Thank you so much, [Rayo?] .

Welcome to Jubilant FoodWorks Quarter 3 FY26 earnings call for investors and analysts. We are joined today by senior members of the management team, including our Chairman, Mr.

Shyam Bhartia; our Co-Chairman, Mr. Hari Bhartia; our CEO and MD, Mr.

Sameer Khetarpal; our Turkey business CEO, Mr. Aslan Saranga; and our CFO, Ms.

Suman Hegde. We will commence with key thoughts from the Chairman, followed by remarks from CEO and MD.

After the opening remarks, the forum will be open for Q&A session. A cautionary note before we move ahead, some of the statements made on today's call would be forward-looking in nature, and the actual results could vary from such statements.

We will also host the replay and transcript of the call on the company's website under the Investor Relations section. I would now like to invite Mr.

Hari Bhartia to share his views. Over to you, sir.

Thank you, Apar. Good evening, everyone, and thank you for joining us today on our Quarter 3 FY26 earnings call.

We are happy to share that our overall performance in the third quarter of FY26 was strong, highlighted by 13.3% growth in revenue and a solid 20% rise in reported EBITDA. Our business in India maintained its double-digit year-on-year growth, and the EBITDA margin improved by 109 basis points compared to the same period last year.

Domino's India achieved positive LFL growth for the eighth quarter in a row. Popeyes also saw an impressive double-digit LFL growth, indicating strong brand acceptance and high customer repeats.

The Turkey business continued to give positive results. It gives us immense pleasure to share with you that along with strong revenue growth and PAT, the business is generating steady cash flows and over the last couple of quarters have been paying dividends to service JFL's acquisition debt obligations.

Our international business in Sri Lanka and Bangladesh also reported impressive top-line growth and improvement in bottom line. We carried on our network expansion by adding 114 stores during the quarter across brands and markets.

We now operate close to 3,600 stores, out of which approximately 2,530 stores are in India. On the menu innovation front, we are really excited with the pace of innovation and the new product positionings being offered to our customers across our brands.

The customer response to the new products over the last 12 months have been very encouraging. Going forward, we remain focused on delivering value to our customers.

This has been possible because of strong foundation that we have built with technology, supply chain, delivery capability, and most importantly, our people. Our focus behind the same will remain relentless, and these are key to our long-term success.

With that, now I invite Sameer to provide you with further insights into our Quarter 3 FY26 performance.

Thank you, Mr. Bhartia, and good evening to everyone.

Q3 FY 2026 was a proof point quarter for us. Strategy is working, our technology and investments in AI are delivering impact, and execution was rock-solid.

Q3 is our peak quarter and the ultimate stress test for the organization across operations, supply chain, technology, and other functions. Our store teams and delivery riders handled exceptionally high order volumes with speed and consistency, demonstrating operational discipline at scale.

I'm extremely proud and thankful to the team's performance. Turning to financial performance, during the quarter, we reported consolidated revenue of ₹24.4 billion, representing a growth of 13.3% year-on-year.

Importantly, all our business segments, both domestic and international, contributed to top-line growth. India revenue stood at ₹18 billion, growing at 11.8% YoY.

Domino's India delivered a like-for-like growth of 5% on a strong base of 12.5% like-for-like growth in the same quarter, which was the growth in the same quarter last year. Revenue grew 10.7% year-on-year for Domino's, driven by healthy order growth of 10%.

During the quarter, we undertook calibrated price increases on select products to strengthen margins and incentivize favorable mix movements. Our recent new product launches, including sourdough pizzas and Cheese Lava Pull-Apart, have seen an overwhelming response and have scaled rapidly in a short period.

Also, these products are accretive to gross margin. Domino's in India added approximately 200 new stores over the first 9 months of the fiscal year and 75 stores in Q3 alone.

This is the highest ever store expansion by Domino's in India in the first 9 months of the year. Popeyes continued its strong momentum, delivering high double-digit LFL growth for the second consecutive quarter.

We rolled out the range of seven Flavor Burst burgers. We topped it up with a 15-piece chicken bucket that has also received an excellent response.

Popeyes store expansion expanded to 73 stores, adding five stores in the quarter. We are now increasingly confident about Popeyes emerging as a powerful new growth vector for the company.

There are handsome gains on the margin front. Gross margin in India business delivered a sequential expansion of 52 basis points to 74.9%, translating into an 80 basis point improvement over last 6 months.

The improvement has been achieved despite persistent inflation in dairy, oil, and flour. Supported by gross margin expansion and productivity-led efficiencies, reported EBITDA margins improved by 110 basis points year-on-year to 20.5%.

