure of overall consumer sales across our owned and franchised network, reached Rs. 24.1 billion, a healthy 6% increase quarter-over-quarter. Consolidated revenue came in at Rs. 21.5 billion, up

erall consumer sales across our owned and franchised network, reached Rs. 24.1 billion, a healthy 6% increase quarter-over-quarter. Consolidated revenue came in at Rs. 21.5 billion, up 56.1% year-ov

56.1%

a healthy 6% increase quarter-over-quarter. Consolidated revenue came in at Rs. 21.5 billion, up 56.1% year-over-year. The organic growth came in at 19.4% while the rest was on account of DP Eurasia s

19.4%

dated revenue came in at Rs. 21.5 billion, up 56.1% year-over-year. The organic growth came in at 19.4% while the rest was on account of DP Eurasia sales not being in the base. Standalone revenue was R

Rs. 16.1 billion

% while the rest was on account of DP Eurasia sales not being in the base. Standalone revenue was Rs. 16.1 billion, up 18.9% year-over-year. Our total store network now comprises 3,260 stores, with a net addition

18.9%

on account of DP Eurasia sales not being in the base. Standalone revenue was Rs. 16.1 billion, up 18.9% year-over-year. Our total store network now comprises 3,260 stores, with a net addition of 130 st

18.3%

ieving its highest-ever sales. Led by our own-app and food-tech capabilities, Revenue surged by 18.3% year-over-year, fuelled by an impressive 33.8% increase in order growth. New Customer Acquisition

33.8%

-app and food-tech capabilities, Revenue surged by 18.3% year-over-year, fuelled by an impressive 33.8% increase in order growth. New Customer Acquisition grew by 55.4% and we have also started to see

55.4%

year, fuelled by an impressive 33.8% increase in order growth. New Customer Acquisition grew by 55.4% and we have also started to see the benefit of compounding through repeats. LFL sales grew by a s

24.7%

. LFL sales grew by a strong 12.5% year-over-year, driven by exceptional Delivery LFL growth of 24.7%. Mature Store ADS reached a high of Rs. 85,959. I am also delighted with the enhanced pace of tar

Advertisement

Guidance — 15 items

Lakshya Sharma

opening

“After the opening remarks from the Management, the forum will be open to question-and-answer session.”

Hari S. Bhartia

opening

“We are progressing well against our network guidance.”

Hari S. Bhartia

opening

“For the nine month of FY25, Consolidated Revenue came in at Rs.”

Jignanshu Gor

“And do you expect improvement in gross margin as we go forward, either in the form of price increases or in terms of premiumization of installed customers?”

Jignanshu Gor

“I think the second question was in a way similar to the previous one on Popeyes, right, that we had a medium-term target for 250.”

Jignanshu Gor

“Are you looking at Popeyes also as a largely delivery-led model or do you think dine-in is where that will be focused on?”

Sameer Khetrapal

“So, delivery will grow, right, that's a universal truth.”

Arnab Mitra

“Now that we have seen good evidence of your strategies working out in terms of consumer traction, would it be reasonable to expect these levels of LFLs to sustain going ahead?”

Arnab Mitra

“Or are there some base effects and other things which we should be cognizant of in terms of how we expect this to move ahead?”

Suman Hedge

“So, if you ask me, my view, if these kinds of growth continue, which is growth ahead of rental growth in the market, which at this point in time is lower than where our trajectory on growth is, we might see some of these headwinds going forward as well.”

Risks & concerns — 14 flagged

No, I think to me there is definitely no challenge on customer value proposition, product market fit.

— Sameer Khetrapal

Difficult to predict, of course, because it is a equation between two growth numbers.

— Suman Hedge

I just wanted to understand in the India business, what is the Y-o-Y decline in the average bill value?

— Percy Panthaki

It is fair to assume the entire decline is though delivery charges, partially offset by packaging charges.

— Sameer Khetrapal

So, the Average Order Value (AOV) decline is only because of the delivery charge waivers, there is no down trading.

— Percy Panthaki

Or it was only partial and only in 3Q we had the full impact of delivery charge waive off?

— Percy Panthaki

So, the sequential decline in gross margin of 100 basis points is mainly because of additional discounting and inflation, and has got nothing to do with any other thing?

— Percy Panthaki

But yes, there will be variations quarter-on-quarter, which we can explain to you offline on how it works, but no real reason not concern there.

— Suman Hedge

Where we are not 14 getting the leverage and there is a higher-than-expected headwind, it is the delivery cost.

