Jubilant Foodworks Ltd Quarterly Results Q2FY27 stock analysis

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Sector Outlook: Positive

Sustaining Growth Momentum Amid Margin Headwinds

For Q2FY27, Jubilant FoodWorks Limited reported a steady consolidated financial performance, with revenue from operations growing 11.8% YoY to Rs. 2,608 crores, driven by consistent momentum across India and international operations. Reported EBITDA stood at Rs. 513 crores (up 7.3% YoY), with EBITDA margin contracting by 83 bps YoY to 19.7% due to hyperinflation accounting-related monetary adjustments in DP Eurasia. PAT from continued operations before exceptional items stood at Rs. 114 crores (up 0.5% YoY), with PAT margin contracting by 49 bps YoY to 4.4%. Group System Sales came in at Rs. 3,109 crores, and the global store network expanded to 3,820 stores with a net addition of 108 stores during the quarter. In India, standalone revenue grew 11.5% YoY to Rs. 1,885 crores, supported by a 110 bps YoY gross margin expansion to 75.5% driven by sourcing efficiencies. Standalone EBITDA rose 12.4% YoY to Rs. 372 crores, with EBITDA margin expanding by 16 bps YoY to 19.8%, while standalone PAT from continued operations stood at Rs. 73 crores (up 7.6% YoY) with a PAT margin of 3.8% (down 14 bps YoY). Domino’s India revenue increased 9.2% YoY to Rs. 1,792 crores, supported by 6.3% order growth and 4.1% LFL growth, with delivery channel revenue expanding 11.3% YoY (delivery mix at 75.8%). The India store network expanded by 99 net stores to 2,728 stores (including 2,601 Domino’s stores across 587 cities, entering 47 new cities). In the international business, DP Eurasia reported a 12.6% YoY rise in revenue to Rs. 668 crores, while EBITDA stood at Rs. 140 crores (down 2.4% YoY) and PAT from continuing operations reached Rs. 62 crores (up 0.3% YoY) with healthy underlying margins (EBITDA greater than 20%, PAT 9.2%) despite hyperinflationary accounting (Ind AS 29) adjustments. Sri Lanka and Bangladesh continued their strong trajectory, growing 9.1% YoY to Rs. 34.6 crores and 12.5% YoY to Rs. 21.8 crores, respectively. Popeyes India emerged as a robust second growth engine, delivering a 121.9% YoY jump in revenue to Rs. 75.9 crores with like-for-like (LFL) growth of 53.0% (surpassing 40% for the fourth consecutive quarter) and expanding its footprint to 99 stores across 25 cities. Overall, the quarter demonstrated disciplined execution, resilient operating margins amidst cost headwinds, and steady store expansion across key growth verticals.

Valuation and Outlook

Jubilant FoodWorks Limited remains well-positioned to deliver sustained earnings growth over the medium term, backed by its undisputed category leadership in pizza, strengthening multi-brand portfolio, and disciplined execution across domestic and international markets. Management observed sequential improvement in Domino’s India LFL growth to 4.1% in Q2FY27 (up from 2.5% in Q1FY27 and 0.2% in Q4FY26), reiterating confidence in achieving 5-7% medium-term LFL growth as high base effects normalize and dedicated turnaround initiatives revive the Dine-In and Takeaway (DITA) channel. Growth visibility is further strengthened by the company’s clear roadmap to open 1,000 stores across India during FY26-FY28, alongside the rapid scaling of Popeyes into a Rs. 1,000 crores brand within the next 3 to 4 years. Despite ongoing input cost inflation across key items such as LPG, cheese, oil, and wages (approx. 200 bps headwind), the company’s operating resilience is well supported by selective pricing actions, productivity gains, reduced wastage, AI-led cost leverage, and optimized supply chains. This underpins management’s target of a 200 bps EBITDA margin expansion over time, steered by 100 bps from emerging brands and the remaining 100 bps from the core Domino’s business. With large supply chain capacity investments (designed to support 4,500-5,000 stores) now largely completed, FY27 Capex guidance of Rs. 750-900 crores remains unchanged, pivoting primarily toward store expansion, store upgrades, and customer-facing digital/AI technologies. Coupled with robust underlying operating performance in DP Eurasia and expanding consolidated Free Cash Flow (FCF grew 22.2% YoY in H1FY27 to Rs. 155 crores), Jubilant FoodWorks presents a compelling long-term compounding narrative driven by multi-engine category expansion, operational leverage, and expanding return ratios.