On a pre-Ind AS basis, EBITDA margin expanded by around 90 basis points year-on-year and 120 basis points sequentially. Our technology and AI initiatives continue to translate into tangible outcomes.

Monthly transacting users on our apps grew over 20% year-on-year in each quarter of FY 2026, and the number of active clients using post-order page advertising crossed 10 in the quarter. Standalone profit after tax from continuing operations before exceptional items grew 27% year-on-year, and PAT margin expanded by 54 basis points.

Turning to our international business, Turkey continued to deliver ahead of our plans. The business has consistently delivered double-digit year-on-year growth while maintaining strong PAT margins.

We are pleased to share that Turkey is now servicing its acquisition-related debt entirely through internal cash flows. During the quarter, the business added 33 new stores, including 15 Domino's and 18 COFFY stores.

Sri Lanka and Bangladesh also delivered high double-digit growth during the quarter, and both countries have positive growth and margin expansion trajectory. On a consolidated basis, EBITDA grew 20% year-on-year, with EBITDA margin expanding by 110 basis points.

Consolidated PAT from continuing operations before exceptional items grew 94%, with PAT margin expanding 167 basis points year-on-year. In summary, Q3 FY 2026 delivered strong growth across brands, disciplined execution, and expanding profitability.

Our growth vectors are clear, our execution strategy is working, and we are deploying capital with discipline while investing ahead to build a large 5,000-plus store business. We are confident that our continued investments in technology, supply chain, and store expansion will drive durable, long-term value for shareholders.

I now request the moderator to commence the Q&A session.

Hi. Good evening, Sameer and team.

Two questions from my side. First, on the LFL number of 5%, what is your outlook because there was a bit of a festive season shift in this quarter?

Where do you see this number, let's say, through the course of 2026, because in your opening remarks you also mentioned about the base and that is going to stay stiff for rest of the year this calendar? How should we think about this?

I think Vivek, see, the way we are building and shaping the entire standalone business is the following. Domino's should grow at 5% to 7% like-for-like growth.

Overall top line should grow for standalone around 15%, and we should get to closer to 15% pre-Ind AS margin, right? Now, that kind of how the math stacks up for me.

That's what we are internally always gunning for. Therefore, to answer your question, I don't see any headwinds in terms of building a 5% to 7% like-for-like growth business.

Interesting. You do not think that this slips further down as we go forward through the course of the year, because there has been this fear that now that the base is reasonably high, this will actually keep slipping down as we go forward?

I think if you look at, see, the the I think just to remind all the analysts and investors, we are now lapping in March we will complete 2 years of free delivery, right? I think just want to clear that notion.

We already lapped up high basis. If you look at FY 2025, standalone basis, we grew 14.3%.

That's when we started the free delivery. In the current year, 9-month growth rate is 15.1%.

We're already growing on a large base, higher than the previous year. I am less worried on on on that particular piece.

I think our our businesses continue to do well. In fact, the internally we have started tracking through AC Nielsen market share gains, right?

Our market share we also gained market share, not only within pizza, but across the relevant segment from from bowls to to chicken to to to burgers. I think there is huge headroom to grow.

One quarter here and there, I will skip that, but but overall 5% to 7%, I don't see that there is there is a challenge, and our business is geared for that.

Got it, Sameer. Second question is on if you go back in the history as well as the conventional wisdom will say that as LFL accelerates, margins typically expand and reverses has also been true in the past.

This time around, obviously, with the decelerating LFL, your margins expanded quite smartly. Can you just give your views on anything related to the quarter, we can, of course, see the numbers, and how do you think about the outlook particularly for FY27, yeah?

I think I'll let Suman give any additional color, but it's important to note that I think this was a constant question that, "Hey, you are having a LFL of 10% to 12%, and margins are not rising," right? We were investing for growth.

We got the customer. We know customers repeat once we acquire them, and there is always an opportunity to take calibrated price increases, but equally work on the efficiency.

We worked on both the fronts. If you recall, when we did free delivery, we launched Big Big Pizza next year, and as a result, both were dilutive.

This year, we've come back and launched Cheese Lava Pull-Apart, sourdough pizza, we've taken calibrated price increases, we have put in more levers to improve our gross margin and tightened our cost structures to get more juice from our EBITDA. I think I am actually less worried on margins, Vivek.

There is always more room that I see in my organization. Growth is something that we have to always be paranoid about, because we are building a 5,000-store network business and not just a 3,000-store network business.

Suman, any color on this here? I think we are on track.

No, I think we are on track, and Vivek, Sameer has answered the question, but if you look at it also in terms of the basis, right? One, of course, the constant conversation that should happen on gross margin, if you see over the last couple of quarters sequentially, and we had said that out in the markets as well, right, that there were investments made in FY25 behind the product portfolio to ensure that we give back value to customers.

