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Domino's India Parent Stock Plunges 9% on Weak Q4 Growth, Dunkin' Exit

Shares of Jubilant FoodWorks plummeted over 9% following a weak business update showing Domino's India posted a marginal 0.2% like-for-like growth in Q4. The company also announced it will not renew its loss-making Dunkin' franchise agreement in India, ending a 15-year partnership. While the Turkey business showed better traction, analysts flagged concerns over muted demand and limited scope for delivery growth in India. The stock has declined more than 20% year-to-date, underperforming the broader market.

Key Points: Jubilant FoodWorks Stock Drops 9% After Weak Q4 Update

  • Stock fell over 9%
  • Domino's India LFL growth only 0.2%
  • Ending Dunkin' franchise after 15 years
  • Turkey business shows better traction
  • Stock down over 20% YTD
2 min read

Jubilant FoodWorks stock declines over 9 pc over weak Q4 business update

Jubilant FoodWorks shares fell sharply as Domino's India posted near-flat growth. The company also announced it will end its Dunkin' franchise agreement.

"Despite tailwinds from the T20 Cricket World Cup... growth momentum remained subdued. - Analysts"

Mumbai, April 7

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 growth in its fourth quarter 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.

- IANS

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Reader Comments

P
Priya S
The 0.2% LFL growth says it all. The competition from local pizza brands and cloud kitchens is intense. Also, with Zomato and Swiggy's own brands, the delivery space is crowded. Domino's needs to innovate beyond just new toppings. Maybe focus on healthier options or better value combos.
R
Rohit P
Interesting that Turkey is doing better. Maybe they haven't reached saturation there yet. In India, there's a Domino's in every other neighborhood. How many more stores can they realistically add? The growth story seems to be over for now. Smart move to exit Dunkin' though, that brand never really took off here.
S
Sarah B
As a long-term investor, this is concerning. A 40% drop in one year is massive. The management needs to clearly communicate their strategy to revive the India business. Just adding more stores isn't the answer if same-store sales are flat. The quarterly results will be crucial.
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Meera T
Honestly, I still love Domino's for their consistent delivery time and hot pizzas 🍕. But I agree, it's become a treat rather than a regular order. The "value" in their value meals has reduced. Hope they take this as feedback and work on their pricing strategy.
V
Vikram M
This is a classic case of a blue-chip facing growth pangs. The Indian QSR market is evolving. Consumers have more choices now. Jubilant needs to look beyond just pizza. Their foray into Chinese with Hong's Kitchen hasn't set the world on fire either. Time for a serious strategic review.

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