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Sound growth strategy but margin pickup slower; retain ADD

JUBI’s first analyst meet showcased the drivers of its recent outperformance and thrust for share gain (double-digit topline CAGR) via accelerated expansion of +1,000 Domino’s stores over FY25-28, focused innovations (food platforms/ value) and strengthening of its differentiated front-/back-end infrastructure. JUBI’s proprietary tech platforms are driving higher pace of store additions, and its front-/back-end investments are helping lower food cost/deliver faster (targeting 20 mins in the top-7 metros). Accelerated product innovation has been a key driver of the growth turnaround, and JUBI is focusing on 5 new food platforms (such as chicken/rice/value snacking) that can gradually scale to Rs10bnpa sales. Turkish subsidiary DPEU also targets outgrowing the industry with a strong value proposition, ~80 annual additions for Domino’s (755 stores now), and with focus on becoming a top-3 coffee player with simple pricing in Coffy (vs #7 now). While JUBI’s digital capabilities and growth strategy are topnotch, it is likely to see slower margin improvement. JUBI has guided to ~200bps gain in consolidated PAT margin over FY25-28 which leads to a 120- 130bps cut to our margin estimates and a ~6% cut to our SOTP-based TP to Rs750 (vs Rs800 earlier; Exhibit 9). Better cash generation on improved macros can retire the high-cost debt in Turkey in our view, and is an upside.

Leveraging back-end tech platforms to pursue accelerated expansion

JUBI targets accelerated expansion of ~1,000 Domino’s stores over FY25-28 (vs recent annual additions of 200-250 stores). JUBI is gaining strong traction in tier2/3 cities like Belagavi (Karnataka), Tinsukia (Assam), and Solapur (Maharashtra), and is hence gaining confidence on penetrating deeper in cities like Latur, where it is opening its 3rd store. JUBI targets expanding penetration to ~700 cities (vs 466 currently). It is also leveraging its proprietary tech platform (Location.AI) to identify unserved areas by existing store polygons and potential locations in expanding catchments of an existing city, basis app downloads in those localities. JUBI also highlighted that the recent additions have been made by leveraging this tech, and initial signs have been fairly encouraging, with improving success ratios for new store openings.

Own app/loyalty program helping improve frequency and conversions

JUBI’s front-end capabilities are clearly differentiated vs peers, helped by its ahead-ofthe-curve investments in building a multi-country and multi-brand tech platform. JUBI has worked significantly on its UX (food-first), and the app is now completely topical and dynamic, catering to multiple festive occasions with-in-the-year; it also offers a customized experience in terms of menu sequencing and discounts, depending on the user profile. JUBI’s loyalty program is also ramping-up well, with 31mn loyalty members and 75% orders in in-house app from loyalty members. JUBI believes that its loyalty program is reducing the churn and increasing the order frequency, thereby leading to a higher lifetime value for a consumer. JUBI highlighted that it has invested 36 months to build the next-gen consumer platform, but that the module can now be replicated for new brands with-in 3 weeks and a new aggregator onboarded within 4 weeks.

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