Key concall Highlights

Margin Outlook & Cost Optimization

Management remains confident of achieving its 200 bps medium-term margin expansion target.
Emerging brands are ahead of plan in delivering approximately 100 bps of margin improvement.
Domino’s faced around 200 bps of unexpected cost inflation from LPG and wage increases, of which approximately 140 bps has been mitigated.
Further cost efficiencies, pricing actions, discount optimization and product mix improvements remain key margin levers.

Pricing Strategy & Input Cost Inflation

The company has implemented calibrated price hikes of approximately 140–200 bps, using machine-learning models across channels and day parts.
Management is focusing on pricing, discount management and product mix to protect gross margins.
Cheese supplies are largely secured for FY27; however, inflationary pressures persist across dairy, chicken and vegetables.
Further price hikes will be considered if required to mitigate input cost inflation.

SSG Growth & Demand Outlook

Management is targeting 5–7% full-year SSG growth in FY27.
SSG has improved sequentially from Q4FY26 to Q1FY27 and Q2FY27, with Q3 tracking in line with internal plans.
Festive and Christmas periods will be critical for achieving the targeted growth.
Management indicated that demand remains stable, with limited impact from rural consumption pressures.

DITA Channel & Store Refurbishment

DITA revenue returned to positive growth during Q2FY27, with average daily sales stabilising.
Around 400 stores are targeted for refurbishment over the next three quarters.
Initiatives include improvements in furniture, store ambience, equipment and customer value propositions.
Management aims to make dine-in and takeaway incremental growth drivers rather than a drag on LFL growth.

Popeyes – Expansion & Profitability

Popeyes has established itself as the second growth engine for Jubilant FoodWorks, supported by product differentiation and customer acceptance.
Management sees an additional 100–200 bps gross margin improvement opportunity.
ADS is targeted at approximately Rs. 1 lakh per store to improve restaurant-level profitability.
Key levers include procurement efficiencies, manpower optimisation, technology adoption and marketing leverage.
The company currently operates around 100 stores and targets 40–45 annual additions, with a long-term ambition of 250 stores and Rs. 1,000 crores revenue run rate.

Product Innovation

Domino’s has accelerated innovation across cheese, chicken, beverages and desserts.
Key launches include 2-in-1 Pizza, Chicken Maxxx, Cold Coffee, Mousse Cakes and Double Cheese Burst.
New products are contributing close to double digits of overall top-line growth and supporting favourable product mix and gross margins.

Turkey Operations

Domino’s Turkey continues to report positive store-level transaction growth, with inflationary costs being passed on through pricing.
Reported negative LFL is largely attributable to accounting adjustments linked to headline inflation.
Coffy is focusing on restoring its value proposition through affordable pricing, university-led expansion, loyalty programmes and cold beverages.
Management indicated sequential improvement in Coffy’s performance.

Customer Acquisition & Digital Growth

India remains underpenetrated in online food delivery and QSR, providing significant customer acquisition opportunities.
MAU growth is higher than MTU growth due to the addition of new customers who are yet to develop regular ordering habits.
Management highlighted improving customer acquisition, market-share gains and stable long-term customer value.

Dine-in, Takeaway & Cafe Domino’s

The company is focusing on store refurbishment, improved value offerings and technology-led local marketing to revive dine-in and takeaway.
Management believes an additional 1–2% contribution from these channels to LFL growth could materially improve overall growth and margins.
Cafe Domino’s currently operates around 15–20 stores, with encouraging initial traction, largely driven by dine-in customers. Unit economics are still being evaluated.