Ladies and gentlemen, good day and welcome to the Jubilant FoodWorks Limited Q3 and 9M FY '25 Conference Call. As a reminder, all participant lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing "*" and then "0" on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Lakshya Sharma. Thank you and over to you, sir.
Thank you so much, Father. Welcome to Jubilant FoodWorks Q4 and FY2025 earnings call for investors and analysts. We are joined today by senior members of the management team, including our Chairman, Mr. Shyam S. Bharatia, our Co-Chairman, Mr. Hari S. Bharatia, our CEO and MD, Mr. Sameer Khetarpal, our CEO of Turkey Business, Mr. Aslan Saranga, our CFO, Ms. Suman Hegde. We will commence with key thoughts from our Co-Chairman and turn to our CEO and MD to share his perspective. After the opening remarks from the management, the forum will be open to question and answer session. A cautionary note: some of the statements made on today's call could be forward-looking in nature, and the actual results could vary from the statement. We will also share 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 S. Bharatia to share his view with you. Over to you, sir.
Thank you, Lakshya. Good evening, everyone, and welcome to our earnings call. FY2025 has been a landmark year for our company, and the H2 performance has helped us set new benchmarks. We achieved significant growth and increased our market share. The group system sales reached almost $1.1 billion, with almost one store opening every day in FY2025, and the group network now has over 3,300 stores. Reflecting on the year gone by, we took decisive action this year, making strategic investment that has supported faster growth. We took the bold step of implementing free delivery, a move that has reshaped the competitive landscape. Simultaneously, we ramped our regional office and commissary infrastructure to support our ambitious growth plans. These strategic moves have helped us in accelerating growth in FY2025 and will continue to do so in the coming quarters.
While the initial impact of free delivery led to a reduction of our average ticket price, we successfully absorbed this impact, and we are now seeing the ticket price grow upwards again. This has led to a record high new customer acquisition, which we know compounds over the next couple of years in increased sales. Importantly, despite the increase in our delivery mix, we managed to increase Domino's India EBITDA broadly in line with revenue growth, holding firm our margins. We are also committed to find ways to expand margins in the coming quarters. Furthermore, we have accelerated our pace of new product innovation, introducing exciting new offerings that resonate with our customers and drive incremental demand. We have also maintained our aggressive pace of network expansion, bringing the Domino's experience to even more customers across the country.
These strategic moves are not just about short-term gains. They are about solidifying our leadership position and creating avenues for continued network expansion. The acquisition of BP Eurasia has also now completed a year through record high system sales, healthy profitability, and high free cash flow generation from Turkey. We are able to bring down their local debt, and starting H2 FY2026, we will now start funding interest cost along with reduction in acquisition debt. I want to take this opportunity to congratulate Sameer and the entire Jubilant FoodWorks team. They have risen to the challenge, embraced change, and delivered an exceptional performance. I would also like to thank the leadership team of our brand partners, Domino's International, RVI, and Inspire Brands for their constant guidance and support.
Also, our aggregators, partners, our vendors, our service providers, and the communities around all our facilities for their support in making JFL the largest QSR in the country. I must also thank you, our investors, for your guidance and feedback to fine-tune our strategy. Most importantly, I would like to thank our customers, the reason for our existence, who constantly inspire us to do better and keep us honest. Now, I'd like to invite our Managing Director and CEO, Sameer Khetarpal, to provide a more detailed review of our performance for the quarter.
Thank you, Mr. Bhartia, and good evening, everyone. Q4 Financial Year 2025 was another exceptional quarter for Jubilant FoodWorks, building upon the momentum of a truly remarkable year. As Mr. Bhartia highlighted, our strategic decisions, i.e., relentless focus on execution through faster delivery, providing great value to customers through free delivery and offers like flat menu, material improvement in the pace of menu innovation, and embedding a culture of care and performance. This has propelled JFL to lead the industry both in terms of growth and profitability. FY25 was a year of turnaround for JFL. Despite demand headwinds, we continue to execute better through self-help initiatives. Key highlights include expanding our group network to 3,316 stores. The Domino's network now stands at 3,031 stores across all geographies, with a net addition of 238 stores in the year.
This expansion is a testament to our confidence in the long-term potential of the food service markets that we operate in, as well as our ability to execute against macroeconomic challenges in the short term. Strong revenue growth in the wake of a tougher consumer demand environment, consolidated revenue reached Rs 8,142 crore in the financial year. Standalone revenue grew to Rs 6,105 crore, an increase of 14.3%. Domino's India revenue growth was at 13.4%, powered by strong 7.5% like-for-like growth in the year. In Popeyes, we continue to build greater traction across cities as ADS is improving quarter on quarter, and we are nearing lifetime highs. We also plan to share more details going forward around Popeyes' incoming quarter. We believe that Popeyes India playbook, based on differentiated products, own digital assets, our own delivery fleet, and a unit economic model that suits India, is nearing completion.