— Sameer Khetrapal

Because delivery at the channel is growing, which puts more pressure on riders, and therefore to keep the same service level of nearly 20 minutes, we are actually paying more to the riders during the festive season.

— Sameer Khetrapal

So, that is the only headwind, which is there, which also will corrected, in my opinion, as we find newer ways of working.

— Sameer Khetrapal

On the other business, we see the overall drag to the P&L and 17 the unit economics improving.

— Sameer Khetrapal

Second question is, if I do some back of the envelope calculations, your dine-in order growth is about 30%, but dine-in revenues have declined by about 2%, which means that there is 25% decline in average order value for dine-in but there is no delivery fee waiver impact or anything of that sort.

— Jay Doshi

So, there is no massive, in fact, like you are saying, the decline in average ticket size inside the store is very marginal.

— Sameer Khetrapal

Advertisement

Q&A — 9 exchanges

Hi, Sameer. Hi team. Thanks for the opportunity. And congrats on a good set of numbers. Sameer, the first question is, our delivery is gaining traction and then doing phenomenally well. But despite multiple interventions that you would have done in last few quarters on dine-in, that is not responding as expected. So, any insights on that? Any challenges or competitive landscape which is different from delivery here?

Sameer Khetrapal

No, I think, Tejas, firstly, 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. So, as you would recall, we have launched a Rs. 99 four course meal available only inside the store during lunch hours. And there are many stores where I get customers line up to get it. And after 3:00 PM there is little bit of a push back from customers why it is not available post 3:00 PM. So, dine-in, if you look at our on-premise 6 sales there are two components; customers who come in to eat, get their pizza, sit

Hi, Sameer. Congratulations on a strong quarter. I think I had one question on the gross margins. So, what has contributed to that? And do you expect improvement in gross margin as we go forward, either in the form of price increases or in terms of premiumization of installed customers? So, how would you think about that?

Sameer Khetrapal

Yes. 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. There are named initiatives on correction of wastages, on correction of others like packaging material, etc. So, there are multiple initiatives on that one. We are also seeing where we can tighten the discounts, right. So, definitely it should improve, in my opinion. The reason is very simple on gross margin actually, it is, we did not want to lose share, but we have gained share, as you can see from the numbers. And it's

Yes. Hi, Sameer and team. And, again, congratulations on a great set of numbers. Now that we have seen good evidence of your strategies working out in terms of consumer traction, would it be reasonable to expect these levels of LFLs to sustain going ahead? Or are there some base effects and other things which we should be cognizant of in terms of how we expect this to move ahead? And also a linked question to this is, as you rightly said, you have invested a lot to get this growth. Would you want to like dial back that investment a little bit, focus on margins and therefore that could be a rea

Sameer Khetrapal

No, I think all sets of great questions, Arnab. That's a constant balancing act we have to do as operators of the business, right. And when we realize the like-for-like growth for the entire industry is tanking, we had to look at for some self-help measures and we went all guns blazing, right. And now we are seeing that growth. We are now balancing in terms of margins should also flow in, we should get the leverage. And trust me, the teams are focused on it. In terms of momentum, right, we put a lot of fuel into the engine. So, it is growing. We do see growth momentum continue from Q2 to Q3 an

Hi, sir. I just wanted to understand in the India business, what is the Y-o-Y decline in the average bill value? And how much of this is due to the delivery charge waiver and how much of it is due to down trading or any other impact?

Sameer Khetrapal

Yes. So, I think we do not disclose the average ticket size. It is fair to assume the entire decline is though delivery charges, partially offset by packaging charges. So, the Domino's India revenue grew by 18% and the order grew by 34%, right, that should give you some indication. It is largely delivery, right, but it is also leading to 55% plus new customer growth, right. I think you have to look at these three in tandem, and this one customer acquired eats pizza three times in a year. So, that compounding we are seeing in our numbers because now this is the fourth quarter of free delivery.

Hi, good evening. Sir, just one question from me. In your presentation, in the sort of mature store numbers, that's actually dropped for the last two quarters. This is a function of just higher stores splits?

Lakshya Sharma

Yes, Aditya, it always happens. In quarter one we have the highest number of store count. It progressively comes down by quarter four. In quarter one again of FY ‘26 you will see a higher store count.