As we bring in new mixes on our innovation, we will see the accretiveness of those mixes playing out, which is happening in case of the new launches we've had in terms of sourdough or be it the Cheese Lava pull-out that has now got launched. That is of course reflecting in a margin improvement at a gross margin level.

Then if you look at the other expenses while they have grown, right, if you look at personal expenses or manufacturing, they are, however, growing behind the growth that the business is seeing. The business is seeing about 12% growth approximately.

The other expenses are not growing in tandem with that, which is the way it should be. We still believe there's more optimization we can do.

All in all, that's how the margin profile is playing out, operating leverage of course kicking in and the gross margin improvement profile that we're driving, which we believe will sustain going forward as well with the kind of growth aspirations that we have and which Sameer has called out.

Got it. Thank you on that.

If I can add one more, which is, when we look at let's say the two food delivery platforms, Swiggy as well as Zomato, both of them have quick commerce investments and both of them in some ways are using food delivery as a so to speak cash cow business. They have introduced platform fees, hike delivery fees.

How do you benchmark yourself? Do you take a clue from what they are doing and therefore you plan your strategies?

What are your thoughts on your own delivery fees one way or the other? Can you just elaborate on that?

I think let's look at our strategic objectives, right? We want our own assets to grow the fastest, be the channel where we really get the customer love, and the most immersive and financially the best reason for customers to shop.

These tenets will continue to guide our investments and our pricing decisions for customers, right? I do agree that in the last quarter or so, aggregators have brought down their minimum order value to ₹99, and in some places, we had to go back and correct and match that, right, to not lose market share.

We've done that. See, they are a platform, and therefore they can charge a platform fees or platform commission, etc.

We're in the business of selling, shopping, and giving an outstanding experience of pizzas. For us, at least my own take is the things like platform fees, etc., are not relevant.

Having said that, that's an option that exists, and if need be, we can again switch on that button at midnight tomorrow, and it will be available on. That lever stays for us.

I want to remind everyone that we are building a 5,000-store business that is most penetrated, and I believe these are actually barriers to acquiring customers.

Got it, Sameer. Always like and respect your focus on growth.

Thank you, and wishing you and your team all the best.

Thank you, Vivek.

Hi, team. Good performance.

Just a couple of clarifications. The first one, I know that it was discussed in the past as well, but request for a refresh view if you may, which is essentially the continuing growth divergence between dine-in and delivery.

Now the context which, Sameer, I just want some more color maybe in this call would be let's say, what percentage of let's say consumers overlap between delivery and dining? What I mean is that an either/or or is there an addition?

The quick reason why I'm asking is because while you're outperforming overall and delivery continues to grow, and so it's more than [unclear]

Hello? Hello.

Sorry, Manoj, the voice is actually cracking up and breaking. We're missing a few words in between.

Is it better now? I'm just very close to the mic.

Breaking up.

can't I'll just give one try and I'll come from another connection.

Yes, please.

Okay. No, the question team is actually on the growth divergence between dining and delivery.

Yes, good evening, Sameer, and congratulations on the performance. I had three questions.

Just starting off again on the margin bit. On the gross margin side, you mentioned about obviously that marginal price hikes along with new product launches that were obviously one of the key drivers of gross margin improvement.

Just moving below, what have been the incremental levers which has led to an operating leverage? We see that employee expenses have also gone down.

Does the labor code in any way rehash our employee expense growth going forward? That was the first question.

I think on gross margin, no more flavor to add on that, Nihal. Like we mentioned, predominantly driven by mix improvement that we have seen, led by further efficiencies that we've brought in.

We have again recalibrated our pricing to look at where we can get the most value without, of course, impacting growth in any way. That's really driven the gross margin trajectory, which we believe will also go on as we get into the future.

On operating leverage on personal expenses, honestly, if you look at increments and what the numbers are, that's the kind of increase you would see. I think nothing out of the ordinary out there.

From a labor code impact perspective, we have taken of course the one-time exception. Going forward, yes, there will be some impact that will come into the cost lines.

We anticipate as of now, while there's no definitiveness on it because everybody is looking at restructuring their wages and what will the definitions actually roll out when the implementation happens in April, but maybe about 15 10 to 15 bps is the impact that we see at an overall level, yeah, at an outer limit. We of course continue to look at op.

Nothing material that I want to call out.

Also, if you see, we've been very disciplined in headcount increase. We've also deployed technology and AI, we're beginning to use to drive efficiencies in our corporate G&A, and that has given the leverage.

I think we've been super disciplined in the last 2 years in where to deploy the technology so that that leverage is coming in.