BP Eurasia is navigating through a macroeconomic challenge, has delivered high profitability, and record high market share gains. BP Eurasia region achieved Rs 3,071 crore in system sales in financial year 2025. Domino's Turkey like-for-like growth was +0.4% on a high base of 29.2%. It is important to highlight here that we share metrics for Turkey after adjusting for inflation for better assessment of our performance with regards to high inflation. Coffee in Turkey continues to make rapid strides, with its network reaching 160 cafes, serving consumers across 36 cities in Turkey. At Rs 295 crore in FY25, its system sales contribution to DPEU system sales is nearly 10%. As we shared with you in the last quarter, Sri Lanka is a great turnaround story, where we have successfully applied our emerging market playbook and delivered highest-ever revenue at Rs 81 crore, with record high growth of 45.6%.
We are committed to profitable growth. As per pre-index, 116 consolidated EBITDA came in at Rs 1,037 crore, resulting in a margin of 12.7%. Standalone EBITDA stood strong, with Domino's EBITDA scaling to a record high of Rs 857 crore, with an impressive 12.4% growth. Despite offering free delivery to customers, Domino's India margin was at 14.5%, nearly flat year on year. DP Eurasia also maintained a robust EBITDA margin, showcasing the team's ability to manage costs and drive efficiency in a high inflationary environment. I also want to highlight the progress we are making as a food tech company. We recently launched ILET, which is India's first Android-based point-of-sale system and a cloud native, developed 100% by our in-house team. It will streamline operations, personalize customer journeys, and flat training times in stores, boosting employee productivity. In the end, I'd like to also give you some strategic focus and an outlook.
As we look ahead, our priorities remain clear. We continue to aggressively pursue growth opportunities for Domino's, leveraging our brand strength, our innovation spirit, and unmatched delivery capabilities. We'll continue to build a large, profitable business for both Popeyes and Coffee, in addition to Domino's. We will maintain our disciplined approach of capital allocation, ensure that we are investing in areas that deliver the greatest value to our shareholders, while delivering joy to our customers. Our network guidance is as follows: We'll open 280 Domino's stores, with a split of 250 in India, 30 in Turkey. In Coffee, we plan to open 50 cafes, and in Popeyes, we plan to open 30 stores. Thank you. With that, I will request the moderator to commence the Q&A session.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and two. For better audio clarity, all participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from Vivek Maheshwari from Jefferies. Please go ahead.
Hello. Hi. Good evening, team. A couple of questions. First, more from an industry standpoint, what is your outlook? Of course, you are gaining share. Generally speaking, a lot of consumers, especially urban-focused companies, are complaining about moderation in growth. What is your outlook, both from an industry standpoint and your ability to continue to gain market shares as we head into F2026?
That's a great question, Vivek. I'd firstly like to say that what is working for us is structural. We are focused on delivery, and therefore, pushing the boundaries on 20-minute delivery is structural, and I believe that will allow us to gain share going forward. As you can notice, we have dramatically increased our focus on menu innovation. The amount of pace that you've seen, whether it's launch of chicken, Chicken Volcano Pizza, three new ranges of cheeseburgers, and now Big Big Pizza, backed by very strong media investment, we believe will continue to take the momentum. Number three was moving from four regions to seven regions. In fact, we are also testing for the eighth region, as North India is beginning to reach more than Rs 1,200 crore. We are trying to even split it further to drive the focus in micro-markets. Number four being rapid expansion of stores.
We have increased the pace of expansion of our stores. Last, but the culture, which to me can never be copied. If I see these five in total, Vivek, it will sound always like self-help, but these are structural because we are operating in a very large market, which is largely unorganized. If we keep that lens, we'll continue to penetrate, grow more as long as we stay true to these five structural initiatives that we are drawing. We continue to remain bullish, and therefore, I am refraining from commenting on the overall demand sentiment. Again, looking at, are these levers working where the market is $60 billion and the organized segment is $12-$15 billion?
Got it, Sameer. The second one is on the dine-in bit. For the first time, of course, there is a low base and all of that, but you have been seeing a decline in dine-in revenues, dine-in takeaway revenues for the last several quarters. This is the first quarter where it has actually turned the corner. Do you think it is sustainable? How do you plan to build on this in FY26?
See, we will never lose focus on it, right? I think it's yes, there is a big tailwind of delivery, and with 20-minute and our own assets on delivery, with so much of technological investment behind it, I think that momentum should continue for some time. Now, coming to dine-in, in fact, I want to share something more that we've taken about 500 stores which are very dine-in heavy, and we do a mystery audit on it. In my last two and a half years at the company, I have never seen such high scores in terms of customer satisfaction, the cleanliness, hygiene, service, and of course, coupled with great quality food and outstanding prices. Overall, I think I'm relatively more bullish on dine-in, to be honest.
Now, on-premise sale, to the extent we get the data because we break the on-premise sale into two parts: dine-in and takeaway. When I joined the company, takeaway was bigger than dine-in. Now, dine-in is bigger than takeaway, and dine-in per se is growing very rapidly. Takeaway is also declining rapidly because there is no reason for a customer to come to the store and takeaway because the delivery is free. I genuinely believe when some of these bases get corrected, dine-in may come back and even surprise me. I stay very optimistic about dine-in. We are seeing for the first time order growth in dine-in, backed by some of the initiatives that we've taken.
