Jubilant Foodworks bulls expect re-rating but CLSA remains cautious

Shares of Jubilant Foodworks Ltd., the operator of Domino's Pizza in India, will be in focus on Friday, November 14, after the company delivered a strong September-quarter performance, outpacing most of its peers.

The company reported a 19.7% year-on-year rise in consolidated revenue to ₹2,340 crore in the quarter, while EBITDA grew 19.5% to ₹476 crore.

EBITDA margins remained steady at 20.3%, compared to 20.4% last year.

The company's net profit surged 53.7% to ₹109.9 crore, and declined 23.5% in finance costs to ₹105.7 crore.

Standalone India operations also posted healthy growth, with revenue rising 15.8% to ₹1,698.6 crore and EBITDA growing at the same pace to ₹329 crore. Margins for the India business remained stable at 19.4%.

For Domino's India, like-for-like (LFL) growth remained in healthy double digits across recent quarters, coming in at 9.1% for Q2FY26. Delivery LFL growth was particularly strong at 16.5%.

The company continued its rapid expansion, adding 81 new Domino's outlets during the quarter, taking the total store count to 2,321. Its newer brands also showed momentum, with Popeyes recording strong double-digit same-store sales growth (SSSG).

Jubilant bull vs bear

Shares of Jubilant Foodworks were upgraded to 'Buy' by HSBC, with a price target of ₹660, driven by the recent stock correction, the strong quality of the company's franchise, ongoing strategic initiatives, and moderating competition.

HSBC said that while SSSG in the second half of FY26 is expected to soften compared to the first half, its 5% estimate for H2FY26 remains healthy and compares favourably with other consumer peers, with room for upside.

Jefferies also maintained its 'Buy' rating on the stock, with a ₹1,000 price target, citing that Jubilant's same-store sales performance continues to outpace other QSR players.

The brokerage added that Domino's delivery growth in Q2 was comparable to food-tech platforms like Zomato and Swiggy.

Jefferies said the key driver for the stock going forward will be growth from Q3 onwards, as the base for SSS becomes more challenging.

The company's medium-term guidance includes mid-teens revenue growth, led by 5-7% SSSG, while EBITDA margins are expected to expand 200 bps from FY24 levels.

Citi, which also reiterated its 'Buy' call with a ₹800 target, said it favours Jubilant Foodworks' focus on growth and market share gains, even at the expense of margins, especially when most other QSR players are reporting year-on-year declines in average daily sales and profitability.

Despite a high LFL base in the first half, Citi expects the company to continue delivering mid-single-digit LFL growth, led by new product innovations. With LFL trends ahead of peers and profit growth outpacing revenue growth, Citi believes there is room for a re-rating.

On the flip side, CLSA maintained an 'Underperform' rating with a ₹477 price target. It said that while the sales miss was already known based on the company's quarterly update, EBITDA margin came in 20 bps below consensus, though it improved slightly sequentially.

CLSA mentioned a minor improvement in gross margins due to price hikes and higher packaging charges. Sales per store rose 4.3% year-on-year, driven by 9.1% LFL growth for Domino's India.

The brokerage believes the early festive season also boosted demand during Q2 and into October.

Shares of Jubilant FoodWorks Ltd. ended Thursday's session 1.59% lower at ₹576. the stock is down 22% so far in 2025.