Global brokerage house Jefferies retained its 'Buy' rating on Jubilant FoodWorks despite reporting muted Same-Store Sales Growth (SSSG) in the March quarter. The brokerage has sharply cut its target price to ₹600 from ₹850 earlier, though it still sees around 27% upside from current levels. According to the brokerage report, "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, with the report adding, "Retain 'Buy', but upside is subject to pick up in earnings growth." However, the brokerage noted that management's calibrated pricing strategy is likely to result in a 10-12% cut in EBITDA expectations, describing the cautious approach as prudent in the current demand environment.
The company delivered strong operational performance in Q4FY26 with revenue from operations of ₹2,499.47 crore, up 19.3% year-on-year. According to the latest reports, consolidated net profit rose sharply to ₹824.23 crore from ₹493.30 crore reported in the corresponding quarter last year. Operationally, EBITDA stood at ₹484.9 crore compared with ₹391.9 crore in Q4 FY25, while EBITDA margin improved by 70 basis points to 19.4%. Key metrics from the quarter include Domino's order growth of 10% YoY and delivery contribution of 76% of overall sales. The report highlighted that gross margins improved by nearly 100 basis points due to operational efficiencies and product mix improvements, though rising wage costs and energy inflation continued to pressure operating margins.
HSBC downgraded Jubilant FoodWorks to 'Hold' and maintained its target price at ₹530, citing moderation in like-for-like growth trends. The brokerage said like-for-like (LFL) growth of 0.2% during the quarter had no significant one-off support, apart from a marginal LPG-related impact of around 0.3-0.4%, and reflected a sharp moderation in underlying momentum. HSBC added that Q1 demand trends appear marginally better but are largely activation-led, forcing the company to choose between growth and margins in the near term. However, CLSA maintained an 'Outperform' rating with a target price of ₹520, highlighting margin improvement and better-than-expected EBITDA margins. The brokerage said discontinuation of Dunkin operations could support margins further, though it noted that near-term growth may depend heavily on activation-led demand.
One of the biggest talking points in the quarter was Domino's aggressive pricing and customer acquisition strategy. As per the Jefferies report, the company reduced the free-delivery threshold to ₹99 from ₹149 to compete more aggressively with rivals and attract new customers. The report stated, "The co. also reduced free-delivery threshold to ₹99 (vs ₹149 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 flat, the weakest trend seen over the last two years.
The company's delivery segment continued to outperform other channels, with delivery sales growing 10% year-on-year and now contributing nearly 76% of overall revenue. According to the brokerage report, "Strong delivery: 10% YoY with salience rising to 76%." Management maintained a cautious approach toward price hikes despite inflationary pressures across energy and labour costs. Energy inflation alone impacted margins by over 100 basis points, while wage inflation added another 50 basis points of pressure. However, the company continued to gain market share within the pizza segment and among the top Quick Service Restaurant (QSR) chains in India. Popeyes continued to deliver strong momentum with improving store economics and healthy Same-Store Growth (SSG), adding five new stores during the quarter to reach 78 outlets. International operations also remained strong, with Domino's Bangladesh sales growing +29% and Sri Lanka delivering +61% YoY revenue growth.