That Rs 99 Meal that we launched exactly a year ago, now with all the marketing support, whenever I visit the stores, I see customers at 3:00 P.M. or 5:00 P.M. asking, "Can you give me? I got late," or there are customers waiting for that particular service to start. If we focus on great value to customers with superior dine-in conditions and with a new design of stores, I feel very, very good about having a large cohort or a base of customers which may want to go out and eat especially during lunch hours, which we believe we can do even better than where we are.
Okay. That's good to know, Sameer. The last question is, you mentioned Domino's margins for this quarter at 14.5% and standalone at 11.8%. There is quite a bit of gap which persists between these two. One, can you explain where exactly are you losing so much? Second, what is the way forward to bridge the gap between the two?
I think, Suman Hegde, this is largely investments in our emerging brands. When we have three other brands, Hong's, Dunkin', and Popeyes, and as you see, we have already taken a stance of curtailing any or not doing any expansion in Dunkin' and Hong's. This is the call we took mid of the year, and focusing majorly on Popeyes, you will see that this is getting corrected. In fact, in a couple of years, I do believe this drag should at least, there should be no negative surprises from it, and drag should come down by half. Very committed to this. We know where it is going. Some of the pieces around expansion of Dunkin' and Hong's, we've already taken, and we will see the goodness coming in, or the delta between the Domino's margin and the overall JFL margin should reduce in coming quarters.
That's why we are also more confident on the margin trajectory from where we sit today.
Interesting. Interesting. That's about it. If I have your permission, can I just ask one question to Mr. Bhartia?
Yeah. Yes, please. He's in the room. Please go ahead.
Okay. Sure. Mr. Bhartia, there are a lot of investors who have been asking about the transaction on HCCB. Two bits over there. One is, from a group perspective, your focus on the new asset versus the existing one, especially Jubilant FoodWorks. That's part one. Part two, again, to the extent you can share your thoughts on how would the funding happen and how much of the resources need to go from Jubilant, either via stake sale or via pledging? If you can share your views on both, it would be very useful.
No. Partly, I can tell you my heart is in the food business, which we started almost 30 years back. We see, and we continue to see, more excitement and more growth opportunities in India. You can see from this year's results. Our focus, yes, focus will remain at Jubilant FoodWorks. On the funding of the new investment, most of the funds have been arranged. I can't share that with you. It's not possible. Soon you will know. I will just state that.
Looking forward to that. Wish you and the team all the very best.
Thank you.
Thank you, Vivek.
Thank you. Our next question comes from Tejas Shah from Aventus Park. Please go ahead.
Hi. Thanks for the opportunity and congrats on sustaining strong SSG. Sameer, just wanted to know why margins are gradually recovering. I'm curious how the management internally defines the new normal of peak margin. Do you still consider historical peak that we had because at that time we had delivery charges and other structure also, or do you believe that we need to kind of should not anchor our thoughts around that number?
Yeah. I think we should look at the peak at post-index was peak was around 25-26%, right? That is obviously not a sustainable number. See, the operator in me always sees more juice in margins everywhere, to be honest, right? When I tell my team every day, I feel there is so much more juice in leveraging data technology and running a very tight operation. At least when I sleep, I worry less about margins. I am always very thankful for growth, and I always worry less about margins. Therefore, coming back to your question, I see no reason for us that we cannot improve to 100 basis points from here. That is what Suman had also mentioned during our investor day. We maintain that stance. We are seeing leverage in the Domino's in India for going through.
The drag that you see is largely on account of new brands. We have to invest in new brands, right? This business, we know, it takes 10-15 years to build a very strong, successful brand. Once you do it, there is no looking back. We are cognizant. Can we do it faster? Yeah. We are greedier over there. Can we do it in five years? That is what we are attempting to do for the first time in, I would say, a little bit in the history of QSR in India.
Yeah. Very clear. Second question. The past three weeks have seen heightened geopolitical volatility. In that context, how are you evaluating the potential risk, if any, to our investments in Turkey?
We view these markets very separately, right? If you go to Turkey, they're oblivious to any political changes, whether it's or the brand as Domino's and coffee, which is actually a Turkish brand internally, they're not concerned about any geopolitical risk, whether it's tariffs or Russia, Ukraine, or anything which is happening on India-Pakistan border. The momentum in the core market and the consumer base in Turkey continues. They are growing in dollar terms. The real GDP growth, net of inflation, has always been 3-4%. In fact, if I look at just the macroeconomic condition, I typically don't like to talk as a CEO. I'm an operator at heart. In fact, the interest rates have been coming down. The interest rates have been tightened.
As a result, inflation has been coming down in the last two and a half years that I have been associated. I feel good about the macroeconomic situation in Turkey. The core pieces that we had, it's the largest consumer base outside of Russia in Europe and the youngest population with almost three and a half-four times of per capita GDP versus India. All of those things are intact, and therefore you see very solid performance of both Domino's and coffee in Turkey. I will not worry too much about macroeconomic factors or anything geopolitical risk impacting Turkey.
Sameer, the other dimension of this question was that do you foresee or do you worry about any regulatory or policy pressure to revisit the investment, or perhaps it's too early?
Not at all.
Not at all.
We don't see anything which is there.
Yeah. Lastly, just a small request. If the time gap between the results release and call could be slightly extended, it would allow us to come more prepared and ask better questions. That's it.
