Jubilant FoodWorks Limited (NSE: JUBLFOOD) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Baldev Mall — Head-FP&A
Hari Bhartia — Co-Chairman
Suman Hegde — Executive Vice President and Chief Financial Officer
Sameer Khetarpal — Chief Executive Officer
Analysts:
Unidentified Participant
Percy Panthaki — Analyst
Nihal Mahesh Jham — Analyst
Aditya Soman — Analyst
Vivek Maheshwari — Analyst
Jaykumar Doshi — Analyst
Manish Poddar — Analyst
Aditya Vikram — Analyst
Sheela Rathi — Analyst
Latika Chopra — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call hosted by Jubilant Food Works Limited. 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 the conference call, please signal an operator by pressing Star then zero on your touchtone phone. I now hand the conference over to Mr. Baldev Mall from Jubilant Foodbox Ltd. Thank you. And over to you sir.
Baldev Mall — Head-FP&A
Thank you so much Nirav. Welcome To Jubilant FoodWorks Quarter 1 FY26 Earnings Call for investors and analysts. We are joined today by senior members of the management team including our chairman Mr. Shamiz Bhatia, our co chairman Mr. Hari S. Bhatia, our CEO and MD Mr. Sameer Chhetrapal, our CEO of Turkey. Business Mr. Aslan Saranga and our CFO Ms. Sumandhegri. We will commence with key thoughts from our Co chairman and then turn to our CEO and MD to share.
operator
Sorry to interrupt you, we are losing your audio.
Baldev Mall — Head-FP&A
We will commence with key thoughts from our Co chairman and turn to our CEO and MD to share his perspectives. 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. Hariyez Bhartia to share his views with you. Over to you sir.
Hari Bhartia — Co-Chairman
Thank you Baldev. Good evening everyone and thank you for joining us on our quarter one FY26 earnings call. I am pleased to share that Jubilant Foodworks has delivered a very strong start to FY26 despite challenging demand environment. We expect the demand environment to improve quarter on quarter going forward. Our results reflect the strength of our consumer franchise, our execution and our strategic choices. We remain focused on protecting our core value propositions, affordability, quality and convenience while driving operational efficiencies. We continue to expand our footprint adding 71 net new stores during the quarter and taking our total network to 3,387 stores across countries in which we operate.
This expansion is aligned with our long term strategy and reflects our confidence in our brands and in our markets. Consolidated revenue for the quarter stood at rupees 2,260 crores marking a 17% year on year growth and an impressive like for life growth of 11.6% year on year. For Domino’s, our continued focus on cost and productivity is yielding results with pre indis EBITDA margins improving year on year. We are also seeing fantastic response to our new innovative products offerings. Lunch Feast Chicken sides and Big Big pizza launched in second half of FY25 are doing very well with consumers internationally.
Our Turkey business team continues to navigate a high inflation environment with agility and resilience. Business has generated healthy free cash flows and strong profitability. By next quarter we will start funding the cost of acquisition debt from Turkey. This is an important milestone for us. Jubilant Foodworks performance is a result of disciplined execution and high performance culture across organization. We are building a durable future ready business, one that balances growth with resilience and innovation with discipline. As we move forward, our focus remains clear to deliver competitive sustainable performance while staying true to our purpose and values.
We remain committed to delivering long term value and embracing the opportunities ahead with the same. Be the bold spirit that has defined our journey so far. With that, I will now invite our Managing Director and CEO Sameer Ketripal to take you through the operational and financial performance in great detail.
Sameer Khetarpal — Chief Executive Officer
Thank you Mr. Bhartiya and good evening everyone. The last quarter has been nothing short of exceptional for Jubilant Foodworks. Our teams have executed brilliantly, delivering results against odds, exceeding both our internal targets and our commitment to you, our investors. Across every brand and geography. Our strategy is delivering compounding results. We have accelerated menu innovation, rapidly grown the share of our own digital assets, made decisive progress towards 20 minute delivery, sharpened our focus on growth and margins in Domino’s India, scaled popoise towards becoming India’s most loved chicken brand and generated healthy cash from operations in our business in Turkey.
On every one of these fronts, the quarter stands out as one of our best. Let me talk about the growth highlights First Group system sales reached 2,671 crores powered by strong consumer engagement across brands and markets. We added 71 net new stores this quarter expanding our network to 3,387 stores across the markets. Domino’s India led the way with 61 net new ads now present in 484 cities, a clear reflection of our confidence in the long term growth potential of the Indian QSR market without losing the short term opportunity. Consolidated revenue grew 17% year on year to 2261crores while standalone revenues grew 18.2% year on year to 1702crores.
Domino’s India delivered an impressive 17.7% revenue growth driven by 17.3 order growth and 11.6% like for like growth. Our third consecutive quarter of double digit like for like growth delivery like for like growth stood at 20%. Even with the full impact of free delivery now in the base matured Store ads reached a new high of 85,396 reflecting strong throughput and operational excellence. Delivery channel grew by 24.6% year on year while Dine in also increased after a long time by 2.5%. Supported by targeted consumer initiatives on profitability and margin discipline, we continue our approach to cost reduction and capital allocation on pre indease basis, the EBITDA grew by 18.2% to 292 crores with margins at 12.9%.
