Jubilant FoodWorks (NSE:JUBI) Ltd., the master franchisee of Domino’s Pizza in India, is setting its sights on an ambitious expansion plan, aiming to increase its outlet count to 3,000 in the next three years, despite broader concerns over slowing consumption, according to a report by Business Standard on March 28.
Expansion Plans and Growth Outlook
The company, which currently operates 2,000 outlets across India—including Domino’s, Dunkin’ Donuts, and the recently launched Popeyes—remains optimistic about consumer demand. Sameer Khetarpal, CEO and Managing Director of Jubilant FoodWorks, highlighted that government initiatives, such as recent tax breaks in the Union Budget, easing interest rates, and the anticipated 8th Pay Commission, are likely to boost consumption levels.
Despite inflationary pressures and macroeconomic challenges, Jubilant FoodWorks is banking on India’s long-term growth story, expanding aggressively to maintain its leadership position in the Quick Service Restaurant (QSR) sector.
Financial Performance: Profit Decline Despite Revenue Growth
In its latest earnings report for Q3 FY24, Jubilant FoodWorks reported:
- A 33% decline in standalone net profit to INR 41 crore, down from INR 61 crore in the same quarter last year.
- A 19% rise in revenue from operations, reaching INR 1,611 crore, compared to INR 1,355 crore in Q3 FY23.
- Profitability was impacted by rising costs, including higher wages and increased raw material expenses for vegetables and meat.
While the revenue growth remains strong, margin pressures suggest that investors should carefully evaluate the stock’s valuation before making investment decisions.
Valuation Insights: Is Jubilant FoodWorks Overvalued?
At the current market price (CMP) of INR 668, InvestingPro’s Fair Value tool estimates the intrinsic value of Jubilant FoodWorks at INR 571.4 per share, indicating a 14.4% downside potential.
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While Jubilant FoodWorks remains a dominant player in India’s QSR market, valuation concerns suggest that investors should wait for a better entry point.
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