My apologies, Tejas. We will do better on this one. I think the timing a little bit got extended. We will do better on this one. If there are any unanswered questions that you have, please feel free to reach out to Lakshya, and we will do better on this one.
Thanks and all the best for coming forward.
Thank you, Tejas.
Thank you. The next question comes from the line of Jignanshu Gor from Bernstein. Please go ahead.
Hi, Sameer. Congratulations. I think on fantastic results for the standalone business. I wanted to check regarding Turkey and continuing with the previous conversation. How do we structurally think about that business and its margins? It has been volatile, at least on a quarterly basis in the past few quarters. Do you think this is a sort of a stable view which we can take forward, at least on an annual basis, or do you think it is still evolving?
Suman, you can take that, but at least from a core market standpoint, this is how I track. Therefore, I feel very good about it. Firstly, their transaction volume should grow, new customers should grow, revenue should grow. Their growth in Lira terms should be ahead of the core inflation rate, which is a tick mark. Coffee should expand at a faster clip versus Domino's, which it is, right? It is a franchisee-led model. Therefore, there is no capital layout that we have to give to open up stores. Therefore, it is high ROIC. None of this has changed. In terms of margin, it is largely accounting level change, right? Which is evaluation of inventory in a high versus low inflationary environment.
You were sitting on high inventories which get readjusted or reassessed if your inflation is high after one year, and therefore you get inventory gains, valuation gains. If I look at the core health of the business, again, as an operator, is my volume growing? Yes. Am I ahead of inflation rate in terms of my average ticket size? Yes. Are my franchisees happy and they're continuing to expand stores? Yes. Is my working capital improving? Yes. Is my debt reducing? Yes. Dress everything, and it continues to be that aggressive, right? Which was our thesis. Dress everything is to me a little bit accounting. You just look at slightly longer term. In the 9-12 month period, it should all kind of the volatility should go away. Suman, you might just want to add points to kind of stress upon if I've miscommunicated anything.
Jignanshu Gor and Sameer did cover everything, and you're absolutely right. I think in the last call, we did mention saying the Turkey business, even as we manage performance, given the volatility and the hyperinflation accounting that happens there, which causes a bit of vagary in the EBITDA quarter on quarter, depending on how the inventory levels and debt move, we should take a bit of a longer-term perspective, right? Now, what we said last time also, it's a PAT-accretive business to overall JFL standalone, and you see that in the console numbers coming through. It is a cash-accretive business also, given the less, given their capital outlay is low, given the franchisee model perspective. If you look at their PAT, we said last time, they're only in the range of 6-7%.
Their full-year PAT has come in the same range, and it is improving year on year after you account for the EBITDA variation account of the inflation accounting. Hopefully, yes, hyperinflation should be out by another 18-24 months, and we'll see a more stable state of affairs for people on the street to understand the numbers. From a business performance perspective, again, I'll just reiterate what Sameer said. Inventory levels are down. Debt is almost half of what they exited at last year as the economy starts to pick up and the inflation levels come down. Their cost of borrowing is down, and we also looked at refinancing options of the Turkey debt locally. Hence, overall, it's a good story on performance of this.
Yes, I do realize it's a little difficult to understand the movement quarter on quarter given the different accounting standards that they use. Just do look at it from a nine-month YTD full-year number, which we also help you understand better as we release everything.
Okay. No, thank you. That's very helpful. Thank you for that. Sameer, moving back to the India business and focusing on Domino's, I think we've had a fantastic performance on both online and now on-premise. Do you see, related to all the discussions which are happening by a lot of other players in the industry, any difference in growth and demand environment that you are seeing, let's say, in the larger cities or maybe the top-tier cities versus the smaller cities? Since I think you are one of the most spread across companies with the deepest distribution. So is there any color that you can give us on the demand side? That will be helpful.
In fact, when I look at growth of tier one to tier four cities and I look at it every month, there is absolutely no difference, right? They're all very similar, one to two percentage points different when I look at order growth, right, between each other. We are not seeing the answer. I think, again, I go back to the point, it's a $60 billion market with only one third of it organized. If you're able to create great value, great service, fast delivery, and with fast, spin free, I call it the three F business, fresh, fast, and free, right? If you have these three, there is enough and more growth to be taken. I absolutely see no difference between tier one, two, three, and four.
It is about, and like I read a lot of your reports and other peers that you have in this call, I think the one learning is if you give a great service, consumers are actually willing to pay more for service and product. Of course, products coming at high value with high-quality keys and products. We are seeing growth in all these.
Okay. Thanks. Lastly, just a housekeeping question. Are you facing one of the food aggregator platforms called out shortage of delivery drivers specific to this quarter? Is that kind of seasonality that you also see, or is that a pressure that you're also seeing since you probably have the largest delivery fleet after that?
No, nothing. It is not easy to build these businesses, right? Especially with our own fleet and constant pressure on getting riders. Overall, of course, we do see pressure. It happens during the season around April when there is harvesting, right? These are minor variances. Jignanshu Gor, they do not even come to me. The team are very capable of using data to forecast how many riders they need, what will be the absenteeism. Therefore, the machines run the incentive program so that we meet. In fact, the best delivery accuracy or timeliness has been in the last couple of months ever. I am very happy to note that customer metrics are improving, and some bit of here and there is more noise to me.