Standalone pre index EBITDA rose ahead of revenue at 22.5% year on year to 205 crores with margin expansion of 42 basis to 12%. While gross margin dipped due to a deliberate value led pricing mix shifts and the extended IPL season and the overwhelming success of Big Big Pizza. These action drove superior growth, stronger new customer acquisition while protecting the overall margins through operating leverage and tight cost discipline. On post India basis, interest cost declined 17.6% year on year thanks to better debt management and working capital efficiencies further strengthening profitability and cash flows.
operator
Soy Chandrapi, I’m losing your audio.
Sameer Khetarpal — Chief Executive Officer
Okay, I can only speak louder. Effective capital management has led to meaningful bottom line improvement. Consolidated and standalone PAT grew by 59.8% and 29.5% respectively on innovation and digital engagement for non veg lovers, we launched Chicken Burst Pizza this quarter, a new format that’s already gaining traction and building on our cheesy platform range. Our digital ecosystem continues to scale with monthly active users of about 15 million up 21.5% year on year, app installs are up 19.4% to 12.3 million and loyalty members at 37 million up 48.6%. The metrics reflect our ability to drive consumer engagement repeats powered by our technology.
Popoise momentum is now strong with double digit SSG growth in South Indian markets and improving restaurant profitability both year on year and quarter on quarter. We now expanded to west with a healthy pipeline for Q2. Our investments in the business in Turkey is delivering exactly as intended. PAT accretive, cash positive and high ROCE. The business reported 519 crores in revenue with a 9.4% PAT margin. While LFL growth was moderated by CPI price lag order volume grew healthy and profitably improved through cost discipline and capital management. Coffee in Turkey now operates in 38 cities with 167 cafes winning on value and service.
Overall. I sum up the performance as we are building as we are agile today, ready for challenges and building a multi brand consumer first food, tech, enterprise. The focus is clear growth and profitable growth, acceleration of innovation, digital leadership and operation excellence. With strong momentum across all our brands and market, we entered the new quarter with confidence and conviction to do better. With that, I request the moderator to commence the Q and A session.
Questions and Answers:
operator
Thank you very much. We now begin with the question and answer session. Anyone who wishes to ask the question may press Star and one on their touchton telephone. If you wish to remove yourself from the question queue, you may press star N2 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. The first question is from line of Percy Pandaki from my Airfield Securities. Please go ahead.
Percy Panthaki
Hi sir, my question is it’s been like two and a half years since we have taken any price hikes now. Our SSSG also has sort of stabilized over the last two to three quarters at a double digit kind of a number. So what is really holding us back from taking a price hike now?
Sameer Khetarpal
Yeah, so good question. I think in few calibrated places we are taking price increases firstly. Right. And what you see over here is. The. Our order like our LFL growth in value terms is slightly ahead of order growth. That’s what I mentioned. So it is happening. But I want all of our investors and analysts friends to step back. We are here trying to build a 5000 crore franchise. A 5000 store franchise. I think this is the time where we penetrate more. We get the throughput per store and the leverage is coming in pre India’s basis. It’s very easy to take price hike at this stage and I get like several proposals every day on my table. I am going in for growth and I can see the profitability improving at a pre index level hopefully at post index and whatever gross margin decline we have we are seeing actually the leverage coming in supply chain and multiple other places.
So what you are saying we will take it at the right time. We know where to take it. We have done the full analytics but we will pull the trigger when we have to.
Suman Hegde
Just to add on that first, while Sameer has mentioned that we have taken calibrated pricing, the inflation is not really that high yet. Right. So it is still at a benign stage. While yes we might look at dairy inflation, but there are many other components to the food commodity basket which we play with. So inflation is not really high. That is not really what’s coming and hitting the gross.
operator
I’m sorry to interrupt you, but we are losing your audio a little bit.
Percy Panthaki
Yeah, I got it.
Percy Panthaki
All right, thank you. Yeah. My second question is on the loyalty plan. Now, it’s been fairly long since we have launched it, so we are hoping that you can share some more data on this. So I understand you do share sort of the number of customers and stuff like that, but what I’m really looking at is that for a customer who has enrolled in a loyalty plan, how has his behavior changed versus when he was not in the loyalty brand? So does his AOV increase? Does his frequency increase? If you can share some kind of numbers or some kind of data on that, it will be really helpful.
Sameer Khetarpal
I will share three points over here, Percy. Firstly, our own assets are growing the fastest. So loyalty has a role to play over there. Second is frequency have begun to move up. So last year we put free delivery. We acquired customers at an unprecedented phase. So when we calculate frequency, we calculate total number of orders divided by total number of customers, including new customers. So that number is beginning to go up. And third is the cohort. Right? So in the cheesy rewards loyalty program, after earning six pies, you get a free pizza. That Cohort 4 Plus is seeing the fastest growth.
So I’m giving you a analytical but a qualitative answer per se on all three accounts without revealing the numbers. Loyalty program is genuinely working is one of the important components of driving our own digital asset growth.
