Jubilant FoodWorks stock serves 7% gains to investors post healthy Q3

Jubilant FoodWorks share price surged as the company posted robust performance in Q3 given the current state of QSR chains

Jubilant FoodWorks share price served robust returns to investors on Thursday, February 13, 2025. The stock jumped 7.4 per cent on the BSE, hitting an intraday high of Rs 688 per share on the stock exchange. By comparison, the benchmark Sensex index today was ruling around 0.6 per cent higher.   

The rise in Jubilant Food share price came as analysts appreciated the quick service restaurant’s (QSR’s) better-than-peers performance in the December quarter (Q3) of the current financial year 2024-25 (FY25). Besides, they remain hopeful of a quick recovery in the company’s business amid its focus on ‘delivery’ segment.

 

"Jubilant FoodWorks yet again posted robust performance in Q3 given the current state of QSR chains. All the right steps in the past address exact consumer needs – Fast and free delivery. We note that while peers are 'recovering', Jubilant FoodWorks is 'growing'," said analysts at Elara Capital in their Q3 results review report.

 

 

During the October-December quarter, Jubilant Food reported a 32.8 per cent year-on-year (Y-o-Y) decline in net profit to Rs 41 crore, in-line with estimates.  READ: Jubilant Foodworks Q3 FY25 Results

 

Its standalone revenue climbed 19 per cent on year, to Rs 1,611 crore, while Ebitda (earnings before interest, tax, depreciation, and amortisation) increased 10.6 per cent to Rs 312.7 crore.

 

Jubilant FoodWorks' Domino’s saw an order growth of 34 per cent, with like-for-like (LFL) growth of 12.5 per cent. Delivery business saw a 30 per cent Y-o-Y revenue growth with 25 per cent LFL growth. Dine-in revenue, meanwhile, fell 2 per cent Y-o-Y as the waiver of delivery charges shifted demand from dine-in to delivery.

 

Domino's India also added 60 new stores in Q3FY25 (up 11 per cent Y-o-Y) and entered 19 new cities during the quarter.

 

On the downside, however, Jubilant saw standalone gross margin contracting 160 basis points Y-o-Y and 100 bps Q-o-Q to 75.1 per cent, dented by higher festive-season discounts, increased cheese offerings, and raw material inflation.

 

Ebitda margin contracted 150 bps Y-o-Y to 19.4 per cent, while higher depreciation (up 19 per cent) and interest costs (up 17 per cent) led to a decline in profits.

 

"Jubilant FoodWorks has been the key beneficiary of healthy traffic growth for the delivery business. Delivery is expected to outperform in the near-term, which will continue to lead to better growth metrics than those of its peers in the near-term," said those at Motilal Oswal Financial Services.

 

Operating margin, it added, is likely to see a slower recovery owing to the company’s continuous reinvestments in its core capabilities.

 

Meanwhile, among the international markets, Domino’s Sri Lanka revenue rose 65 per cent Y-o-Y (Rs 21.3 crore, no store addition), Bangladesh revenue grew 39 per cent Y-o-Y (Rs 17.3 crore, two stores added), DP Eurasia revenue (Rs 504.4 crore, 23 stores added).

 

Jubilant FoodWorks Outlook

Going ahead, Jubilant Food expects demand to pick-up in Q4FY25. The shift from dine-in to delivery, the management said, continues in both India and international markets. Thus, the company is recalibrating its store size to 1,200 square feet, with more focus on delivery for its high-street stores.

Jubilant FoodWorks share price

Analysts at Elara Capital have upgraded the stock to ‘Accumulate’ from ‘Reduce’ with a higher target price of Rs 730 (from Rs 630).

 

"We expect Jubilant FoodWorks to continue with its performance. The company should maintain its expansion spree with better LFL growth. We increase our LFL outlook and store addition estimates, and expect 200 net new stores (from 170 earlier) each in FY26/27, resulting in revenue upgrade of 4.1 per cent and 6.4 per cent for the respective years. EPS is upgraded by 6.7 per cent and 8.3 per cent in FY26 and FY27," it said.

 

Motilal Oswal Financial Services, meanwhile, has maintained its earnings estimate with a ‘Neutral’ rating on the stock. It, however, has cut the share price target to Rs 715.

 

Emkay Global Financial Services, too, has cut Jubilant Food share price target to Rs 800 (retained ‘Add’ rating) amid weak margins in Q3FY25.