I was going to just add on that. I think it helps that one, of course, we have our own fleet. Access also to riders is much larger than what the aggregator will have where they would have to bring their own assets, right, which is what we invest in. Secondly, I think when I invested there, we did share on how we have used technology to hasten the process of even onboarding of drivers, right? If somebody has a license, meets the criteria, it is almost like a 30-minute Q&R, and we can get them on the street with our assets. I think a couple of things that we have also done in terms of investment, both in terms of assets and tech, gives you a bit of an edge to get through, of course, because there is a shortage and we know why.
A good point. I think what Suman is saying is you have access to a wider pool of riders who do not have bikes, right? Therefore, that can act as a buffer.
Sure. That is it. Thank you so much. And congratulations to us all the best.
Thank you, Jignanshu.
Thank you. Our next question comes from the line of Sheela Rathi from Morgan Stanley. Please go ahead.
Yes, I'm including migration. Sameer, my first question was with respect to, I mean, the question is, do you agree that cost of doing delivery business is going up for us given that there is high competitive intensity there? Second is there's no delivery charge. Third is we're trying to reduce timelines. Fourth is there is inflation around labor force. And then there is discounting, most importantly. First is, and I hear you said this to a participant that we will try and bring back our margins to improve it by 200 basis points. There's no disagreement there. The question here is that is it getting more and more difficult to do or the cost to run a delivery business higher because now that is almost 73% of our revenue?
I think, I mean, it's a few, I think it's a loaded question here. My bias is to say yes, of course, it is difficult. I would say in the last few years, we've really changed the game on this one. Now, let me give you some news. You spoke about headwinds, right? Of course, through quick commerce and direct-to-consumer channels, aggregators, big e-commerce players, we are all kind of vying for the same delivery associate. Therefore, there is pressure, especially in about 39 PIN codes in India, which is the highest convenience seeking. I do see pressures over there, and therefore, we have to be competitive over there. Now, having said that, we have our own bikes. There is a larger pool over there.
For our delivery rate or DPS, as it's called, deliveries per hour is higher in our system because you are doing from one store to a catchment area, and therefore, delivery associates can do more deliveries, therefore earn more. We give them a restaurant and a place where they can use washrooms. They have a career path. Many of our circle heads, region heads started as a delivery associate. There are several factors which go in favor of us, which make us, I would say, a viable option versus the competition that may exist. From a cost standpoint, coming to it, again, the operator in me tells me, "Of course, this will be an additional cost, but there are 20 other places where my team is executing to find those money." Growth is the biggest elixir for our business.
It is a lot of that growth flows into the bottom line because we have large fixed costs when we are running an operating store.
Sameer, anything on discounting? Because the discounting has been much higher than what we have seen in the last few quarters. Obviously, it's resulting in better LFL growth. How are you seeing the discounting?
Sheela, in fact, discounting has come down for us. You always use technology. It is discounting. So where are you reading it, if I can? In fact, discounting was a tailwind to us.
I mean, I see it on my app, but even in the presentation, I see that the last 6 in 1, we almost are giving 50% discount on that product. Obviously, it's an introductory product pricing. Just want to hear from you how discounting is for us versus the last 12 months.
Yeah. So then discounting as a % has come down. Now, of course, specifically talking about Big Big Pizza, right? It is a Rs 700 and Rs 800 product, right? It adds to my average ticket price. Therefore, my delivery cost as a % comes down. My insider crew cost as a % comes down. My rent as a % of that order comes down. There are several tailwinds. In fact, generally, customers reach out to me, Sheela, when things go bad. Big Big Pizza has been one such occasion where customers reach out to me that, "Is this a pricing error? Is this a mistake? When are you going to stop it? Looks like nobody ordered so much food at such price." Again, we are gaining customers. We've been able to grow the share of large pizzas by 3x in just 15 days.
I would rather take that as a stake. Like I said, I will find the money in terms of margin expansion.
I just like to add to that, Sheela, and I agree with what Sameer said, we constantly look at discount. Now, there are two things also here I think it's important to focus on, right? Of course, you might see a high discount, but the way we played is, what is the implication on the margin and what's the implication on the gross margin? How does it come through to EBITDA? Yes, you might see a high discount, but if it's an item which improves the overall mix on realization for us on the top line and also improves the gross margins that these items make, then higher discount is not a bad thing from a portfolio perspective. I think playing those levers effectively is very important.
The second one, while you're seeing discounting, it is also true that we have a backend analytics engine which runs to also optimize where we need to or where we are seeing certain things higher, then you discount or you don't. What you see in an app might not be similar for you versus what somebody else sees. I'm just saying it is actually customized to that extent, which actually our tech capabilities allow us to do, which ensures that we manage our discounts effectively rather than it looking like 50% across. Hope that answers to some extent your question.
Absolutely. I hear you. My final question is on portfolio. Just want to hear from you in S26, how should we think about the roll-out plans, especially from a state perspective, which states will we be focusing on? Thank you.
