Jubilant FoodWorks sees improving growth as Popeyes momentum and margin recovery strengthen

Investment View and Valuation

Motilal Oswal Financial Services, in its August 13, 2026 1QFY27 results update on Jubilant FoodWorks, reiterates its Buy recommendation following an in-line standalone performance and an improving growth outlook. The broker recently upgraded Jubilant FoodWorks from Neutral in its QSR thematic and retains a target price of Rs 625.

Motilal Oswal values the India business at 28 times EV/EBITDA and the international business at 18 times EV/EBITDA based on March 2028 estimates.

1QFY27 Standalone Performance

Jubilant FoodWorks reported 1QFY27 standalone revenue growth of 9 per cent year-on-year to Rs 18.5 billion, in line with the broker's estimate. Domino's like-for-like sales growth improved to 2.5 per cent from 0.2 per cent in 4QFY26, despite a high base of 12 per cent. Order growth was 6.5 per cent year-on-year, delivery revenue increased 12 per cent and average order value rose by high single digits quarter-on-quarter.

The dine-in and takeaway channel showed early improvement, with order volumes stabilising and order values improving.

Standalone gross margin expanded 130 basis points year-on-year to 75.5 per cent, ahead of the 75 per cent estimate. The improvement was aided by pricing, a better product mix, supply-chain efficiencies and lower wastage. LPG, labour, cheese, oil and chicken inflation remained headwinds, but a net price increase of 140 basis points and productivity initiatives contained the effect.

EBITDA grew 10 per cent year-on-year to Rs 3.6 billion, in line with estimates, with EBITDA margin increasing 20 basis points to 19.5 per cent. Pre-Ind AS EBITDA grew 7.5 per cent to Rs 2.24 billion, with margin declining 20 basis points to 12.1 per cent, versus the 11.9 per cent estimate. Higher depreciation and interest expenses resulted in PBT before exceptional items declining 1 per cent to Rs 968 million, while adjusted PAT declined 1 per cent to Rs 728 million, broadly in line with estimates.

Network Expansion and Emerging Brands

Network expansion remained robust, with Jubilant FoodWorks adding 67 net stores in India during 1QFY27 and taking its India total to 2,629 stores. Management plans to add around 300 stores annually and maintained its guidance to open 1,000 stores across brands in India between FY25 and FY28.

Popeyes was a key positive, delivering 97 per cent revenue growth and 45 per cent like-for-like growth. Management said Popeyes achieved more than 40 per cent like-for-like growth for the third consecutive quarter, with average daily sales exceeding Rs 95,000. It views Popeyes as a second growth engine.

International Business Performance

International performance was healthy overall but mixed by geography. DP Eurasia sales rose 28 per cent year-on-year to Rs 6.7 billion, supported by currency. However, Domino's Turkey like-for-like sales declined 1 per cent and COFFY like-for-like sales declined 13 per cent on an inflation-adjusted basis.

DP Eurasia opened eight stores, reaching 989 stores, while PAT fell 6 per cent year-on-year to Rs 459 million due to a lower MGL benefit and higher tax. Domino's Sri Lanka revenue rose 41 per cent to Rs 349 million, and Bangladesh revenue grew 26 per cent to Rs 223 million.

Growth Outlook and Estimates

Management expects 2QFY27 to be better than 1QFY27, with a further improvement in 2HFY27E, and remains confident of delivering 5-7 per cent medium-term like-for-like growth. It targets around 200 basis points of EBITDA-margin improvement, split broadly equally between Domino's and emerging brands.

Motilal Oswal sees customer acquisition and higher order frequency driving delivery growth, while value offerings and product innovation should support dine-in. The broker models standalone revenue CAGR of 13 per cent over FY26-FY28E and a pre-Ind AS EBITDA margin of 12.5-13.0 per cent. It made no material change to its FY27E or FY28E EBITDA estimates.

Key Pressure Points

• Commodity inflation, including pressure from LPG, labour, cheese, oil and chicken costs.
• Weaker like-for-like sales trends in Turkey and COFFY.
• The need for productivity initiatives and calibrated pricing to protect margins.