Percy Panthaki
I understand what I’m. Okay, I’m not looking for numbers. But if you can tell me, See, loyalty has two or three benefits. One is that it can help recruit new customers. Secondly is that it can help increase the AOV of the existing customer. Or third, it can help increase the frequency of ordering. So if you were to rank these three benefits in terms of ascending order, which is giving you the most of the benefits and which is contributing to the lesser part of the overall benefits. That is what I was just looking at. Without any numbers.
Sameer Khetarpal
The biggest benefit of the rewards program is the long term value of loyal customers. So it is the not aov, it is AOV into frequency of the loyal customers. Somebody. So our average frequency is about three. Right. Cheesy rewards kick in at six. Right. So it fundamentally attacks customers who love Domino’s, Right. Or who love pizza. And when they’re making a choice, this Is one of more factors, one of additional factors other than delivery, innovation, highest quality of cheese, etc. To come back to Domino’s app. Right. So the way it is attacking is long term value of customers who eat four plus times the pizza.
Percy Panthaki
Understood. And lastly if I might squeeze in one question. See we started doing this double digit LFL from Q3 last year. So we have one more quarter of relatively low base. Then we hit the high base of Q3. So when we do hit that Q3 high base, how do we think of the yoy LFL going from there on? Would you say that you would endeavor to maintain the high growth irrespective of base or do you think the base effect does matter? And if it does, how much of an impact could that make?
Sameer Khetarpal
I will give the same answer what I gave last quarter basis do matter. But I think again I will request you to step back at four quarters of these double digit like for life growth. We will be expanding to the seams of the store in terms of operations and that’s what we are seeing. And I think the teams have done a great job of sweating the asset, using the same, doing lesser number of splits and growing the same store. So I think at some level to me splits will increase and will be obviously our payback period ROIs.
Those will be intact. And from a base perspective I think what is again I will draw your attention to why are we growing, right? So it is not just a base effect. We have done five things right. We expanded the pace of innovation, we invested heavily in digital assets, we did free delivery in top metros. We are the best in terms of 20 minute delivery. And lastly we have like expanded the teams on the ground to have daily rigor. Right? Like this for example this Rakshabandhan, it was raining heavily, we exceeded all our expectations and yet delivery metrics came ahead of what we were internally anticipating on day like that.
So there are combination of factors that is not just base and therefore we are riding on the base. I am very confident the measures we have taken should take us beyond the bases also.
Percy Panthaki
That’s all from me. Sameer, thank you and all the best.
operator
Thank you very much. Next question is from line of Nihal Jam from HSBC Securities. Please go ahead.
Nihal Mahesh Jham
Yes sir. Sameer and team, good evening. Two questions from my side. The first is on the delivery dine in divergence that we are seeing. Even if I look at our dine in channel, we’ve obviously launched the 99 and the 149 value means there is a clear cut Case of value and all the other five aspects that you mentioned, other than the delivery charge being very much a part of the diamond channel also. So what is it that is driving such a big divergence in the two channels and if you say allocated to the delivery charge, is it that that has had the maximum impact among the five elements that you just highlighted right now?
Sameer Khetarpal
I think firstly eating at your home from QSRs, whether through a carryout or through delivery is a worldwide trend and aggregators have obviously accelerated it, Covid boosted it and consumers are looking to eat at home more and more. The QSR food which stands for value, so that trend is intact. So that is driving one of it. And then when it comes to delivery accuracy, delivery comfort, ease of ordering value that we give that these are underlying factors that is fueling the delivery. Right. So and if I want to, if I’m pressed for time and which is happening more and more in our cities, we are becoming more urban, more nuclear.
Right. Those trends, underlying demographic trends are there. That is what is fueling the delivery on dine in. Right. So the way I want to just correct the understanding over here, Nihal in humility see our on premise includes dine in and takeaway.
Nihal Mahesh Jham
Yes.
Sameer Khetarpal
So a customer can come in. Right. I want to eat there. Just eating at the restaurant is also growing at 20%. We don’t disclose dine in and carry out. Right. It’s the carryout business that is like because of free delivery has moved. Otherwise there was a incentive for customer to save 45, 45, 50 rupees when the delivery charges were there with free delivery. So I think I did give a little bit of a positive undertone on dine in. At least it is growing at a full system level. It is not declining. The reason is as we as the here the bases are actually helping.
Right. And but overall our dine in, trust me has been one of the best in terms of the customer input has been the best in the last three or four years.
Nihal Mahesh Jham
Understood. Just to clarify, you did say that leave apart the takeaway business which you’ve highlighted earlier, the dine in growth has been very strong, very close to what the delivery growth has been.
Sameer Khetarpal
Yeah, that’s correct.
Nihal Mahesh Jham
That’s very helpful. My second question was on I think only additional one store. Just thoughts on where that brand is in terms of. I know you mentioned that 100 store is the threshold where you start giving more data, but maybe the pace of addition was slightly lower. Where do you expect the store addition to scale up for the next for the Next full year and even on SSG specifically highlighting say south India, any comments on the rest of the country on the adoption of that brand.
Sameer Khetarpal
So I think the location strategy, product strategy leading with both dine in and delivery our own delivery, our own app. That strategy is very clear. I think the slower growth in the quarter is an aberration. We already entered Mumbai with three stores and we are building two more stores in Mumbai. So you will see the right, so we know where to open,100 150 stores. When we get the locations we will open the stores. So it is more about finding the location and negotiating on the rentals. And like, like I said, three stores in Mumbai are already open, two are under construction.