Yeah. So from a state perspective, Sheela, we want to get to a number of close to 100 and therefore a lot of marketing investments and start to look very meaningfully or have a larger base and you can buy media inventory. That is what we are liking. Whether it happens in 12 months and 18 months, I express less about it. I want each of my new stores to be accurate too on the average daily sales, which we have been very delighted that when I see last 10, 15 stores we opened, all are accurate, right, and very close to the areas that we wanted to be. Equally importantly, we see month-on-month growth on the areas and very positive SSGs in the last quarter. We have given a guidance of 30, right?
I first list whether it is 30 or 35 or 25 or even 45. We exactly know which locations to open. Geographic focus will be largely around north. South, Sri Lanka is the biggest geographic focus. Then Delhi NCR, and we are evaluating west as we speak. No further expansion beyond this.
Thank you.
Thank you. Your next question comes from the line of Nihal Jham from HSBC Securities. Please go ahead.
Yes. Good evening, Sameer. Two questions. One is you've obviously highlighted about the customer acquisition, and that is very much laudable and visible in terms of how it has played out over the last 6, 12 months. I'm not sure if there is a way of tracking, but is there a comfort that, say, when there is an improvement in sentiment that you would expect these customers to obviously step up, that these are not discount-seeking customers? Maybe when you try pulling back some of these discounts, that all the effort that was spent in terms of acquiring them is something that maybe does not fruitify going forward?
Yeah. I think I would concur with it, right? We are very careful on the quality of business we are building, right? These are not discount-seeking. These are value-seeking customers, right, and convenience-seeking customers. SSCR retail rates have remained the same. In fact, our retail rates have begun to inch up a little, right? While it may be small, therefore, I do not want to celebrate at all. Therefore, I am very happy with the quality of customers we are acquiring. In fact, our install-to-first-order rates are at an all-time high. Typically, what digital performance marketing teams will do is they will go for very high install base and therefore hope and pray some percentage of customers will order. Actually, we have reversed it. Our install base, if you look at the quarterly install of apps, has kind of been there about.
The percentage of customers ordering has improved, which means that our offerings, our service, our reach has improved, and we are acquiring better quality customers. So no concerns over there at all.
Point taken. The second question was that you mentioned about 250 stores for Domino's India. Can you just give a ballpark sense of the split? Is there any sense of split stores, metro, non-metro? Any more clarity on that?
Yeah. So nothing. I think, like I said, we have a list of 1,000 locations, right? And out of that, some 700-800 is white locations where we do not serve, right? The remaining are split, right, in the overall. So split in the overall scheme of things, it is not split. It is not going to be more than 20%, right, or thereabout. In one quarter, we may do more split because we found the right set of rentals and space. In the others, we will do less split because we were able to find more lucrative offers in white areas.
Got it. Just quizzing one in, possibly give an outlook on SSG for SR26, LFL or SSG for the India business.
We do not give that SSG, right, in this environment. I think we do not generally give that. I think overall momentum continues, and the strategy that we have put in place, we are very confident about it.
Thank you.
Thank you.
Thank you. The next question comes from the line of Percy Panthaki from IISL Securities. Please go ahead.
Hi, Sameer. Congrats on a good set of numbers. A couple of questions from my side. Firstly, on the LFL, now it's been a couple of quarters since you have done a 12% kind of LFL. Of course, this comes on the back of a negative to flattish kind of LFL in the base. Now, this base effect is there for the next two quarters as well. When we come into 3Q of FY2026, we will be lapping a base of 12% LFL. I just wanted to understand, do you see a material deceleration in your LFL growth in the second half of this year given the base effect? How should we be looking at it, basically?
Yeah. I think it's actually tantamount, Percy, to giving some kind of guidance, right? Therefore, I'm refraining from answering your question. Would base have some effect? Of course, it will come out. Does base have some effect in the current quarters? Of course, it does, right? We are seeing historic highs in our customer acquisition rate, volume per store, and also now repeat rate. Now the average ticket prices are also beginning to improve. Therefore, the mature store areas, if you look at, right, that number is there, right? As long as that is there and we have a 2-2.5 year payback period, slight moderation in life for life, I'll worry less about it, right? I'm obsessed about the mature store areas, the acquisition rate of customers, repeat rate, and the ROI model that we have for store.
Got it. Got it. Second question is on the profits. The console and the standalone net profit this quarter are almost exactly the same. Just wondering what we can do to really widen that gap. I mean, is it possible for us to, let's say, take a loan in India at the sort of Indian interest rates, which would be, let's say, 8%-10%, repatriate this money to Turkey, and then pay off the debt in Turkey because there we are paying like 30%-40% interest rate? Is that something you are considering? I mean, ultimately, the acquisition is good, but it is not yielding us any incremental PAT. That is my concern.
Let me take that. Percy, thanks for the suggestion, Percy. I think you will be happy to hear we are already in implementation mode. I agree. I think that there are a couple of things, right? When you look at console, and it is not only Turkey, we have a couple of other businesses as well, which are Sri Lanka and Bangladesh, where we continue to invest. That also, and as the trajectory of profitability on those improves, we will see that also flowing through into console, which currently is a negative number, which offsets the profits even that Turkey has brought in. The second point of expanding the India numbers anyway, we have already spoken about it. Coming to Turkey and the loan, we have already looked at refinancing, and the interest rates in Europe are even lower than India at the current rate, right?
