Q1 Sales Growth Maintained by Jubilant FoodWorks Despite Turkey's Underperformance
Jubilant FoodWorks, the largest food service operator in the country, has announced a robust 17% increase in its consolidated revenue for the first quarter of the financial year 2026 (Q1 FY26). This growth was driven by a combination of factors, including strong volume growth, price increases, and the performance of its international businesses.
The underlying volume growth in India showed a sequential improvement, supported by improved rural demand and steady urban demand. This high single-digit volume growth significantly contributed to the revenue increase. Much of the revenue growth was price-led, with recent price hikes across the portfolio boosting top-line growth despite input cost pressures.
Positive trends in core franchises and the continuous scaling-up of new businesses in the domestic market also aided growth. Jubilant FoodWorks' international markets delivered high-teen constant currency revenue growth, driven by broad-based growth across most international markets, contributing meaningfully to the consolidated growth.
Despite headwinds such as input cost inflation and a high base from the previous year, the company maintained its growth momentum with a balanced mix of volume and price factors. The management expects gradual improvement in demand going forward and modest operating profit growth despite investment in advertising and promotional activities.
In India, Domino's Pizza, a key brand under Jubilant FoodWorks, added 61 new stores, taking the total count to 2,240. However, the Turkey business, one of the select international markets, opened seven stores and closed one, ending with 752 stores. Despite this, Domino's Turkey reported a decline of 2.2% in LFL growth, post-IAS-29 adjustments.
Morgan Stanley has an "overweight" stance on Jubilant FoodWorks, viewing the Q1 revenue increase as positive, especially at a time when urban consumption is recovering slowly. On the other hand, CLSA has an "underperform" rating on Jubilant FoodWorks, with a focus on profitability to judge if high LFL growth is translating to better margins in the company's results.
As of the close of trading on Monday, shares of Jubilant FoodWorks fell 3.66% on the BSE to Rs 683.95 apiece. Despite this, the year-to-date performance shows a decline of 4.76%, and in the last one month, the stock has fallen 1.64%.
| Factor | Impact on Q1 FY26 Revenue Growth | |----------------------------|---------------------------------------------------| | Underlying volume growth | High single-digit volume growth improved sequentially and contributed significantly | | Pricing | Recent price hikes led to a large part of revenue gain | | Domestic market trends | Improvement in rural demand, steady urban demand, positive core franchise and new business growth | | International markets | High-teen constant currency growth across most markets strengthened consolidated performance |
This combination of volume growth, pricing actions, and broad international market strength led to Jubilant FoodWorks' robust 17% consolidated revenue rise in Q1 FY26.
- The price hikes in Jubilant FoodWorks' portfolio significantly contributed to the robust 17% revenue increase experienced in Q1 FY26, demonstrating the impact of strategic financing decisions on business growth.
- With a high single-digit volume growth in India, supported by improved rural demand and steady urban demand, the domestic market trends have played a crucial role in driving the revenue growth for Jubilant FoodWorks, demonstrating the potential of the region's market in finance and business.
- The international markets, which contributed a meaningful portion to Jubilant FoodWorks' consolidated growth with high-teen constant currency growth, underline the importance of expansion and diversification in the face of technological advancements and market changes in the DEFI sector.
- Despite input cost inflation and a high base from the previous year, Jubilant FoodWorks managed to maintain its growth momentum with a balanced mix of volume and price factors, highlighting the company's ability to navigate market challenges in the finance industry.