I am entering the quarter two with a, with a reasonably healthy pipeline.
Nihal Mahesh Jham
That’s helpful. Sonit, thank you so much.
operator
Thank you. Next question is from line of Aditya Soman from clsa. Please go ahead.
Aditya Soman
Yeah, hi, good evening and thanks for the opportunity. So two questions from me. So firstly I just wanted to understand this GM decline a little bit better because you indicated that you’re pushing the value agenda but I thought that the free deliveries now are completely should be in the base. And secondly even when I look at the free delivery we are seeing the packing charge for example has gone up almost fully offsetting that free delivery amount compared with what it was 2/4, let’s say 5 or 6/4 ago. So I just want to understand this gross margin decline.
And then the second question is just overall also in terms of profitability for the standalone business. If I look at the EBIT or Pat over a sort of two, three or five year period it’s basically we’ve seen no growth. In fact over a three year period it’s a sort of double digit decline in profit. How does one address this? Given that we’ve got very strong ssg, very strong top line numbers now but the profitability overall remains muted.
Sameer Khetarpal
Yeah, let me address profitability. I think you are seeing the effect of profitability in this like SSG in the profitability PAT has grown 30% ahead of the revenue. Right. So that is what we are also focusing on. And of course the SSG has to flow into EBITDA and Pat. Right. We are very clear about it. This is not a revenue business. So I hope that addresses, I hope you looked at that number and it should improve from here. We had given that over a three year period we should improve by at least 200 basis point on slanted on basis.
So that guidance remains. Actually to be very honest now the first question you had was on gross margin. So at least so I think the gross margin dilution is a result of three things. One is big, big PISA which was we knew dilutive exceeded our expectation by almost 2x. And the IPL it was supposed to be for a limited time in ipl we extended it for the full IPL and also the IPL also got extended because of the border conflict. So there was that effect. Second is we had launched chicken, chicken per se. We want to increase the salience of chicken there.
We have taken some calibrated price increases when we looked at the gross margin. And third is we want to grow lunch and the 99 rupee lunch is an outstanding proposition available only in dine in. So these are all very strategic interventions and these are sweating the assets. If lunch grows we have to, we have to dine in, we have to do lesser splits. So it is very well calibrated and you should look at pre India’s results. The second thing which we at least we look at internally not only the recipe cost or the food cost we also look at the supply chain cost that is to deliver to the store.
That is where we have seen maximum advantage. It is in fact one of the all time lows in our history. It is almost 50 basis point of tailwind that we are getting just from our commissary and logistics operations. So we are seeing the leverage. I will not look at just the recipe cost standalone and look at the overall picture. And yet and we are also working to improve several initiatives are there and we see an improvement trajectory in the last three months.
Aditya Soman
No, I understand that and thanks for the clarification on the gross margin. So my question actually was on the pat the net income was actually on sort of a three year or five year basis.
Sameer Khetarpal
So if I look at net income. Or EBIT because the interest cost has gone up. So if I disregard interest cost even the EBIT has declined at a CAGR of 11% on a three year basis while our top line has grown 11% CAGR. So I’m just trying to understand what has led to this decline and how that will improve because 200 basis points still won’t take it to what it was three years ago.
Suman Hegde
So let me answer that for you Aditya. So you’re absolutely right. There are two points which I want to draw attention to here. One at the points in time when the PAT was what it was is the gross margins that we used to make. I think over a period of time in the last few quarters we’ve Also said about where and how price sensitive the Indian consumer is. And we are seeing that across the board, right? I mean across not only the QSR industry. If you look at any consumer facing industry and in the environment that we operate in, in the competitive environment, we operate in much more competition than there was there three, four years ago.
Right. And when consumers are spoiled for choice, you have to be very, very efficient on your pricing. And some of those margins of the past were not sustainable margins if you want to protect your consumer franchise and you want to look at the long term value that you’re creating as a brand. So that’s one effect which of course now we are saying once we right size it, we will improve the margins. I think there was a question previously also on Percy’s End on saying how we’re looking at margins going forward. We will see this coming through because we know it’s an impact of mix and we’ve invested, deliberately invested behind giving value back to the consumer.
Looked at customer acquisition, put value back in delivery. So that’s one element which has impacted the path that you’ve seen in the historical three years back. If I compare it to the second one is the depreciation and we keep the interest cost out of it. But we have heavily invested behind capital investments on technology, on stores and as we have called out with a high investment cycle behind our supply chain assets which are commissaries to support the growth that we will see going forward. Some of the capacities we have invested in are going to last us for the next two to three years.
Of course the impact of that comes in the immediate in the depreciation line which is what also you have seen a significant increase increase over. But in the long term as this cycle we are getting off and we are getting off that cycle in FY26, most of the investments now will be on ROIs which are much better than manufacturing assets. It’s behind stores which have a two, two and a half year payback. It’s behind technology which is a faster turnaround which you are reflecting in the growth that we are seeing. We will see this improve.