Even after taking into account the Euro Rupee or the Euro Lira translation impact. We are already looking at refinancing the debt of Turkey. Turkey will not be sitting on a high cost of borrowing starting this year, which we are already in work in progress on. The second part is overall Turkey, if we look at a couple of years ago, did not have such significant borrowing at the local level. It was not existing. They had certain restrictions on account of inflation and, of course, the Russia business that they had a few years ago, which had increased the borrowing rate. With that coming through, we also expect Turkey as a business to be at minimal or zero debt coming into next year, calendar year, I mean.
All in all, you should see the overall pack improvement between the standalone and console coming through between these three businesses as they start flowing more numbers of profits into the bottom line.
Got it. Just one bookkeeping question. This 200 basis points of margin potential on standalone, which you mentioned earlier in the call, Sameer, over what time horizon is that?
I think we said it in the investor day as well, right? We had called out on the investor day, and we said over the next three years, FY2026.
That is on path level, right?
We said it's a minimum off, right? Let's not put we said at least that much. Of course, it all depends on the.
What is the larger point I was making is that this is not coming at the expense of the, firstly, we are not losing margins and mindlessly that we know where to recover it from and not having any path. The most important thing right now was getting growth and acquiring customers. That's the message you should take. 200 basis points, I feel like, like I said, as an operator, and you say, "All this is enough juice." Now, teams have to execute against, get it store by store, pizza by pizza, brand by brand. Those things are there. I think I'll stick to someone's guidance of like 200 basis points for minimum should come in over the next three years.
We didn't talk about path level, right?
No, we said overall EBITDA level flowing through the PAT as well.
Okay. Okay. Got it. Okay.
Retailing or financial, like paying our debt and therefore getting it from interest, it was largely operational is what we mean to say.
Understood. Understood. That's it from me. Thanks and all the best.
Thank you, Percy.
Thank you. Our next question comes from Ashish Kanodia from SETI. Please go ahead.
Yeah. Thank you. The first question was on the new product development within Domino's India. On the analyst meet, you touched upon that. For example, in the U.S., chicken wings is almost 18%. Now, when we look at the two new product innovations beyond the pizza, the chicken wings and the cheesecake, can you give us some sense, one, in terms of what kind of a contribution they are hitting right now, just a ballpark number? Second, are they also helping you whether to drive higher dinings, customer acquisition, and then also day pass? Are you seeing more revenue share coming in during the day pass or during snacking time? If you can also touch upon a bit on that.
Yeah. No, I think great set of questions. I think you are talking about disaggregating growth into multiple vectors. Chicken is one adjacency, which is an important vector. Customers order pizza when they're craving for cheese and when they want to share. Chicken wings, chicken poppers, the bites range that we have, and the fried chicken, that boneless fried chicken that we've launched, right, it is exceeding our expectation. In fact, I spend every Monday morning with my sourcing team to source for chicken wings because we are constrained on supply of chicken wings. We had to ration chicken wings and, in fact, stop the business in north and west to serve south and east, right? It will give you an indication that even a product which has been launched in just four or five months is gaining traction more than we thought.
The salience of the product obviously is higher in East and South, where it is a larger non-vegetarian eating market, and it is ahead of our plans. I again look at this as a Rs 1,000 crore platform, right? I genuinely believe the range of chicken, right, as an accompaniment to pizza will definitely get to that number. It gives me all the more confidence in terms of growth rates I see in the stores, attachment rate, and the customer feedback that we are getting. The second vector you mentioned was, what can you do for lunch, right, or late night, right? I think teams are working. We are iterating with options for lunch, and we should launch very soon. Focused on the right set of markets. The Rs 99 four-quart meat lunch available in dining is doing very well.
Continues to be the growth driver over there. We have extended a different version of it at a higher price for delivery customers. That is now beginning to do well. Teams are building more propositions which are either focused in on value-seeking customers or customers looking for state IT because that's another and comfort. That is another vector we are focusing on. Multiple of these vectors in play, and you will see the continued pace on product innovation with very sharply targeting a certain occasion, meal hour, or a set of consumer cohort.
Sorry, that's helpful. The second one was on Popeyes. Almost a year back, you talked about medium-term guidance of 250 stores. This year has been around 19 stores. Next year, there's acceleration to 30 stores. How should we think about that 250 stores? Is it a three-four year phenomenon where maybe next year you are still trying to get maybe the supply chain right, as you talked about chicken sourcing, etc.? Should we expect a meaningful acceleration in 2027, 2028? I'm trying to understand the 250 store guidance, Rs 1,000 crore revenue. Is it like a three-four year or slightly more long-term?
Yeah. I think you definitely begin to see acceleration going forward, right? Again, like I said, we are mirroring the playbook that we want to build to get to the firstly is to get to the right three things, which are the most important. Number one is the store, CapEx, and model, right? That we know what is working, what is not. In three years, we have now a very good strength, and we've been able to bring down CapExes, right? If shortened the supply chain, we will be leveraging the Domino's supply chain. Therefore, that translates into gross margins, right, which are very healthy, right? The third is the customer love, right? This is the trilogy. If these three, therefore, I feel very good about solving almost 80-85% of this trilogy. We know margins will come, right? We'll get to that number.
