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Outperformance continues; positive festive commentary

* Jubilant FoodWorks (JUBI) reported 16% YoY growth in standalone revenue to INR17b in 2QFY26 (in line). Domino’s reported order growth of 15% with LFL growth of 9%. The delivery business posted strong 22% YoY revenue growth (LFL +17%) and contributed 74% of total sales (vs. 70% in 2QFY25). Dine-in revenue was flat YoY despite 14% YoY growth in in-store traffic as takeaways declined 19% due to the free 20-minute delivery offer.

* The company witnessed positive festive demand in Oct’25, with performance exceeding expectations, well supported by a change in the festive period vs. last year. Management remains confident of sustaining healthy momentum through Nov-Dec’25. Domino’s India added 81 new stores (+12% YoY) and entered 16 new cities during the quarter.

* Standalone gross margin was down 170bp YoY but up 30bp QoQ at 74.4% (est. 74.7%), supported by a favorable mix, procurement gains, and cost efficiency measures. EBITDA margin was flat YoY while up 40bp QoQ to 19.4%. EBITDA grew 16% YoY to INR3.3b (est. INR3.2b). Pre-Ind-AS EBITDA margin expanded 40bp YoY (-160bp in base) to 12.1% and EBITDA was up 20% (-5% in base).

* The company benefited indirectly from GST-related advantages through lower input costs, particularly in cheese and sauces, which supported margin expansion by ~ 50bp. Part of the savings was passed on to consumers through selective price cuts, such as reducing the Big Pizza price from INR899 to INR799.

* International operations performed well, with Domino’s Turkey posting LFL growth of 5.6%, while Coffy LFL declined 1.7% (inflation-adjusted). PAT margin stood at 10.4%. Domino’s Sri Lanka and Bangladesh reported strong revenue growth of 86% and 54% YoY, respectively.

* JUBI’s focus on customer acquisition and order frequency has been driving strong delivery growth. Value offerings and product innovations will continue to drive order growth in FY26. JUBI outperformed peers in revenue growth and SSSG despite facing a challenging demand environment. We estimate standalone revenue CAGR of 15% over FY25-28E and pre-Ind-AS EBITDA margin of 12-14% during FY26-28E. We remain constructive on the business and believe that the recent stock correction (20% in last four months) protects downside risk. We value India business at 30x EV/EBITDA (pre-IND AS) and international business at 15x EV/EBITDA on Sep’27E. We reiterate our Neutral rating with a TP of INR650.

Growth outperformance continues; EBITDA margin bit better

* High-single-digit LFL growth continues: JUBI reported sales growth of 16% YoY to INR17.0b (est. INR17.1b), led by order growth of 14.8%. LFL growth was 9.1% (delivery LFL at 16.5%).

* Store rollout remains strong: In India, JUBI added 88 net stores, taking the total count to 2,450 stores. Domino’s opened 81 new Domino’s Pizza stores (total 2,321 stores). Popeyes closed 8 new stores, taking the count to 68 stores. Hong’s Kitchen store count remained unchanged at 33. Dunkin’ Donuts closed 1 store, taking the count to 28 stores.

* Steady operating margins: Gross profit grew 13% YoY to INR12.6b (est. INR12.8b). Gross margin declined 170bp YoY but rose 30bp QoQ to 74.4% (est. 74.7%). EBITDA margins was flat YoY and up 40bp YoY at 19.4% (est. 19%). PreInd AS EBITDA margin expanded 40bp YoY/10bp QoQ to 12.1% (est. 11.8%). PBT margin was at 5% vs. 4.8% 2QFY25.

* Double-digit growth in profitability: EBITDA grew 16% YoY to INR3.3b (est. INR3.2b). PBT (before exceptional) rose 23% YoY to INR856m (est. INR844m). Adj. PAT grew 23% YoY to INR639m (est. 631m).

International business

* Domino’s Sri Lanka revenue was up 86% YoY at INR317m. There was no store addition in Sri Lanka.

* Domino’s Bangladesh revenue rose 54% YoY to INR194m. There was no store addition in Bangladesh.

DPEU

* DPEU System sales were INR9,957m. Sales grew 29% YoY to INR5.b.

* Domino’s Turkey LFL growth was 5.6%, while COFFY LFL was down 1.7%.

* PAT margin was flat YoY at 10.4%.

* In DP Eurasia, it opened 5 stores in 2Q, taking the total count to 940 stores.

Highlights from the management commentary

* For FY26, the company expects India Domino’s to grow by ~15% YoY, with 5-7% growth from LFL (1-2% price mix and 3-4% volume) and 7-10% from new store additions.

* Delivery revenue grew 21.6% YoY, supported by a robust 23.7% YoY increase in order volumes, while dine-in revenue remained flat. In dine-in, store dine-in revenue grew 14%, while takeaway revenue declined by 19% YoY, as the company continued to offer free delivery within 20 minutes, which encouraged consumers to shift from takeaway to delivery.

* Management has reiterated its guidance of 200bp EBITDA margin expansion over the next three years. The margin expansion will led by GM improvement (100bp) from procurement and mix initiatives and consistent 5-7% sales growth, leading to operating leverage, especially in rent and other fixed costs.

* The company benefited indirectly from GST-related advantages through lower raw material costs, particularly in cheese and sauces, which contributed +50bp to margins. The benefit was passed on to consumers through price reductions in certain SKUs like price reduction of the Big Big Pizza from INR899 to INR799.

Valuation and view

* There are no material changes to our EBITDA estimates for FY26 and FY27.

* JUBI 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.

* JUBI’s focus on customer acquisition and order frequency has been driving strong delivery growth. Value offering and product innovation will continue to drive order growth in FY26. JUBI outperformed peers in revenue growth and SSSG despite facing a challenging demand environment. We estimate standalone revenue CAGR of 15% over FY25-28E and pre-Ind-AS EBITDA margin of 12-14% during FY26-28E. We remain constructive on the business and believe that the recent stock correction protects downside risk. We value India business at 30x EV/EBITDA (pre-IND AS) and international business at 15x EV/EBITDA on Sep’27E. We reiterate our Neutral rating with a TP of INR650.

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