Hi, thanks for the opportunity. And congrats on a very good investment pick up. Sir, your aggression in market share gain is obviously not a good news for smaller competition that sort of popped up over last few years. I just want to check your views on the continuation of this ADS strategy of yours, and are we also sort of seeing initial signs of consolidation in the marketplace? 13

Sameer Khetrapal

No, I think, I would say, what we control is our investments, our actions, and every company wants to grow market share, right. So, I think with that I do not want to step away from driving growth, because growth is the best help that you can give to the business and also in terms of margins and cash flows, ultimately. So, in terms of competition, see this is how I see it when I just remove myself from my current position. The growth is definitely muted, right, for the industry and listed players and the large players, to me, are actually doing better than some of the unlisted and smaller medi

Thanks, Sameer. So, my first question was around new city additions, you have added almost 60 cities over the last four quarters. And you have added this year in nine months almost 145 new Domino’s stores. I am just trying to understand how many more cities potential you see to expand into? And how does that feed into your store addition ambition on an annualized basis over the next three, four years, considering you are moving more towards street focused kind of unit?

Sameer Khetrapal

Yes. Firstly, we are seeing opportunity on both, right. And I quote this example a lot, when I joined couple of years ago we had about 30-odd stores in Gurgaon. We are now reaching nearly 50 and we 15 believe we can add another 20 more. So, densification, as cities expand, as new shopping areas, new congregation points like movie halls and other things come up, there is always more opportunity, including metro stations and highways, etc. So, firstly, we are seeing tremendous opportunity in the city where we are fully covering, like Gurgaon. Secondly, there are cities like Ahmadabad where we do

Hi, thanks for the opportunity. And congratulations on your great acceleration in results. I have got two questions. The first is, in this quarter we saw about 18% top line growth and 15% pre-IndAS EBITDA. Now how should we think about gap between revenue growth and EBITDA growth on a pre-IndAS basis going forward over the next two, three quarters if you continue to stay at a similar 15% plus system sales growth levels?

Sameer Khetrapal

Internally, we look at like this in the following manner. We tease out Domino’s portfolio and see is that growing, and likely mentioned in our comments, is it in mid-teens and improving? So, that's how we see that particular business. On the other business, we see the overall drag to the P&L and 17 the unit economics improving. So, these are the trade-off factors. Allow us maybe one more quarter, because let this stabilize because we will launch the delivery in March, maybe by next quarter we will have a much more scientific answer on that, Jay, otherwise I will be more hazarding a guess, and

Thankyou. Note: This transcript has been edited for readability and does not purport to be a verbatim record of the proceedings. 18

Management

Speaking time

Sameer Khetrapal

Moderator

Percy Panthaki

Devanshu Bansal

Latika Chopra

Tejas Shah

Jignanshu Gor

Lakshya Sharma

Arnab Mitra

Suman Hedge

Advertisement

Opening remarks

Lakshya Sharma

Thank you, Darwin. Good evening, everyone. And welcome to Jubilant FoodWorks Limited's Q3 and 9M FY '25 Earnings Call for Investors and Analysts. We are joined today by senior members of the Management Team including our Chairman – Mr. Shyam S. Bhartia, our Co-Chairman – Mr. Hari S. Bhartia, our CEO and MD – Mr. Sameer Khetarpal, our CEO of Turkey Business – Mr. Aslan Saranga, our CFO – Ms. Suman Hegde. We will commence with key thoughts from our Co-Chairman and turn to our CEO and MD to share his perspectives. After the opening remarks from the Management, the forum will be open to question-and-answer session. A cautionary note, some of the statements made on today's call could be forward-looking in nature and the actual results could vary from the statement. We will also share the replay and transcript of the call on the Company's website under the Investor Relations section. I would now like to invite Mr. Hari S. Bhartia to share his views with you. Over to you, sir. Thank you.

Hari S. Bhartia

Thankyou Lakshya. Good evening, everyone. The Q3FY25 was actually a really defining quarter for the company with consolidated revenue of Rs. 21.5 billion, aided by a very strong Domino's LFL growth of 12.5%. We have delivered an exceptional result in Quarter 3. This really demonstrates the strength of focused execution of our strategy and the unwavering commitment of our team members. Our strategic framework built on two pillars is yielding results ahead of the market: #1. Strengthening Domino's Multiple initiatives have been taken to strengthen Domino's business. We transitioned from four to seven region structure in quarter two last year, this made our operations more agile, and 2 enhanced team performance and effectiveness. We revitalized our brand with “It happens only with pizza” campaign to win on occasions and expand the pizza category. We redefined the delivery experience with the launch of 20-minute delivery and delivery fee waiver, fundamentally enhancing the value propositio

Advertisement

← All transcripts JUBLFOOD stock page →

Jubilant Foodworks Limited

Market Movers