Jubilant FoodWorks hits Q4 speed bump as LPG disruption masks demand recovery
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Jubilant FoodWorks , the operator of Domino’s Pizza in India, saw a subdued end to FY26, with supply-side disruptions masking what analysts say are early signs of demand recovery in the quick service restaurant (QSR) sector.
Elara Capital report shows Domino’s India posted like-for-like (LFL) growth of just 0.2% in Q4FY26, missing estimates and implying an underlying same-store sales decline of about 1.5–2%. The weakness was largely attributed to constrained commercial LPG supply, a critical input for operations, amid ongoing geopolitical disruptions.
“In our view, this is likely the primary driver of the miss, rather than any structural demand weakness,” said Karan Taurani, executive vice president at Elara Capital, noting that over 95% of Jubilant’s outlets remain dependent on LPG. He added that competitive intensity in the pizza category has also eased, supporting the underlying demand environment.
Recovery underway, but execution risks persist
According to Motilal Oswal Financial Services, QSR companies, including Jubilant FoodWorks, are showing “early signs of sequential improvement,” with January seeing better traction and improved same-store sales growth compared to the previous quarter.
“Demand recovery was visible… and most companies have seen better SSSG trends than 3Q,” said the report. The brokerage expects the QSR segment to post 13% revenue growth and 8% EBITDA growth in Q4FY26.
However, Jubilant’s performance lagged peers, largely due to its higher exposure to LPG. While competitors typically have 20–45% dependence on LPG, Domino’s India has more than 70% of stores reliant on the fuel, making it more vulnerable to supply disruptions, Motilal Oswal noted.
Despite these challenges, companies have managed to keep operations running through workarounds such as alternative cooking methods and menu adjustments. Still, analysts cautioned that “any supply shortage can disrupt operations going ahead.”
For Jubilant, the Q4 miss dragged full-year performance. FY26 revenue growth came in at about 13% year-on-year, below Elara’s estimate of 17.7%. Standalone Q4 revenue stood at ₹16.8 billion, up 6.2% year-on-year, also below expectations of ₹17.6 billion.
That said, growth was supported by aggressive store expansion. Jubilant added a net 69 stores in the quarter, taking its total network to 3,663 outlets. Domino’s India alone added 59 stores, pushing its count to 2,455, up 12.7% year-on-year — one of the strongest additions in recent quarters.
International markets offered some support, with Domino’s Turkey posting 9% LFL growth, while consolidated revenue rose 19.1% year-on-year to ₹25 billion.
Margins, however, remain under watch. Elara estimates standalone EBITDA margin at around 20.4% for Q4, a marginal 10 basis point sequential decline.
Looking ahead, analysts are cautious. Elara has flagged potential cuts of up to 3% in revenue estimates and up to 8% in earnings forecasts over FY26–28, following the Q4 miss. At the same time, Motilal Oswal expects margin pressures to build across the sector as input costs rise, even as companies take calibrated price hikes.
While Motilal is NEUTRAL, Elara has a BUY rating on JUBI, with a target price of ₹780 per share. “This is supported by easing competitive intensity in the pizza segment, higher delivery exposure aligned with evolving consumer preferences, and potential margin levers,” said Taurani.