Got that. Sameer, the second question is, you mentioned for the first time about this AC Nielsen data and also tracking the growth for Domino's versus other categories like, say, burgers.

Now just one question that how do you in a way fight the lethargy that may come with the category of pizza itself, and how do you sort of compete with other categories, whereas you are a single-category brand and you're sort of competing with aggregators? What is the insights or incremental steps that you are taking to sort of gain market share from the other categories knowing the fact that you only work in one subcategory?

No, I think and that is the fundamental job, right, with almost nearly two-third of the market share in the category, right? The job for us is to grow penetration.

Nihal, it is actually not pizza versus burgers or chicken. India is a $60 billion food services market.

Our competition is bhatura chana, dosa, idli, biryani. That is what India consumes.

The frequency of pizza is three in a year, and burger will be probably the same. The idea is to not bring burger from three to two and pizza from three to four, but the idea is to out of 200 occasions that Indian is consuming Indian food, get one additional share of pizza.

That is the job to be done. Therefore, you will see on the premium end, we are launching sourdough pizza, because there are premium users who are doing it.

On the lower end, we have a ₹49, ₹59, ₹69, ₹79 pizza that competes with idli and dosa that India consumes every day. That is our endeavor, and that is the task for our marketing team to come out with products that actually replaces, whether it's a Gen Z, chahe woh chhoti bhookh hai, where a samosa comes in, bring pizza into the mix.

Got that. Just quick final question, Suman.

If you could give the capex number you're targeting for this year and the years ahead, given that you said you're optimizing on supply chain and already done with that?

I think this question comes up all the time, Nihal, but the fact is supply chain, I think I mentioned the last quarter's call as well, our overall capex spends in the last couple of years have been in the range of anywhere between ₹700 to ₹850 crores. Yes, the supply chain capexes have peaked, but we do not expect a significant movement downwards on the capex build because we are, of course, recalibrating.

We've called out saying we want to open 1,000 stores in the next 3 years, right, which does mean that the store capexes will kick in. We continue to invest heavily behind technology because we do believe that that will not only drive growth, but also efficiencies for the business from the cost and margin profile perspective.

These will have, of course, faster paybacks and ROI compared to a supply chain investment, we should see the return on capital employed on this going up, but not a significant movement on the overall capex spends. Of course, as we close the year in the final quarter as we always do, we'll give a rough guidance on what we believe our capex budget for the subsequent financial year will be.

Got it. Thank you so much.

Thank you. Sameer, the first question was on that LFL.

If I look at the last eight quarters' performance, the positive LFL was coming predominantly because of all the strategic intervention you have taken in terms of product innovation, free delivery, etc. Now if I look at this quarter call commentary by other QSR players, there seems to be some uptick in demand.

We don't know whether that flows through or not, but there is definitely some uptick in demand. In that context, and I think in one of the earnings call, you called out that as well that if the industry growth start to improve, there will be an upside risk.

Looking ahead, do you see that if the industry starts to improve or start to see positive SSG overall, there is a upside risk to this 5% to 7% LFL which we have discussed?

I think, of course, see, that's why we have a 5% to 7%, and I think the government has done a lot on consumption. I don't have a market view.

I can talk about what we are doing, right? We are penetrating into schools, colleges, airports, railway stations at a pace that we have never done before.

We are opening stores with very high quality throughput in year one with a lower capex. There is a lot of work that has gone into it.

Our site selection is totally AI enabled now, and we have a list of 1,000 stores. I do see that the brand is very strong.

Our mature store ADS has been the highest ever in the last quarter, and we are very confident about our growth strategy whether coming from both LFL and also organic expansion in white spaces. That doesn't worry me.

India is a very large opportunity and a multi-decadeal opportunity, and we're finding large pockets of growth.

Sorry, Sameer. Maybe I'm just going to harp on this one.

See, last quarter let's assume if the industry wide, listed player wise, if the SSG was -3%, -4%, and you have still delivered 5% LFL, if hypothetically you see, industry, QSR space starts to grow at, say, 2%, 3% SSG, do you see, this instead of 5% to 7%, this goes maybe to 8%, 9%?

It should happen. I think empirically I would agree with you, right?

That we always outperformed in the last eight or nine quarters, if you see. In fact, even before that, and I've always been gone on record and say we should be because of our execution ability, self-help initiatives, and the confidence in the brand, we should always be +3%, 4% versus the rest of the pack.

I say it with all humility because the brand is that powerful.

Sure, Sameer. Thank you.

The next question was on Popeyes. We have seen store growth slightly slower, but definitely SSG being very strong in the last two quarters.