Once I get a little bit more data in the next couple of quarters, we should also expand beyond that.
Sorry, Sameer. I think this question got asked, but when I look at the standalone EBITDA and then both EBITDA and revenue, and then what is there for Domino's India, the implied revenue for other businesses is roughly Rs 2,000,000,000. When I look at the EBITDA loss for the other businesses, which would be Dunkin', Hong's, and Popeyes, it is roughly Rs 1,300,000,000, give or take maybe Rs 20,000,000-Rs 30,000,000 here and there. Is there anything else also which is sitting here beyond the store-level losses? Because just at a Rs 2,000,000,000 revenue, this Rs 1,300,000,000 looks slightly higher. At least my understanding is given that Dunkin' and Hong's have been there for quite some time. Maybe the losses in those two formats would be bare minimum. Is it right to understand that a large part of it is in Popeyes because of the investment?
Yeah. I think the, I would say, the losses in Dunkin' and Hong's are also not less, right? I think otherwise, whatever you said is actually right, mostly right. Except for the fact that Dunkin' and Hong's were good, we have corrected a lot of it, and therefore you will see more goodness coming in the coming quarters from this portfolio.
Sorry, Sameer, just last one is on the inflation side. Are you witnessing any inflationary pressure on the cheese or any of the raw materials?
Yes, I think we are. I think there are a few commodities which have gone up, especially cheese, oil, and coffee, right? These are, I would say, the top three. There are some tailored flour. I think what the team is telling me also gone up, but the crop has been really good, so we expect some of the prices to moderate. We are seeing it. We have covered a few areas, right? I don't, at least the internal plan again is to beat the inflation through internal efficiencies, better utilization of factories, lower conversion costs, lower logistics costs, right? I do see inflation in the manpower and wages and those things will be there. Overall, I think the inflationary environment is, I would say, relatively benign because oil prices have been stable. The crude oil prices have been stable for a long time.
The power fuel has been stable. There are certain I worry less about inflation what I used to worry two years ago.
Sure, Sameer. That's super helpful and all the best.
Thank you so much.
Thank you. We'll take the last question from the line of Shirish Pardeshi from Motilal Oswal. Please go ahead.
Hi, Sameer. Thank you and congratulations for good delivery. Just quick question. I was just trying to understand this Rs 99 lunch menu. I think there is a lot of noise and there is a lot of push from the management side, but in fact, our consumers have also accepted. Just more curious, in your SSG a year before and now, if we calculate, what kind of delta we would have got? Maybe substantial 200-300 basis points or more than that?
See, lunch hours definitely order growth more than that, right? Again, the way we look at our businesses is first, order growth comes in, which acquires new customers, and the repeat follows, right? On lunch hours, Shirishji, it is more than the number that you are seeing. It is a very dining-focused product, offering outstanding value. Every time I visit stores and I ask customers, "What got you here during lunch hours?" four out of seven customers actually will end up saying it was the lunch fees that brought us over here. It is a very popular product. We have to stay invested. I think it can be much, much larger than where it is. We should not lose focus on building this as truly the best dining proposition that the entire QSR industry has to offer.
One follow-up here. Do you think there is some more improvement to be done or pricing adjustment towards subside potential is possible in this business?
I think it is always there, right? I think consumers, again, I lead nowadays machines and data sciences team. Beside that, we are experimenting with few areas. We will correct pricing where we have to. Broadly, we want to stand for value and not get overboard at this stage. In some pockets where we thought it was easier to correct, like Chicken Volcano Pizza, we went ahead and corrected also. Not en masse. We will be very scientific, very rigorous in taking price hikes. There is a team that is looking at it.
Because when talking to some few places, I think the consumers are excited, and now the product is now taking off. I would say that it's worked almost three quarters now. Maybe I hope it's helping us. I was more curious that what kind of changes will happen, if at all, if you need to do?
Yeah. I think I'll refrain from saying that. I think, again, my bias is to look at the country into various consumer cohorts and the combination of stores. You have channels, which is dining, takeaway, aggregators, our own app. You have big days like Diwali, Christmas, Holi, etc. I think pricing has become a very sophisticated science than what I used to do 25 years ago. Therefore, there are several opportunities. I will let the data sciences team run experiments and without losing the growth, right, or the customer, we will take calibrated calls. We have begun to take some calibrated calls.
Okay. One quick question to Suman. What kind of, because the initial report is coming now saying that the milk inflation and chicken inflation is expected to rise, what inflation are we working with now with both these items?
I think overall basket, because I was looking at this yesterday, let me answer, and Suman can add. 2-3% is what we are working on from our food and paper, right? So that raw material and packaging material. I think we will be ballpark over there. It may be higher in milk, but we have covered ourselves. It has surprised us in oil, but the palm oil and cooking oil, it has started to cool down. We are seeing some benefits elsewhere, and therefore 2-3%. All of that, a large part of it should be neutralized by internal initiatives.
Okay. All right. Thank you and all the best.
Thank you. Thank you, Shirish.
Thank you. Ladies and gentlemen, that concludes our question and answer session. On behalf of Jubilant FoodWorks Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.