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LFL growth maintained, eyes on margin

Jubilant FoodWorks (JUBI IN) posted a strong 12.1% like-for-like (LFL) growth in Q4, building on momentum in Q3. Standalone gross margin was hit (to a 19-quarter low), led by inflationary pressure, and though impact on EBITDA margin was low given contained cost. Expect JUBI to continue with LFL growth in H1FY26. Guidance of 200bps EBITDA margin gain by FY28 seems achievable given cost rationalization measures and scale benefits. JUBI is now growing in both channels – Dine-in turned positive after six quarters. For FY26E-27E, we raise revenue estimates by 3-4%, with margin estimates largely unchanged. We introduce FY28E and maintain Accumulate with SoTP-TP unchanged at INR 730.

LFL momentum continues: JUBI in Q4 posted an LFL growth of 12.1% YoY, maintaining Q3 momentum. The Delivery channel continued to fuel growth, posting channel LFL growth of 21.9% YoY, led by 33.2% YoY growth in orders. Expect this momentum to flow through in H1FY26 given the low H1FY25 base. Notably, dine-in grew 0.6% YoY after six quarters, on robust traction in INR 99-meal (aimed at lunch hours) and exclusive dine-in offers. Both channels have turned positive, a rare scenario in QSR at the moment. Salience of the delivery channel increased to 72.9%, +500bps YoY, underscoring traction in JUBI’s free delivery model. In FY25, Domino’s India added 184 stores (+40 in Q4), taking the store count to 2,179. It has guided for 250 net additions in FY26, in line with the 3,000 target by FY28. We expect store expansion CAGR of 9.2% in FY25-28E. As regards menu innovation, JUBI is keen on growing its chicken-based offerings. It launched BigBig 6 in 1 pizza, starting at INR 799. Popeyes is expected to scale in South and North Delhi. DP Eurasia posted a positive LFL growth of 0.9% YoY, ending FY25 with 21.8% EBITDA margin.

Inflationary pressure hits gross margin: Elevated prices of cooking oil and cheese hit gross margin (down 54bps QoQ to 74.5%, the lowest in 19 quarters). However, contained employee cost and other expenses dragged down EBITDA by just 16bps. JUBI has guided for 200bps expansion in EBITDA margin by FY28, led by volume growth and internal efficiency measures, which seems achievable given endeavors to contain fixed costs and drive headline scale. Expect EBITDA margin at 21.2% by FY28E, implying a 186bps gain on FY25 base.

Maintain Accumulate; TP unchanged at INR 730: JUBI has grown (~10.6% SSSG) ahead of peers (Pizza Hut-Sapphire : 1% YoY). Superior customer experience via free and fast delivery and traction in the dine-in channel continue to support growth. With robust LFL outlook, we upgrade our revenue estimates by 3-4% for FY26E-27E, with FY25-28E CAGR at 12.2%. Expect 220/230 store adds in FY26E/27E and 210 in FY28E. Margin guidance of 200bps rise seems achievable given scale and cost control. Our EBITDA margin estimates are largely unchanged. Expect 21.2% EBITDAM by FY28E. An improved margin trajectory ahead of management guidance and our estimates is a key monitor-able for share price performance. JUBI is trading at premium valuations of 75x P/E (Standalone-FY28E); our target EV/EBITDA(Pre-IndAs) implies a 79x P/E (FY28E). We maintain Accumulate with SoTP-TP unchanged at INR 730, valuing the standalone business at 36x EV/EBITDA (pre-IndAs) and DP Eurasia at 50x June 2028E P/E.

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