How should we think about Popeyes over the next 18 months in terms of both store expansion and also if you can throw some color in terms of gross margin as well as on store level EBITDA margins, how it is trending now?

Firstly, the SSG for Popeyes has been positive double-digit for three quarters in a row, right, and the last quarter being the highest ever, right, and very strong growth numbers that I see. As a result, we are far more confident about Popeyes being able to scale and be the real speedboat for growth in our portfolio.

Right, that's kind of overarching. Therefore, coming back to your question, what are we at a 5,000 feet optimizing for?

At a 5,000 feet, we are optimizing for average daily sales that is equal to industry and gross margins that are at industry. Once we do that, then we know that the model really works.

There is customer adoption at a price that we are willing to command in the market as a challenger brand. Second is we are able to bring the sourcing capabilities and technology of Jubilant to have the right gross margin.

Once we do that, then we know how to open 300 stores in India. Right?

That's kind of the equation over here. We have one or two pieces to crack, right, but I would say bulk of work, 70% to 80%, has been done.

We've seen highest ever ADSes in the last quarter, gross margins have improved, restaurant profitability has improved, and we are well on track. In about 100 stores, we will start disclosing the numbers to all of you, and then we can scale faster from there.

At no point, I want to make this as a land grab, right, where we are opening stores and then we have to shut down 1 year later. Very confident about this.

We'll stay invested in this piece. In fact, in Bangalore this quarter, we launched our first advertising campaign even just with 70 stores.

No other QSR has done it with a celebrity film star as our lead anchor over there.

Sameer, Sameer. Just last question to Suman was on the Turkey part of the business, if you can share how much of the total dividend has been paid by DP Eurasia and also what is the total debt outstanding pertaining to the acquisition?

The debt we took on account of the acquisition is about €110 million in our Netherlands entity, Ashish. That, of course, the repayment schedule has not come up.

We will look at what we do with that repayment. Most likely, of course, the way Turkey is generating cash flows, we will look at funding some of that also from the Turkey cash flows.

Having said that, and hence right now the obligation on debt are only with respect to the interest. 100% of the interest obligations are being paid by the Turkey business now since the last three quarters.

There's no remittance of funds or cash flow from the India business on account of the acquisition debt that sits in Netherlands.

Sure. Got it.

Thank you and all the best.

Thank you.

Thank you.

Hi team, I have one question or a clarification, which is essentially a request for a refresh of something which would have been discussed in the past. Essentially the growth divergence between dine-in and delivery, delivery brilliant performance continues to grow double digits comfortably for a long time.

You had done some interventions in the past to get the dine-in throughput. If you just talk about where we are in the dine-in, let's say rejuvenation journey, you had done some product, pricing, actions, etc.

That's one. One subplot which I just want to understand here is, in your experience and your opinion, is this unique consumers?

What I mean is that, if a consumer is buying in, let's say if there is a dine-in shop nearby, is a propensity to go and dine out, or is it just an impulse consumer or capturing that? Is it an either/or situation, or both are separate consumers?

Thank you. No, I think great question, Manoj.

I think your analysis is right that delivery continues to power ahead our growth, and dine-in and takeaway as two additional channels, we've put in a lot of intervention. It has not played out, and that's a fair and accurate representation of our performance.

Having said that, firstly we'll continue to fuel delivery tailwinds. That's world over.

That is the fastest channel growing, and we believe we have very strong capabilities over there to delight our customers. Now coming to dine-in takeaway, we are going back to the drawing board, relooking at our strategy, what is working, what is not.

Few pieces are working. Last quarter, I generally believe we should have done slightly better, but I will not give any excuses.

We'll come back and fight hard for that piece of the pie. Coming to what's happening on the new customers, right?

Pre-COVID, the largest acquisition channel for us for new customers was dine-in, and those customers moved to delivery. Post-COVID and more recently, because all the investments in app, 20-minute delivery, free delivery, the largest new customer acquisition channel actually is our own app, and dine-in takeaway is lesser.

Therefore, in both in terms of absolute and percentage growth, our own asset is the largest and the fastest growing channel. Which augurs well for us.

That's what we want. We have a lot of customer data.

Now for dine-in and takeaway, when we acquire customers, they actually after the first purchase, they move to our online channels. They know that this is a very convenient channel, and therefore the question that we have to solve for is to build a strong dine-in and takeaway proposition, which is very differentiated and compels the customer to go to the nearby store, which is the most penetrated and the easiest to access in terms of restore reach, to go and do a dine-in or a takeaway along with certain occasions.

That piece we are fully on Manoj, and we believe there is some work to be done. We'll get it.

We're not leaving that problem. Thank you.

Thank you, Sameer and team. Good luck.

Thanks.

