Jubilant FoodWorks share price drops 3% ahead of Q3 results announcement; 5 things you need to know

Jubilant FoodWorks Ltd (JFL), the master franchise holder for Domino’s Pizza in India, Nepal, and Sri Lanka, witnessed a 3% drop in its share price ahead of its Q3FY25 earnings announcement. Shares of the food service giant fell to ₹641.35 apiece in early trading on the National Stock Exchange (NSE) on Tuesday, February 11. The market’s cautious stance reflects investors’ anticipation of the company’s performance for the quarter ended December 31, 2024.

As Jubilant FoodWorks prepares to release its quarterly financials on Wednesday, February 12, market participants are focusing on several critical factors, including revenue growth, profit margins, store expansions, and the impact of recent strategic partnerships.

Five Key Factors to Watch in Jubilant FoodWorks Q3FY25 Results

1. Revenue Growth and Operational Performance

Jubilant FoodWorks has consistently expanded its presence in both domestic and international markets. The company’s revenue performance in Q3FY25 will be closely monitored, particularly given its broad Quick Service Restaurant (QSR) portfolio, which includes:

• Domino’s Pizza in India, Nepal, and Sri Lanka
• Dunkin’ and Popeyes franchises in emerging markets
• Hong’s Kitchen, an Indo-Chinese QSR brand in India
• COFFY, a café brand operating in Turkey

In the previous quarter (Q2FY25), Jubilant reported ₹1,954.72 crore in consolidated revenue, marking significant growth from ₹1,368.63 crore in Q2FY24. A similar trajectory in Q3FY25 will reassure investors of the company’s robust growth strategy.

2. Profitability Metrics Amid Rising Costs

Despite revenue growth in recent quarters, Jubilant FoodWorks has faced challenges in maintaining profitability. The company posted a consolidated net profit of ₹66.53 crore in Q2FY25, down from ₹97.2 crore in the corresponding quarter last fiscal year.

The drop in profitability was attributed to rising input costs, increased operational expenses, and intensified market competition. Investors will look for signs of margin recovery or further contraction in the Q3FY25 results.

3. Impact of Store Expansion and International Operations

Jubilant’s aggressive store expansion strategy remains a focal point for analysts. As of Q2FY25, the company operated 3,130 stores across six markets: India, Turkey, Bangladesh, Sri Lanka, Azerbaijan, and Georgia. In India alone, 51 new stores were added in Q2FY25, bringing the total to 2,199 stores.

The international business performance, particularly in Bangladesh and Turkey, will be under scrutiny. In the last quarter, revenue from Domino’s Bangladesh declined 5.3% due to temporary store closures amid challenging conditions. The reopening of these stores and their contribution to Q3FY25 revenue will be a key point of interest.

4. Strategic Partnerships: MoU with Coca-Cola India

In December 2024, Jubilant FoodWorks signed a Memorandum of Understanding (MoU) with Coca-Cola India. The agreement outlines the purchase of sparkling beverages and other products from The Coca-Cola Company’s authorized bottlers, along with joint marketing activities.

This strategic partnership is expected to enhance Jubilant’s beverage offerings across its outlets, potentially boosting average transaction values and contributing to revenue growth in Q3FY25 and beyond. Analysts will be keen to see how this partnership begins to influence financial performance.

5. Share Price Performance and Market Sentiment

Despite the recent dip, Jubilant FoodWorks’ stock has delivered solid returns over the past year. The share price has rallied 39% in the last 12 months and 1.6% in the past six months. However, the 3% drop ahead of the Q3FY25 results reflects market caution, with investors waiting to assess whether the company can maintain its growth momentum amid macroeconomic pressures.

Jubilant FoodWorks Q2FY25 Recap: Setting the Stage for Q3

To provide context for the upcoming results, here’s a quick overview of Jubilant FoodWorks’ Q2FY25 performance:

While revenue growth remained strong, declining profits raised concerns about rising costs and market competition, setting the stage for critical assessments in Q3FY25.

Outlook for Q3FY25: What Are Analysts Predicting?

Market analysts expect marginal growth in Q3FY25 revenue, driven by store expansions, improved international operations, and the initial benefits from the Coca-Cola partnership. However, profit margins may remain under pressure due to rising raw material costs, higher employee expenses, and increased marketing expenditures.

Key Analyst Insights:

• Revenue Growth: Analysts forecast 5-7% revenue growth sequentially, with significant contributions from India’s Domino’s operations and international markets.
• Profitability: Net profit may experience a slight decline or stagnate compared to the previous quarter, reflecting ongoing challenges in cost management.
• Strategic Moves: The Coca-Cola MoU and further expansion into Tier 2 and Tier 3 cities in India are expected to drive long-term growth, even if the immediate impact is minimal.

Conclusion: Will Jubilant FoodWorks Deliver in Q3FY25?

As Jubilant FoodWorks prepares to unveil its Q3FY25 results, investors and analysts will focus on key performance metrics, including revenue growth, profitability, and the success of strategic partnerships. The recent 3% dip in the company’s share price indicates market caution, but the strong performance in store expansions and the Coca-Cola partnership could serve as catalysts for future growth.

With the food service industry facing rising input costs and evolving consumer preferences, Jubilant’s ability to navigate these challenges will be crucial in determining its stock performance and market valuation moving forward.

Stay tuned for the official earnings announcement on Wednesday, February 12, for a clearer picture of Jubilant FoodWorks’ performance in Q3FY25.

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