Energy Costs Weigh Heavily on Jubilant FoodWorks: CEO Assessment

Jubilant FoodWorks Reports Impacted Margins Due to Rising Costs and Inflation

Jubilant FoodWorks, the operator of Domino's in India, reported a significant impact on its margins due to the rise in costs of commercial LPG cylinders and the increase in minimum wages mandated by several state governments. The company's chief executive officer, Sameer Khetarpal, revealed in a post-results analyst call that the inflation numbers are moving very quickly, with the company being hit the most in energy costs.

The increased prices of LPG and PNG have resulted in an additional calibration in the company's systems between electric and gas-based ovens. This has impacted the company to the tune of 100-120 basis points, with the effects starting to flow into the company's P&L statements. To mitigate the impact of inflation, the company has taken conscious calls to increase prices, reduce wastage, and introduce premium offerings like the sourdough pizza.

The company reported a 66.2 percent year-on-year increase in consolidated net profit to Rs 79.8 crore during the March quarter of Financial Year 2026 (FY26) from Rs 48 crore in the same period last year. Its revenue from operations rose 19.8 percent to Rs 2,499 crore during the quarter from Rs 2,095 crore in the year-ago period.

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Here is a comparison of the company's performance in the March quarter of FY26 and FY25:

Domino's India delivered approximately 6.5 percent like-for-like growth on top of 7.5 percent like-for-like growth in FY25, while continuing to gain meaningful market share. Popeyes India, on the other hand, delivered approximately 28 percent same-store sales growth along with improving restaurant economics. The company stated that FY26 was a breakout year for the brand.

The rise in minimum wages mandated by state governments across the country has had an additional impact on the company's margins. About 11 states have already increased minimum wages as the financial year started, with the labour code also bringing in further headwinds on labour inflation. The management added that in the near term, there will be some compression.

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Rising commodity prices, led by fuel price hikes which impact logistical costs, are further impacting margins. However, the company remains optimistic about its ability to mitigate the impact of inflation through conscious calls and premium offerings.