So there are two elements just to summarize. One is of course the gross margins which we will now start inching up. But we did take a sharp dip on it which is I think the industry across industry was important to do to get the consumer back to the fold. And the second is depreciation which you will start seeing the leverage benefit flowing through if the growth momentum continues.
Aditya Soman
Thanks Suman. That’s very clear thanks for the detailed answer.
operator
Thank you. Next question is from Land of Vivek from Jeffries. Please go ahead.
Vivek Maheshwari
Hi, good evening team. Couple of questions. So first is on the delivery take away, you know what you mentioned Sameer. So the way in which you report, let’s combine it together. The last, you know, the previous quarter, fourth quarter, you almost, you know, came to 0 to 1% this quarter 3%. Do we expect this to, you know, or should we expect this to pick up as we go forward? Because one, of course the base is there plus the initiative that you have also been, you know, undertaking. That’s the first part of the question. And where do you think delivery plus, you know, takeaway settles in the medium term?
Sameer Khetarpal
Yeah. So I think the first question is yes, I think we are working while we execution on delivery will be the key try to service the demand. But shaping the demand on dining is something that we do very rigorously and a lot of efforts have gone in. I think you will continue to see the results in my opinion. So therefore from neutralizing to plus two and a half, 3% to 5, 6% is what we are internally targeting. Right. So it should improve. But the mix of there is a huge tailwind on delivery Vivek. The more supply we are able to create on delivery side, there’s enough and more demand with weather, vagaries with traffic, with consumers like habit changing with app with bank offers.
Just that this I think the growth momentum is there on the delivery side. So it is more we have to supply, be ready at the right point, at the right cost. I don’t know the answer to the question number two, to be very honest, the way I look at it is I want the customer to have a great choice with us. We should be available in all channels. Our own app should offer the best, most immersive pizza eating or pizza ordering experience. And our stores which are neighborhood stores will be like what maybe 60, 70 stores in Gurgaon alone.
So in that kind of a setup, if somebody wants to eat in take away, that’s how we are building the business and we genuinely want to shape the demands towards dine in because it is accretive to the accretive to the P and L.
Vivek Maheshwari
Right. And just a follow up. So let’s say deliveries today at about, you know, 73%. Where so basically if, let’s say this number goes higher and higher, does that need any change in, you know, you think you are the way in which you are building stores, the way in which, you know, you are staffing stores and so on and so forth. Or you know, in the medium term. You don’t envisage this number going up now from the level that we are currently today.
Sameer Khetarpal
Yeah, nothing. The, the. So we are, we are constantly monitoring. Right. So the 73% is a, is an average. Right. So there will be stores with 100% also. There will be stores will be less than 10% also. So, so there is a. So in urban centers are when we specially split a store, we try to go with a delivery and carry out store. This is about a 800-900 sq ft store. In rural areas or in tier 3, tier 2 we are opening a 1500 because there the dine in takeaway is like more than 50% or closer to 50%.
So we are already calibrating and we are seeing what happened two years ago. So at the moment, for example, if any property which is there more than 1500 square feet, we actually say no. Right. So we don’t want it. It doesn’t add value. We know the business ultimately will shift towards or customer preferences will shift towards dine in even in tier 2, tier 3 cities. So we are calibrating a lot of that and getting tighter on the property and the real estate that we ask.
Percy Panthaki
Got it.
Sameer Khetarpal
But we are not going to open, we are not going to open dark store. Right. So I just want to go on record.
Vivek Maheshwari
Okay, got it. And other things. Sameer, quite frankly, you know, every time that we are on the call there are a lot of questions on the margins. I think at least I totally appreciate the fact that you know, you are going after growth even if it is gross margin dilutive. At least EBITDA margin numbers are showing. You know, you know that you are building business from a, you know, with a medium term lens, if not long term. But just because there is so much of. Do you think on the gross margin side this quarter has been I think one of the lowest.
Do you think you are at the bottom on gross margins? That is first part to the question. And the second part is if you still have to dissect the let’s say 200 basis point decline at standalone level, how much of this will you say will be because of promotion versus let’s say new products which are margin dilutive.
Sameer Khetarpal
So I genuinely believe again I can be wrong, but I genuinely believe that this is an aberration. Right. And I do see margins improve. Gross margins improve. And having said that, I also want you to notice that our supply chain cost has been lowest ever. So actually the delivered food cost to the store is not as bad as what you are seeing just on the recipe cost. That’s one. The second is the almost 75% of the loss is coming from the new products that I spoke about. And I think the sales exceeded our expectation on all three of them.
And therefore we have gone back in chicken for example taken price hikes. So we are calibrating that. I don’t think they will go down any further. In my opinion they should ideally improve.
Vivek Maheshwari
Okay. And sorry, just one follow up. Why do you say there is an aberration in this line item?
Sameer Khetarpal
Because the. Because some of the changes having got together like. Like I said, like the Big Big Pizza exceeding our internal estimates. IPL getting extended. Right. And. And it didn’t like we were positively surprised by that Chicken for example in South India exceeded our internal targets. So for example in chicken we have gone back and corrected the price on Big Big Pizza. We are now actually we are re engineering the product to see can we get more gross margins so that how do we make it more efficient? Can we do few things in the factory? Can we make the store operation little more leaner? So those things are under works.
