Mumbai: Shares of Jubilant FoodWorks Ltd, the parent company of Domino's outlets in India, plummeted sharply in early trade on Tuesday after the company reported weak like-for-like (LFL) growth in its fourth quarter (Q4) business update. The stock fell as much as 9.23 per cent to Rs 418.50 on the NSE, underperforming the benchmark Nifty 50, which declined 0.6 per cent. Jubilant FoodWorks reported a consolidated revenue growth of 19 per cent year-on-year to Rs 2,506 crore in the January-March quarter.
However, Domino’s India posted a marginal LFL growth of 0.2 per cent during the quarter, indicating muted demand trends in its core market. Analysts said the weak LFL performance could weigh on margins in the India business. “Despite tailwinds from the T20 Cricket World Cup, which is held biennially, growth momentum remained subdued,” they added. Analysts also highlighted limited scope for further expansion in delivery contribution and flagged concerns over an unfavourable base impacting growth going ahead.
In contrast, the Turkey business showed relatively better traction. During the quarter, the company added a net 69 stores across its network, taking the total store count to 3,663. Domino’s India added 59 new outlets, while the Turkey business added four stores. Separately, the company said it will not renew its franchise agreement for Dunkin' in India, bringing an end to its 15-year partnership amid persistent losses and weak growth.
The existing agreement is set to expire on December 31 this year. The company said it will evaluate options for the business, including sale or transfer of franchise rights, in consultation with Dunkin’. However, the stock has witnessed a decrease of more than 20 per cent so far this year. It declined about 40 per cent in the last one-year horizon.
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