Domino’s Parent Jubilant Top QSR Pick For Bernstein As Pizza Business Set To Aid Growth
Bernstein ranks Jubilant ahead of its peers, with Devyani International Ltd., Sapphire Foods India Ltd., and Westlife following in that order.
Jubilant FoodWorks Ltd. is the top pick among quick-service restaurant stocks for Bernstein, with Domino’s expected to be a key driver of growth.
Strong expansion plans and strategic shifts in Domino’s business model are likely to boost Jubilant’s performance, according to Jignanshu Gor, Bernstein SocGen Group Analyst.
"Domino’s has strong tailwinds, both from pizza as a category and a peak in competition," Gor said in an interview with NDTV Profit. "The company has shown robust numbers post competition peak and continues to expand aggressively."
Jubilant is expected to add around 180 new Domino’s stores in fiscal 2025 and maintain this momentum in the coming years, he said.
"We expect Domino’s margins to outperform peers, further strengthening Jubilant’s growth trajectory," Gor added.
While Domino’s remains a strong growth driver, other brands under Jubilant’s portfolio currently pose a challenge. "The additional brands are acting as a drag on performance. However, with new acquisitions in place, we should see improvement in the next few quarters," Gor noted.
Jubilant’s operations in Turkey also remain an area of uncertainty. "The Turkey business is least understood due to economic and currency volatility," Gor said. However, the outlook remains neutral to positive.
Bernstein ranks Jubilant ahead of its peers, with Devyani International Ltd., Sapphire Foods India Ltd., and Westlife following in that order. "Jubilant has the most near-term catalysts for margin expansion, making it our top QSR pick," said Gor.
Bernstein also emphasised the need for all QSRs to adapt to delivery-driven demand, ensuring product readiness for quick fulfillment.
Bernstein’s Outlook on QSR Stocks
According to Bernstein, 2024 was a challenging year for QSR stocks in India, but 2025 is expected to be a turnaround year. "We anticipate a gradual pickup in consumer demand in H1 2025, with significant improvement in H2," the report stated.
Gross margins are expected to remain stable, while Ebitda and profit will improve due to operating leverage.
Domino’s and KFC are expected to maintain strong growth momentum, whereas McDonald’s will take a more calibrated approach.
Pizza Hut faces a crucial year in 2025, which Bernstein describes as a "crossroads moment."
Delivery growth is projected to remain robust.
