Domino's operator Jubilant Foodworks Ltd.'s shares sank over two percent in trade on Thursday, May 15, after the quick-service restaurant (QSR) operator posted a sharp loss in its earnings show for the fourth fiscal quarter of FY2025.
Jubilant FoodWorks reported a sharp fall in its consolidated net profit, which dropped to Rs 49.3 crore in the fourth quarter of FY25, down from Rs 208.24 crore in the same period last year.
Despite the decline in profit, the company's revenue from operations rose 33.6 percent year-on-year to Rs 2,103.18 crore, compared to Rs 1,573.79 crore in Q4FY24. Total expenses for the quarter also climbed to Rs 2,044.97 crore from Rs 1,545.47 crore.
Gross margin contracted 209 bps to 74.5 percent driven by a change in the product mix and increasing salience of chicken in the portfolio; chicken operates on lower gross margin compared with the traditional pizza portfolio. EBITDA margin improved 90 bps to 11.8 percent on improving productivity.
At 11.15 am, shares of the stock were quoting Rs 679.15 on the NSE, lower by 2.1 percent compared to the previous session's closing price.
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Despite the performance, brokerages hiked their target price on the firm's stock price. Nuvama Institutional Equities said, "Jubilant Foodworks continued its strong double-digit LFL growth while sacrificing gross margin and yet improving profitability. The strong guidance on store addition for FY26 reaffirms the lever of growth."
The brokerage maintained its 'buy' rating, with an increased target price of Rs 838 per share, higher from Rs 776 apiece.
ICICI Securities said it liked the focus on absolute EBITDA growth while enhancing the value proposition, positioning Domino’s for sustained outperformance through scale and efficiency gains. The broking house increased its price target to Rs 800 per share, up from Rs 750 earlier, while keeping its 'buy' tag intact.
Key downside risks are raw material costs turning inflationary and higher than expected increase in competitive intensity, added ICICI Securities.
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