Food delivery major Jubilant Foodworks is in focus today. The global brokerage house Jefferies retained its ‘Buy’ rating on the stock, even as the company reported muted Same-Store Sales Growth (SSSG) in the March quarter. The brokerage has sharply cut its target price to Rs 600 from Rs 850 earlier. However, it still sees around 27% upside from current levels.
The brokerage stated, “Flat SSS & cautious ST margin commentary suggest wait for a turnaround continues.”
Jefferies believes the company’s calibrated pricing strategy and improving delivery business could support long-term growth. The report added, “Retain ‘’Buy’, but upside is subject to pick up in earnings growth.”
The QSR performance dashboard
According to the brokerage report, the company delivered a modest operational beat in the fourth quarter despite pressure from inflation and weak dine-in demand.
Adjusted standalone Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) rose 5% year-on-year to around Rs 200 crore, while revenue increased 6% year-on-year.
| Key Metrics | Q4FY26 Performance |
| Brokerage Rating | Buy |
| Target Price | Rs 600 |
| Implied Upside | Around 27% |
| Revenue Growth | 6% YoY |
| EBITDA Growth | 5% YoY |
| Domino’s Order Growth | 10% YoY |
| Delivery Contribution | 76% of sales |
| Domino’s Store Count | 2,455 |
| FY27 Store Addition Guidance | 230–250 stores |
The report highlighted that gross margins improved by nearly 100 basis points due to operational efficiencies and product mix improvements. However, rising wage costs and energy inflation continued to pressure operating margins during the quarter.
Operational matrix: Winning volume at the cost of ticket sizes
One of the biggest talking points in the quarter was Domino’s aggressive pricing and customer acquisition strategy.
As per Jefferies report, the company reduced the free-delivery threshold to Rs 99 from Rs 149 to compete more aggressively with rivals and attract new customers.
The report stated, “The co. also reduced free-delivery threshold to Rs 99 (vs Rs149 earlier) to match competition.” Alongside this, the company increased cashback offers and removed packaging charges in select markets.
While these measures helped increase order volumes, they also impacted Average Order Value (AOV). As per the brokerage report, Domino’s India revenue grew around 5% year-on-year, while total order volumes jumped nearly 10%.
However, same-store sales growth remained almost fla, the weakest trend seen over the last two years. Management attributed part of this weakness to a higher base and supply disruptions caused by Liquefied Petroleum Gas (LPG) shortages during March.
Jefferies noted, “SSS growth moderated and was just near-flat, lowest in the last two years.” The brokerage further highlighted that Domino’s continued to gain market share within the pizza segment and among the top Quick Service Restaurant (QSR) chains in India.
Delivery business becomes the main growth engine
The company’s delivery segment continued to outperform other channels. Jefferies noted that the delivery sales grew 10% year-on-year and now contribute nearly 76% of overall revenue.
The report said, “Strong delivery: 10% YoY with salience rising to 76%.”
Management also maintained a cautious approach toward price hikes despite inflationary pressures across energy and labour costs. According to Jefferies, energy inflation alone impacted margins by over 100 basis points, while wage inflation added another 50 basis points of pressure.
Still, management believes that aggressive price hikes may hurt demand recovery and customer acquisition.
Emerging growth engines & international silver linings
While Domino’s India remains the core business, emerging brands and international operations also contributed positively during the quarter.
According to the brokerage report, Popeyes continued to deliver strong momentum with improving store economics and healthy Same-Store Growth (SSG). The brand added five new stores during the quarter, taking the total count to 78 outlets.
International operations also remained strong. Domino’s Turkey reported improving Like-for-Like (LFL) sales growth, while Bangladesh and Sri Lanka delivered robust revenue growth.
The brokerage noted, “Domino’s Bangladesh sales grew +29% while Sri Lanka was +61% YoY.” However, the COFFY business in Turkey continued to face pressure during the quarter.
What investors need to watch
Jefferies expects earnings recovery to remain gradual rather than immediate. The brokerage has cut its EBITDA estimates by nearly 10-12% for FY27-28 because of cautious margin expectations and slower recovery in same-store sales.
The brokerage retained its positive stance due to improving delivery volumes, store expansion and medium-term profitability targets.
The report stated, “Margin pressure to be visible in ST due to higher energy & wage inflation but medium-term target of 200bps adj. EBITDA expansion stays.”
Management has also guided for the addition of 230-250 new Domino’s stores during FY27, indicating continued expansion despite demand volatility.
Disclaimer: Investment views, ratings, and target prices mentioned in this report are sourced from a third-party brokerage and do not represent the editorial stance of this publication. Readers should not treat this content as an offer or solicitation to buy or sell securities, nor as financial advice. Market investments are subject to capital risks, and readers are advised to consult a SEBI-registered financial advisor before making any investment decisions.
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