So that’s why I feel more confident. We know and then controlling like operations in stores. Right. As the throughput increases. So we are using technology to map the stores, to map the inventory. So lot of effort. In fact I’m personally spending enormous amount of time in digitizing our supply chain. So those are the pieces where the wastage delivery cost to stores, inventories, excesses. Those things I believe will come down which is also sitting in the gross margin pricing. I’m very wary. I just don’t want to go on record. Taking price increases is going to be very calibrated.
I’m going for growth and growth should give me leverage in the EBITDA lines.
Vivek Maheshwari
Love your strategy. Thank you and wishing you all the best.
operator
Thank you. Next question is from the line of Jay Doshi from Kodak. Please go ahead.
Jaykumar Doshi
Yeah. Hi. Thanks for the opportunity. My first question is, you know when you introduce Cheesy Volcano it was the introductory price was very attractive versus other products, similar products. Then you did the same with Big Big Pizza and you know the new Chicken Bus pizza. So when you actually roll back the introductory price or take price increases, do you see the same level of traction in these innovations or it tapers off. So that’s my first question.
Sameer Khetarpal
You are right. I think it’s a loaded question. So therefore a very intelligent question. I think consumers today are very savvy. Right. They Know where how to compare the prices. And AI is only helping them like get faster. Earlier they used to take seven minutes to compare across five apps and all the store. Now the AI is actually doing it for them. So price increases are going to be harder for the industry. And when we did take the price, we immediately saw the elasticity. Therefore the way we. Hello? Is this better?
operator
Yes, sir.
Sameer Khetarpal
Jay, can you hear us?
Jaykumar Doshi
Yes, yes, we can hear you now. Yeah.
Sameer Khetarpal
Consumers are very smart. They have more tools to do price benchmarking. Price increases have to be very calibrated, right. Very thoughtful, done in a scientific analytical manner with proper AB testing over at least 13, 14 weeks. So that’s what we do. In few cases like volcano pizza, we have taken price increases. In bigbig pisa, we did take price increase but we saw massive elasticity against us. So we will roll back where we have to, we have to change. But again the focus on gross margin continues and through more efficient use and smarter use of analytics to get more in the bank.
Jaykumar Doshi
Sure. One more follow up there. Is there any possibility for you to consider platform fees because food aggregators have now, you know, I am dead against that.
Sameer Khetarpal
I have seen this play out like almost 15 years of my life. Right. You do get a bump in one quarter, two quarter. Right. Our own app is growing for a reason, right. Because we kept it simple, we’ve kept, kept it unhidden price. It’s very easy to do it. Right. All of what you are suggesting, we can do it like tomorrow morning. It’s hard to build long term businesses that on customer trust where you’re tightening your own belt and not passing to consumption. So we are going in for that. That’s a clear strategy. But all the levels you are suggesting, we have it in our back pocket and technology is ready. I can roll it from midnight tonight, but we are not good.
Jaykumar Doshi
Sure, last one on purpose. Now at the investor day you indicated you need another three to six months to, you know, streamline a few things for Popeyes. And you know, your last week’s small interview on cnbc, you appeared sounded more confident. So could you give us sort of an update of you know, what progress Popeyes has made in the last six months and how do you sort of, you know, look, you know, at the expansion plans, growth, you know, from a slightly, from the next 12 months perspective.
Sameer Khetarpal
I think we made tremendous progress. In the last six months, five things have happened over there. Firstly, we have relentlessly focused on building the team. In fact, I would say what Domino’s team we did about Two, three years ago with splitting off regions, getting physical digital leaders we have replicated the same playbook even just with 60 odd stores. Second is ruthlessly focused on getting the delivery infrastructure. It’s very hard to do for a 60 stored network which is a patchy coverage even in the city. So we’ve gotten that piece and we have combined it with the domino’s team which which does this like 40,000 riders in a day at scale and we are building more and more technology to combine it.
So that is number two thing we have done, we have fixed delivery. Third is I personally spend time with the 60 restaurant managers every quarter telling them what is important along with, along with the leadership team, we train them. We are building the business in a very like a startup like more. And fourth is the fourth is the getting the getting the unit economics. Right. So a lot of effort has gone in on measurements, food cost, a lot of capex reduction, supply chain capacity, build up automation in supply chain. So I feel very confident that and now we are beginning to invest in marketing.
So take for example we were very under indexed on buckets and we’ve gone back and fixed that. We fixed the core value proposition. How will we differentiate as a brand in this cluttered market and stand for the most loved chicken? So for those pieces we have worked and we will see a lot of compounding happening over there.
Jaykumar Doshi
Thank you so much and wish you the best, very best.
operator
Thank you. Next question is from line of Manish from Invesco Asset Management. Please go ahead.
Manish Poddar
Sameet, thanks for doing the call. Just one question. You know you all are doing well despite the macros given the multiple interventions which you have done. If you can help me understand either qualitatively or quantitatively, you know, how is our brand relevance on aggregators? Now that’ll be useful to understand how would it stick around when we reduce incentives or promotions. Thanks.
