Share price of Jubilant Foodworks jumps 4% despite 33% decline in Q3 net profit

Jubilant Foodworks Limited has captured the spotlight with a 4% jump in its share price following its Q3FY25 earnings announcement. Despite reporting a 33% year-on-year (YoY) decline in net profits, the Company impressed investors with a 19% surge in standalone revenue. These mixed earnings reflect the intricate dynamics of the food-service sector and Jubilant Foodworks' evolving strategies, particularly with its flagship franchise, Domino's Pizza. Let's dive into the details.

Jubilant Foodworks Share Price Performance

The Jubilant Foodworks share price surged by 3.76% on February 13, 2025, trading at ₹665.10 during Thursday's morning trading session. This notable rise followed the announcement of Q3FY25 financial results, underscoring the market's optimistic response to the revenue growth despite the dip in net profits.

Market Performance Snapshot

• Percentage Increase: 3.76%

Investors appeared encouraged by the robust revenue growth and Domino's India's improving operational metrics, leading to the bullish sentiment in the stock.

The Mixed Q3FY25 Earnings

Net Profit Decline

Jubilant Foodworks reported a 33% decline in net profits, down from ₹61 crore in Q3FY24 to ₹41 crore in Q3FY25. The primary contributors to this dip were:

• Rising Costs: Higher wage expenses and increased raw material prices, particularly for vegetables and meat, dented margins.
• Domino's Franchise Impact: Domino's India, the company's flagship brand, faced challenges in sustaining profitability due to these increased operational costs.

Revenue Growth

On the brighter side, the Company achieved a 19% YoY increase in standalone revenue, which climbed from ₹1,355 crore in Q3FY24 to ₹1,611 crore in Q3FY25. It got an additional push by:

• Store Expansion: Aggressive addition of new stores across India.
• Digital Transformation: Enhanced app traffic and conversions, increasing customer engagement.
• Delivery Boom: Robust delivery sales growth of 25% contributed significantly to revenue expansion.

Key Financial Metrics

Below is a quick summary of Jubilant Foodworks' Q3FY25 financial performance:

Domino's India: A Closer Look

Strong Like-for-Like Growth

Domino's India reported a 13% increase in like-for-like growth, primarily driven by a 25% surge in delivery sales. The brand's emphasis on a digital-first approach and streamlined operations has been a major growth driver.

Average Daily Sales

In Q3FY25, the average daily sales in Domino's India's mature stores stood at ₹85,959, marking a 7% improvement from the previous quarter. This figure underscores the strong demand recovery and improved consumer sentiment during the festive season.

Management's Perspective

Chairman and Co-chairman's Remarks

Shyam S. Bhartia, Chairman, and Hari S. Bhartia, Co-Chairman, expressed optimism about the company's performance, stating:

"Q3FY25 was a defining quarter for the Company. This success underscores the strength of our strategy and our team's dedication. We remain focused on further strengthening Domino's, enhancing the customer experience, and accelerating the path to profitability for our emerging brands."

CEO and MD's Vision

Sameer Khetarpal, CEO and MD of Jubilant Foodworks, emphasised the company's growth strategy, saying:

"We remain focused on building platforms and accelerating our prowess as a food-tech company"

Summary

Jubilant Foodworks' Q3FY25 performance reflects a mixed bag of challenges and opportunities. While the 33% decline in net profits highlights cost pressures, the 19% revenue growth and strong operational metrics for Domino's India paint a promising picture for the future. The company's strategic investments in technology, store expansion, and customer engagement have started to pay dividends, driving its share price upward.

Investors and market watchers will keenly observe Jubilant Foodworks' next moves, especially its efforts to balance costs and sustain growth in a competitive landscape.