Shares of Jubilant FoodWorks Ltd, the company behind Domino’s in India, saw a significant drop in early trading on Tuesday following a report of poor like-for-like growth in the fourth quarter. The stock fell by 9.23% to Rs 418.50 on the NSE, performing below the Nifty 50 index, which fell by 0.6%.
Jubilant FoodWorks recorded a 19% year-on-year increase in consolidated revenue to Rs 2,506 crore in the January-March quarter. However, Domino’s India experienced only a slight 0.2% like-for-like growth during the same period, indicating subdued demand in its main market.
Analysts have expressed concerns that the weak like-for-like performance might impact margins in the Indian business. Despite the T20 Cricket World Cup providing some support, growth remained modest.
The company added a net total of 69 stores to its network during the quarter, bringing the total store count to 3,663. While Domino’s India opened 59 new outlets, the Turkey business expanded by four stores.
Jubilant FoodWorks also announced the decision not to renew its Dunkin’ franchise agreement in India after 15 years due to ongoing losses and sluggish growth. The existing agreement is set to expire on December 31 this year, with the company exploring options such as selling or transferring franchise rights in collaboration with Dunkin’.
The stock has faced a decline of over 20% this year and dropped around 40% over the past year.