Hi, Sameer. Just two bits.

First is let's say, can you help me understand how much of let's say the delivery orders would be happening through our app broadly, and now this monetization of the ad page on our platform or the app? How big can this be, because if you look at from a MAU perspective, your numbers are significantly high.

Let's say how should one think of this two variables? One is, your delivered from your app versus aggregators today versus let's say if you can help me understand 12, 18, 24 months back, some bit which you alluded earlier, and the second bit on this ad bit.

Thanks.

Okay. No, very good.

I think we don't disclose our share of our own channels versus the aggregators. It does not.

I think what we control and we want to grow is our own channels. I think that continues to grow.

I think the momentum is strong and the share is very strong. That's one.

The second piece, we started this journey a quarter ago. In fact, this is exactly 4 months ago we started our first right after Diwali.

We actually got into this, and we were experimenting with this particular piece. We are very positively surprised by the engagement and the quality of brands that we've been able to get from Flipkart Minutes to Tata Neu to Amazon Fresh to Apple, right, and there is a lot of interest from this, because again we have built a very strong tech foundation where we can target by a zip code in India, give more analytics back to the customer.

If you really see if our average frequency is three, right, in a year, then willy-nilly you are getting eyeballs of a product to a new user. Like you said, 15, 16 million monthly active users is a very large consumer base.

At least my own take is at the right time, I'm not saying in short-term, we should get about 1% of our revenues on that channel. We should be able to monetize to that extent.

Having said that, we have taken a conscious call to not monetize pre-order or the pre-order journey. Only post-order we are monetizing it.

If you open up more assets, there is more revenue to be earned, but at the moment we are focused only on post-order journey. We want to give a immersive and a friction-free shopping experience and a fast delivery to customers.

Once they are on that page, we are actually experimenting a lot. Take for example, if I get a credit card application, you get an immediate discount on that order funded by the credit card company.

Some of these things, we believe we are the only one who can use it, configure it by zip code and target a customer cohort Apple can target Android customers and Android can target Apple customers. Some of those things are very unique to us, and we will scale that up.

It's an important area we know. All of this flows into the bottom line.

Sameer, sorry. Just if I hear you right, you said 1% of online sales from our platforms will be able to earn, let's say, maybe some period down the line.

Is that the right understanding first?

That's right. I think my own sense is 1% is minimum we should get to.

Sameer, actually I'm just trying to understand this number, because let's say when you look at another BPC player which has annual subscribers equal to your monthly subscribers, their ad revenues in my understanding are north of ₹500 crores, annual number. I'm just trying to

That's not a right comparison. Because there the brands advertise

revenue. I'm just trying to think, I'm just trying to speak aloud.

Maybe 2, 3, 4 years down the line, can this not be a three-digit crore number? Thanks.

No, we'll get closer to that, right? That's what we aspire to get, but the only difference, and I have run these businesses a lot, right?

In a grocery, 8% to 9% of your revenue can come from advertising, right, because let's say there is a noodle brand, that noodle brand is advertising on the brand, and the click-through of that can directly lead into sales. It is like modern retail where brands will do display advertising.

We're different, right? We can't other than Coca-Cola, we can't advertise anything where customers can click and get that instantaneously.

Same thing in a BPC kind of a play, L'Oreal or Lakme or anybody will advertise up front to drive the sale. It's the pre-order journey that they try to intercept.

We are doing post-order. There is more money, for sure, but we don't want to hurt the customer journey of ordering a pizza in three to four clicks and deliver that in 20 minutes.

That remains sacrosanct. Everything else we will try.

On post-order page, we are very confident. In fullness of time, it can get to three-digit or close to that.

That's what we're also aspiring for.

Got it. Thank you.

Hi. Good evening, and thank you for taking my questions, Sameer.

My question is on the margins side. See, my sense is that if I look at the margin expansion in pre-Ind AS, which seems very impressive and so it's a great job done, but can I sort of double-click on a bit and ask whether rental saving is now part of the equation, which seems structural, because now I think delivery is larger part of the pie.

Is there some ongoing rethinking of the store happening and rental as a percentage is declining, because I note that in the first half of this year, lease expenses from the cash flow, which I would say rental, is 7%. Last year that number was 7.4%.

Is there a consistent saving now as part of the equation, and

how sustainable that is, and what the number could be? That is point number one.

On a related point, my second question would be on Popeyes, whether, in 15% growth ambition at standalone level, how much this would be contributed by Popeyes over the next 3, 4 years, and how much margin at EBITDA level would be contributed by Popeyes as well, because I think if the journey of that is also increasing, how one should think about that, these two pieces together?

