Jubilant FoodWorks Profit Declines Due to Increased Expenses in Q3

Jubilant FoodWorks Ltd reported a 40% slump in third-quarter profit as higher expenses outweighed a rise in orders at restaurants run by the Indian franchisee of Domino's Pizza and coffee chain Dunkin' Donuts.

After the results were announced, the company's shares dropped 8.8% to a more than eight-month low of 444.1 rupees.

According to the corporation, the combined earnings for the three months ending in October and December fell from 1.34 billion rupees to 803.6 million rupees ($9.82 million).

Sales increased 10% to 13.32 billion rupees, led by an increase in Domino's order volume.

As a result of historically high inflation, margins were compressed, according to Jubilant CEO Sameer Khetarpal.

Jubilant's overall expenses increased by more than 18% as a result of higher cheese and vegetable prices.

Jubilant's ambitious expansion into country's smaller towns and cities over the past few quarters has further hurt its profit margins.

During the quarter, the firm opened 64 restaurants in India, entering 16 new cities, and also holds the franchise rights for Popeyes locations across the continent.

India is Domino's second-largest market after the United States - where it is a delivery-first business - accounts for a sizeable percentage of topline.

According to analysts, the American brand owns more than 70% of the Indian pizza market.

From 26.4% last year to 22% this year, the earnings margin before interest, taxes, depreciation, and amortisation decreased.

Rival Westlife Foodworld Ltd reported a 74% increase in quarterly profit on Tuesday. The company manages McDonald's franchises in west and south India.

According to Reuters, Jubilant had explored moving some of its operations away from the food delivery services Swiggy and Zomato in July of last year.