Jubilant FoodWorks profit slumps 59.05% in March quarter amid soaring inflation

Jubilant FoodWorks, which owns the franchise of popular pizza chain Domino's Pizza in the country as well as in Sri Lanka and Bangladesh, reported its March quarter results on Wednesday. For the March quarter, the company's profit declined by 59.05% year-on-year (YoY) to ₹47.5 crore against ₹116 crore in the same period last year. The company has attributed soaring inflation for the fall in its net profit.

"There are near-term concerns around historic high inflation and slowing market growth, but we are confident in our unique ecosystem's ability to tap on the potential that lies ahead of us and reorient the business to deliver sustained profitable growth," say Shyam S. Bhartia, chairman and Hari S Bhartia, co-chairman, Jubilant FoodWorks Limited. 

During the quarter under review, the company's revenue from operations grew 8.1% year-on-year to ₹1,252.3 crore against ₹1,157.8 crore in the March quarter of FY22. In the March quarter, the company's EBITDA (earnings before income, tax, depreciation and amortization) slipped 12.9% year-on-year to ₹252.2 crore. In the March quarter of FY22, the company’s EBITDA stood at ₹289.7 crore. Jubilant Foodworks' EBITDA margin also declined 488 basis points to 20.1% in the March quarter against 25% in the same period last year.

On a sequential basis, the company's net profit plunged 46.3% quarter-on-quarter (QoQ) against ₹88.5 crore in the December quarter. The revenue from operations sequentially witnessed a growth of 4.7% QoQ as against ₹1,316.6 crore in the December quarter. In FY23, the company's net profit tumbled 18.5% year-on-year to ₹356.12 crore against ₹437.5 crore. The company's revenue in FY23, however, grew 17.6% year-on-year to ₹5,095.9 crore against ₹4,331 crore in FY22. The board of directors of the company has recommended a dividend of  ₹1.2 per equity share of face value of  ₹2 each for the financial year ended 31st March 2023.

Jubilant Foodworks operate Domino's Pizza, Dunkin' restaurants and Popeyes restaurants in India, Bangladesh, Nepal and Bhutan. The company currently operates 21 Dunkin' restaurants across six Indian cities and 13 Popeyes restaurants in two cities. In 2019, Jubilant FoodWorks launched its first owned-restaurant brand 'Hong’s Kitchen' in the Chinese cuisine segment which now has 13 restaurants across three cities.

In Domino's, the delivery and dine-in channels registered 8.4% and 35.6% growth, respectively. The enrolment to the loyalty program – Domino's Cheesy Rewards – grew by 28.3% versus the prior quarter to 13.6 million and the loyalty order contribution reached 45% in March 2023. Consumer engagement remains elevated with the quarterly app downloads at 8.5 million, up by 10.4% and MAU at 11.1 million, up by 22.0% year-on-year. In FY23, the company opened 249 Dominos stores across the country.

"We are accelerating efforts to execute and deliver on the plans we’ve put into action to revert to high top-line growth while significantly improving all aspects of our cost structure. This quarter saw encouraging progress in registering order-led growth while limiting the impact of inflation on our gross margins through a series of well-timed interventions. As we step into the new fiscal year, we derive confidence from the strength of our brands, operational prowess, quality of innovation and commitment of our people to navigate the business well in the current environment," says Sameer Khetarpal, CEO and MD, Jubilant FoodWorks Limited.

Ahead of the quarterly results, the shares of Jubilant Foodworks were trading higher by 3.9% to hit an intraday high of ₹485.00 apiece on the BSE on Wednesday. The scrip closed 3.05% higher at ₹480.75, as the market capitalisation of the company stood at ₹31,722.06 crore as 4,24,054 shares exchanged hands on the BSE, higher than the two-week average of 2.06 lakh shares.