Sameer Khetarpal
Firstly, the relevance of aggregators and our own digital assets is for the customers wanting reliable delivery, right. And options. So that is where we come in and that is one big tailwind and operational advantage we carry in our business. So therefore we work very well with both the aggregators overall. We believe as we do Mark to market our own estimates, we believe we are gaining share and we want to be there wherever customers are. So if the aggregators are launching new deals, properties, new separate delivery options, we want to be there. So we are looking at the customer, where the customer is and following the customer versus trying to say customer should come to me on this channel with this kind of proposition.
Manish Poddar
Sameer, would you have some data to, you know, I’m just trying to understand, let’s say when you say market share gain, you know, within the category or at a broader level, you know, or top 10 cities, any sense, you know, how would our shares stack? Let’s say what, what it was, let’s say 12, 18 months back versus today.
Sameer Khetarpal
Actually internally we do, I don’t want to share the numbers but when you look at like even the listed QSR then and look at the, the growth, right? Revenue growth, you will get it right yourself. So it’s very easy to do. But we do have, we have a more scientific approach where we also go to unlisted pizza players. We obviously get market share information from aggregators. We overlay our own internal data. So I think you will be very positively surprised. 20% like, for like growth in delivery alone will give you that we are gaining share.
Right. That is I think the single biggest data point.
Manish Poddar
And sorry Samijust if I have to think about. When you think about incentives, these are not, let’s say you know, higher margins to the aggregators but more consumer incentives. This is what. So when you plan to, you know, it’s more targeted advertising or targeted promotions which will reduce over a period of time rather than, let’s say negotiate harder with aggregators because having higher share in their channel. I’m just trying to understand from a gross margin picture.
Sameer Khetarpal
Gross margin has nothing to do with aggregator, channel or anything. Right. So gross margin that you see is the price we get for an order and the food cost for that order, irrespective of where it comes from. So there’s nothing to do with aggregator negotiation or anything. We work very well with aggregators. We want to deeply partner with them on all their programs. We believe they’ve built a strong franchise and we continue to invest our own technology, our own stores. It’s quite complementary in my opinion.
Manish Poddar
Okay, thank you.
operator
Thank you. Next question is from the line of Aditya Vikram from DB Securities. Please go ahead.
Aditya Vikram
Hi, I’m Audigar.
Sameer Khetarpal
Yes, hi.
Aditya Vikram
Thank you very much. And it looks like a good job done. I had just one question. To the point which Suman was making. You said most of the technology investments are now writing benefits or will start writing benefits in short period of time. Right. What would be an idealistic impact on the gross margin as such?
Suman Hegde
Sorry, the. What benefits?
Aditya Vikram
Technology. The technology benefits. What would they transpire into? Right. You said in next few quarters we will start seeing the impact. So I just wanted to quantify it.
Suman Hegde
So, okay, there are Multiple areas where technology is being deployed. And you will see the implications if you want to specifically understand because technology on store operations that we do will of course reflect in better employee cost productivity. So it will appear below the gross margin line. If you talk specifically of gross margin, where is technology being deployed? We have better conversions on our app, right? And because of the app interventions that we are doing in terms of consumer cohorting information that we get in terms of ensuring that there’s a good uptime for consumers cross selling that happens if you go into our app today, you’ll see multiple options where we’ve adjusted things to help cross sell upsell more targeted discounting which is done basis on where the consumer cohort sits in a particular location or in a particular region.
So all of that helps us do better smart pricing, better discounting and better conversion of consumers. This is what will reflect in your gross margin line. But there’s also technology investment going on behind store operations getting better behind our own delivery management system which ensures that we get good delivery executives onto the portal which ensures that we can deliver against our docked delivery on time promise. All of that will reflect into our below gross margin but above EBITDA line. So that’s the various kinds of technology but specifically on gross margin you will see it in better and more smart pricing, better and more targeted discounting and better conversion happening because of the app export experience for the customer.
Aditya Vikram
Okay, but you still won’t be able to quantify it as to how much will our gross margin improve now that we are not going to do a lot of technology investments, correct? Or do you have some sort of an estimate but you don’t want to call out?
Suman Hegde
No, Aditya, I think one is technology investment called out. It goes investment will get depreciated which will go below the EBITDA line. So it will not come that improvement of lesser investment in technology will not go. And we do not intend to invest lesser in technology. We only expect to get better returns on that investment that we do in technology. Right. Which will reflect in the gross margin line. But the technology investment steps in depreciation which goes below the EBITDA line.
Aditya Vikram
No, no, no. I understand the EBITDA line. I was just trying to understand that what would be the impact on the revenue and everything. But based on everything which you suggested and less. Right. Okay. So my question is again Sameer, you mentioned that you are very cautious or you will only take calibrated price rises because of how the Indian consumer is, right? Is there any sort of experiment done on reducing this price, we’re basically.
Suman Hegde
Sorry Aditya, your voice is breaking up.
operator
No sir, your audio is still breaking.
Aditya Vikram
Give me one single. Any better? Alice? Yes, please add it everyone.
Sameer Khetarpal
Yeah.
Aditya Vikram
So this question was specifically to Sameer. Sameer, you said you want to take a very calibrated and cautious approach. Approach when it comes to price increases. Right. And you have seen, I mean one of the participants who was trying to understand that what is the traction whenever you increase the prices. I just wanted to understand from the management perspective that are you all guys doing any experiment on the big size PISA where you are reducing the size because these are highly margin diluted. Is there any sort of experiments or any sort of work going on that front as well?