Let me take the first one on rentals, Amit, and then I'll give Sameer question on growth and then come back on Popeyes margins. I think on rental, you're absolutely right.

I think you answered the question yourself. Yes, we are seeing leverage coming through on rental.

Part of it coming through on account of, of course, scale, delivering more revenue. Of course a better LFL gives us the scale operating leverage flowing through in rental, which we have seen coming through in our pre-Ind AS numbers.

Apart from that, other opportunities we are looking at. Our rent per square footage of our stores is on a downward trend.

Again, like you rightly said, if you're hitting a 75% delivery mix now as a business, it could vary between the tiers of cities we operate in, but overall the square footage of our stores is coming down, which will again be an additional fillip to our rental line, right, going forward. I think those are the two elements that we're also very focused on.

Of course, also on renegotiation. In many of the new cities and towns that we're going into, we are anchor volumes for the landlords, we do get better deals as we enter in there because it helps them get in more other businesses as well.

All of these three metrics will continue focusing on. Will there be a very big increase on the leverage coming through on rentals?

I don't think it's significant. Even now, it is not a significant part of that 90 bps of improvement that we are seeing.

It's not like it is 60% of that comes from rentals, right? It is a component, but not a huge one, which will continue to be there.

That's on the rental part if it answers your question. Maybe Sameer can take the Popeyes growth piece, and I'll come back on EBITDA.

I think the Popeyes, Amit, should add 1%, 1.5% to growth, right? That's how we are building this, right, at least in the near term.

If we see more green shoots, we can actually accelerate the store expansion, right? What are the green shoots, right?

The green shoot is we should be industry leading or industry par on the average daily sales, and the gross margin should be equal or higher. Right?

If these two things happen, then we know other line items can take, and I think if Domino's is adding 75, 80 stores a quarter, there is no reason why we can't add 15, 20 stores of Popeyes in a quarter, right? Most of those locations will be high street locations.

That's where, because there is so many malls or airports that you can get into. That piece is remaining, and therefore, this should make money.

Having said that, even at scale, right, even if you look at the fried chicken players, their margins are lower than that of Domino's. Even in the fullness, it will be a drag in terms of mix, but right now I think we are far away from that.

We want to make sure that we are getting closer to profitability at a restaurant level, we make money at the EBITDA level, and then start generating more cash from that business. That's how we are operating.

Amit, very positive story in terms of what the team has been able to do, differentiate in terms of bring a freshness of that in the QSR, which is with a brand like Popeyes. Great, Sameer.

Thanks so much for that. If you don't mind, is there a rough ADS that you can share if possible, in say Bangalore, if not in all, but a typical ADS that store is getting which you are satisfied with?

Obviously there will be a range, and I don't want to ask too much of details that is not shared, but how do we make sense of how ADS is evolving for this? Although the SSG looks very strong, but in terms of ADS how it is kind of range could be?

Give us Give us Give us 4 months. We'll 4 months we will we will come back to you, Amit, on that one.

We're very close. Let's get to 100 stores, we'll disclose everything.

Like I said, the our goal is to to be at or market-beating ADSes and gross margin, right? We are on that trajectory to be very honest, and and and many of our stores are actually operating much more more than that.

I I assure you that our our rates are positive, we are growing in terms of ADSes, SSG, and and the underlying restaurant profitability, all three ticks for it. We want to expand faster, provided the location is right.

That's our intent.

Got it. No, thanks so much.

Last, this last bit if I may squeeze in. Suman, this question is for you.

I remember discussing when the company level pre-Ind AS margin standalone was 12%, we were talking about EBITDA margin for Domino's at 14.5% level. Now we are reaching 13.3%.

I assume this largely driven by Domino's given the dominance of the format. What could be the margin for Domino's like-for-like, which was 14.5%?

What could be the sustainable margin that you're looking at, assuming 15% is achievable? How one should think about Domino's margin on a basically sustainable basis?

Amit, I think we've said that we will disclose Domino's margins once a year. We do know the numbers of Domino's of FY24.

We also disclosed in FY25, which is around the 14.5% range that you only spoke about, right? Let us wait a quarter, and we'll give the full year margins out again on Domino's.

I don't want to comment on it right now, because you can't actually compare a 13.3%. We know how Quarter 3 is for our industry.

Quarter 3 margins are always higher, correct, than the rest of the And you see that moderation in Q4. I think it's better to compare it at a full year level.

Now coming to how should you look at it, I think our guidance has been consistent saying that FY24 margins above that we want to improve by about 200 bps at an EBITDA level as a company. A significant part of that will of course come from Domino's margins improving and the reduction of the drag on the EBUs.

