-KH News Desk (firstname.lastname@example.org)
As rising costs exceeded an increase in orders at restaurants managed by the Indian franchisee of Domino’s Pizza and coffee chain Dunkin’ Donuts, Jubilant FoodWorks Ltd. reported a 40% decline in third-quarter profit.
The company’s shares fell 8.8% to a more than eight-month low of 444.1 rupees after the findings were disclosed.
For the three months ending in October and December, the corporation reported a decrease in earnings from 1.34 billion rupees to 803.6 million rupees ($9.82 million).
A rise in Domino’s order volume drove a 10% increase in sales to 13.32 billion rupees.
According to Jubilant CEO Sameer Khetarpal, margins were squeezed as a result of historically high inflation.
The cost of cheese and vegetables climbed, which resulted in an overall expense increase for Jubilant of more than 18%.
Over the past few quarters, Jubilant’s ambitious growth into the nation’s smaller towns and cities has harmed its profit margins even more.
The company entered 16 new cities during the quarter and opened 64 restaurants in India. It also controls the franchise rights for Popeyes sites all over the continent.
India is Domino’s second-largest market after the US, where it is a delivery-first company and where a sizable portion of its top line is generated.
Analysts estimate that the American company holds a market share of more than 70% for pizza in India.
The earnings margin before interest, taxes, depreciation, and amortisation declined from 26.4% to 22% this year.
On Tuesday, competitor Westlife Foodworld Ltd. announced a 74% increase in quarterly profit. South and west India’s McDonald’s franchisees are overseen by the business.
In July of last year, Jubilant reportedly considered shifting some of its operations away from the food delivery platforms Swiggy and Zomato.