Jubilant Foodworks sees Domino’s recovery and Popeyes scale support margin expansion

Investment View and Valuation

Motilal Oswal Financial Services’ October 13, 2026 company update on Jubilant Foodworks maintains a Buy rating and a target price of Rs 625. The broker views Jubilant as the listed QSR player best positioned to benefit from a recovery in discretionary consumption.

The positive view reflects a recovery in Domino’s Pizza like-for-like growth, the rapid scaling of Popeyes, adequate supply-chain capacity and potential operating leverage following the recent stock correction.

Motilal Oswal values the India business at 27 times and international operations at 15 times pre-Ind AS EV/EBITDA on September 2028E. The target is supported by the stock trading at 15 times FY28E pre-Ind AS EV/EBITDA.

Domino’s Pizza Growth Recovery

Domino’s Pizza growth has improved sequentially, with like-for-like growth increasing from 0.2 per cent in Q4 FY26 to 2.5 per cent in Q1 FY27 and 4.1 per cent in Q2 FY27.

Management has guided for 5 to 7 per cent like-for-like growth in FY27, implying high-single-digit growth in H2 FY27. Motilal Oswal expects a favourable base, sustained delivery growth and recovery in dine-in and takeaways to support this trajectory.

Delivery contributed about 76 per cent of sales, aided by customer engagement and digital initiatives. Delivery revenue grew 12 per cent in Q1 FY27, while Domino’s gained about 80 basis points of delivery share among the top 25 QSR brands. Domino’s average daily sales of about Rs 80,000 compares favourably with Rs 32,000 to Rs 42,000 for Pizza Hut operators cited in the report.

Popeyes Provides a Second Growth Engine

Popeyes is emerging as a second growth engine. Its revenue rose 97 per cent year on year to Rs 70 crore in Q1 FY27, while like-for-like growth exceeded 40 per cent for the third consecutive quarter.

The Popeyes store network expanded from 42 in FY24 to 88 in Q1 FY27, and average daily sales reached Rs 96,000, comparable with KFC. Seven cities had average daily sales above Rs 1 lakh.

Management targets 250 Popeyes stores and Rs 1,000 crore of revenue over the next three to four years. Upfront marketing and scale-related costs continue to weigh on profitability, but Motilal Oswal expects rising store productivity and operating leverage to support margins as the format grows.

Menu Innovation and Customer Engagement

Jubilant is using menu innovation to increase frequency, occasions and ticket size. Domino’s value offerings are intended to support traffic, while Big Big Pizza, Sourdough and Cheese Lava target premiumisation and higher ticket sizes. Chicken, beverages and desserts provide opportunities for add-on sales.

The Domino’s app accounts for about 70 per cent of online orders. This enables targeted offers, customised combinations and loyalty engagement while reducing dependence on aggregators.

Management’s renewed focus on dine-in and takeaways includes value offers, store upgrades and dedicated teams.

Supply-Chain Capacity and Capital Allocation

Motilal Oswal believes the major supply-chain investment cycle is largely complete. Jubilant commissioned the Bengaluru food park in November 2023 and the Mumbai food factory in March 2026.

Its eight commissaries can support about 5,000 stores, allowing capital allocation to shift towards growth and productivity. Management has guided for FY27 capital expenditure of Rs 750 crore to Rs 900 crore, broadly similar to FY26, primarily for Domino’s and Popeyes outlets, store upgrades and technology.

The broker expects better productivity to improve return on capital employed and free cash flow over the medium term.

Margin Outlook and Financial Estimates

Management aims for about 200 basis points of standalone pre-Ind AS EBITDA-margin expansion between FY24 and FY28. However, margins were broadly flat at about 12.5 per cent from FY24 to FY26.

Motilal Oswal expects FY27 to be a transition year, with productivity gains largely offsetting input-cost inflation. Its estimates assume a flat FY27 pre-Ind AS EBITDA margin of 12.6 per cent and a modest 40-basis-point increase to 13.0 per cent in FY28, leaving potential upside if efficiencies materialise earlier.

The broker forecasts standalone revenue, EBITDA and profit after tax CAGRs of 13 per cent, 15 per cent and 21 per cent respectively over FY26 to FY28E.

International Operations and Key Risks

International operations provide earnings and cash-flow support but remain a risk to near-term growth. DP Eurasia, which accounted for 26 per cent of consolidated revenue, reported 28 per cent year-on-year revenue growth to Rs 670 crore in Q1 FY27 and has started paying dividends to Jubilant.

However, inflation-adjusted negative like-for-like growth at Domino’s Turkey, continued pressure at COFFY, and hyperinflation accounting and currency movements create reported-performance volatility.