At the point in time that we had disclosed our numbers, the drag of Popeyes, Dunkin', and Hong's was approximately about 230, 250 bps, and we should see that halving in that journey to getting to the overall JFL margins up. I think that's the way you should triangulate it.

Of course, you'll be able to do a better guess of it as we come out with our full year numbers in the subsequent quarter. Yeah?

Got it. Just to clarify, it is 200 above FY24, right?

That's what you said.

Yes.

Got it. Thanks so much, Sameer.

Thanks, Suman. Thanks for taking my question.

Thank you,

Amit. Thank you.

Hi. Thanks for the opportunity.

A couple of questions. Firstly on Popeyes, now that you've seen sort of steady and strong performance, from when would you report this as a separate segment?

Will we start getting data on this in terms of ADS and SSG and even the revenues separately?

I think by end of like the Q1, we should I think we want to get to 100 stores. That's what we had committed earlier, right?

As soon as we get it, I would have anticipated to to happen for that to happen in Q4. It will not happen in Q4.

It'll happen may happen by Q1. That's where we should start reporting the numbers.

Understand. Thanks.

Then just the journey of Popeyes, that we've seen since you've launched it to where we are now, what has led to sort of this significant improvement in SSG? Do you think that the model now is at a point where the current model is the one that you sort of roll out across the country overall?

No, I think we've differentiated from the competitions. I think if you just step back, we're 3, 3.5-year-old brand, right, will still be probably the fastest, if not the fastest, to get to 100 stores.

When we started, there was a playbook that the brand had guidelines, right? You were not meant to follow it strictly, but still when you're bringing the brand, you have no knowledge, and you are therefore trying to deploy a playbook that works everywhere: 4 to 5,000 square feet stores, large flagship high street stores, right, with very heavy capex in the kitchen, large area for the kitchen, and a menu that we do not know will work for India or not.

Right? Take for example, biscuit is a very popular product in US, but that's not a biscuit that what you and I understand, right?

It's kind of a cornbread or a bread which is So we got in all those equipment and assuming that this is how the brand works. We corrected.

We also built our supply chain capabilities to source fresh chicken, to invest in and never ever antibiotics used chicken. We did all of that, and we also equally at the front end started to differentiate versus consumers.

Popeyes world over stand for its boldness and flavors. The Cajun flavor resonates more with Indian, and we brought more flavors to India.

To give you two examples, we looked at chicken wings and brought six variants of chicken wings with six different sauces indicating heat, etc., and taste. Similarly, we launched seven chicken sandwiches, which are Flavor Burst.

I think we are taking the route where we believe this can be the most loved chicken brand in India, and I generally see that this to be a 250-store, ₹1,000 crore business in medium term and with very high profitability, and that's what we are building. That's how we are shaping the business towards.

We are 1/10th. We are getting closer to 1/10th of that journey.

We have to continuously innovate, right? What worked last year, for sure, will not work next year.

Understand. Thank you so much for that comprehensive response.

Maybe just a follow-up on this, would it at some point make sense to have a sort of common app across your platforms, just given the strength of the numbers with sort of MAUs and MTUs, particularly for Domino's? Could you is there a way you can also shift that to Popeyes and the other brand?

No, I think I have looked at these models very closely, and I also launched one of the food aggregator businesses in India 5 years ago. You need a certain threshold of brands for an app to work, right, and that threshold, in my opinion, is 20 to 25 brands per zip code, right?

Anything below that, a single app doesn't work. Just because we are Jubilant, customer will not open an app, right?

There are multiple models, as you see. There are dark kitchen models with seven, eight brands.

Or even more. Even their own app traffic is very limited, right?

They've not been able to grow that for very simple reasons. Customers inadvertently want more selection, and they may still choose Domino's among that 40, 50 brands that they're browsing, but there is innate need to have more.

At least my past experience and knowledge suggest that this is not a good investment of technology. The two brands are different, occasions are different.

We've launched Popeyes' own app. It is going to be the most immersive app for burger eating and chicken eating in the world.

That much I promise you. Once customers like that, we can gate prices.

Again, like the pizza box never leaves our hand, the bun never leaves our hand. We've followed that same approach in Popeyes, and we're building the business with the right fundamentals and aspiring for a lot of customer love.

Hi. Thanks for the opportunity.

Very quick bookkeeping questions. Are you expecting any upward revision or downward revision in your royalty expense?

I vaguely remember that your franchise agreement with Domino's was due for renewal, but I don't know if it's already done. Do you have visibility in terms of next 5 years, 10 years what your royalty for Domino's would be?

I think we are not expecting any upward or downward movements. We believe we have very good rate.

We have outstanding relationships. We are all good over there.

Understood. Thank you so much.

Thank you, Jay.

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