Focus shifts to Ajay Kaul's successor

A day after the surprise exit of Jubilant FoodWorks Chief Executive Officer Ajay Kaul, attention is shifting to his replacement.

While Jubilant FoodWorks, the master franchisee of Domino's and Dunkin' Donuts in India, remained silent about this, global brokerage Credit Suisse said in a note on Tuesday that the likely candidate could be Dev Amritesh, Domino Pizza India's current president and chief business officer. Amritesh, who has been with Jubilant since 2005, was appointed to the role in a senior-level rejig in April. Before this, he was the president & COO, Dunkin' Donuts India.

Other international brokerages such as CLSA have also said the likely candidate would come from within. CLSA said an internal candidate would ensure a smooth transition, which is key.  

"The task for the new CEO will be to look at store-level innovations rather than adding new ones. So expansion, in my view, will be vertical rather than horizontal,” said Naveen Kulkarni, co-head, research, PhillipCapital. He said the quick-service restaurant business is witnessing a slowdown, and increasing the base of stores would only compound matters from a same-store sales growth perspective.

Abneesh Roy, senior vice-president, institutional equities (research), Edelweiss, says, "Jubilant has been expanding Domino’s stores recklessly, leading to cannibalisation. The company needs to slowdown new store additions to 100 a year."

In the past four years, Domino’s has more than doubled stores to 1,049 (as of June 30, 2016) from 489 as on June 30, 2012. But SSG, tracked by investors and analysts, in the interim, fell to -3.2 per cent in the quarter ended June, its lowest in seven quarters.

While sources say Kaul demonstrated aggression in setting up a robust back-end system from sourcing to manufacturing and delivery, a discretionary slowdown marred efforts at the store-level. Kaul was honest enough, say sources, to admit the challenges faced by QSRs in general. The National Restaurant Association of India and Technopak say challenges remain in the near term.