Sameer Khetarpal
So I think the firstly the big pizzas come with big ticket size and therefore give more leverage on the cost below gross margin lines including delivery. So therefore at a percentage terms it may be dilutive but absolute terms it is accretive. So that’s one piece to keep in mind. Right. So second is, is again in this environment we want consumers to get more food, get more satiated and come back. And we are seeing that consistently. Right? It is, I mean, I mean just anecdotally I’m sharing you like my peers in the industry and many customers that I know will catch hold of me on a bus station or a rail station or a.
And say the big, big Pizza is such an outstanding innovation. So again the idea is to grow the business, franchise it. At the same time we are running almost 30 experiments as we speak on taking calibrated pricing. There are 30 initiatives being run to reduce cost. It is not about putting less cheese though. It is about can we get better at storage of cheese, can we do better buying of cheese, can we do better procurement of oil, can we reduce localization of corn? So I think those are the initiatives we are focused on and there are several such initiatives and I’m confident the opportunity continues to exist.
Plus this top line growth is giving us leverage in rentals. It is giving us leverage in the G and a cost. So I remain very confident about the margin trajectory also and I’m not too concerned about it. Again, on pricing, like I said, we are going in for growth. It’s very easy to take whatever you are suggesting. Add convenience fees, increase pricing, increase packaging charges. But we are not doing it.
Aditya Vikram
Okay. Okay. Thank you very much. Sameer. I just have one feedback for you and your team if you can. I myself am a Domino’s customer and we do order it for various of our friends as well. I think most of the number which are listed online for your stores are either inaccurate or don’t work. So if you can work and it causes a lot of frustration when you’re actually ordering in between again and you’re waiting for a very long period of time. So if you can work with your team to ensure that the numbers which are listed on Google and your apps are at least accurate and can ensure that we reach these stores that probably will reduce some amount of frustration and cancellation also.
Sameer Khetarpal
Yeah my firstly my sincere apologies for the poor experience. We are on it. I think hopefully AI will take over and then we will not need the any intervention. That’s what we are building but in the meantime please do to like if you can drop us an email where it is we’ll correct it in like.
Suman Hegde
We are already working on it but thanks for the feedback. It is very valid but we are working on it. Yeah thank you.
Aditya Vikram
For the near future.
operator
Thank you. Next question is from the land of Sheila Rati from Morgan Stanley. Please go ahead.
Sheela Rathi
Thanks for taking my question. So my first question was Sameer with respect to the respect to the competitive landscape just want to understand how the trends are and especially from the point of view of which are the area. We have a lead on a lot of areas be tech be it delivery be it you know the whole innovation. Are we seeing any catch up game being played by competition and any specific area you want to talk about. I know you talked about the market share gains in the recent quarters but anything in specific if you would like to call out.
Sameer Khetarpal
I think there’s nothing I think we are Sheila we are more internally obsessed with our customers than looking at competition. Of course we do benchmark our sales, our metrics. There are teams do it so that the customers eating at Domino’s or shopping at Domino’s they get the best value and the best experience. So those things we do I think I will talk more internally that I think we have a huge pipeline of building product platforms. We continue to invest in cheesy platform as we call it. So therefore meat burst pizza, non vegetarian pizzas. You’ll continue to see that growth.
Huge opportunity to capture lunch. Our late night delivery has grown at a very fast it has in fact doubled in last nine months. So we see great both customers looking for innovation in menu day parts and occasions like Rakshabandhan and Independence day and Friendship Day. Those we are like we are very very like bullish about the opportunity that exists with us. I only wish we can execute faster. Right so the demand Is there.
Sheela Rathi
Understood. Second question and the final one, you know, you did mention about, you know, we are not looking to open dark stores. But you know, when I look at the Delivery numbers, I.e. 70, 73% of revenues now. And you did say that in smaller towns, dining is over 50% in some parts. So just want to understand in metros and tier one cities is the delivery share much higher and is there a case to have, you know, smaller size stores or we still think that we will continue with the kind of stores we have been opening in the past?
Sameer Khetarpal
I think it’s horses for courses in smaller and in the larger cities like Mumbai and Gurgaon and Delhi, we tend to open smaller stores unless or until it’s a virgin area, which are very few in these cities or it’s a mall, for example. So we do tend to open smaller stores in these cities which are more delivery centric. Right. But if a customer walks in, wants to eat, right. Should get a comfortable air conditioner and a table and a chair to sit very functional. So we don’t penalize that somebody wanting to come in the store has to find the store.
And I think a lot about food is also seeing the food being made. So that generates trust in the brand. Right. And versus doing 10 brands from a dark store. So we are very clear on that one. The ROIs have to work and when we give a store approval, genuinely validate how much dine in and carry out sales will be there on that basis, we decide the store store sizes have come smaller, I would say have become smaller in large cities. That calibration is an ongoing one.
Sheela Rathi
Sameer, if you could remind us what is that number now from a square feet basis, about 800.
Sameer Khetarpal
Like see mostly when we split a store in large or urban centers, we go in for 800-850-store maximum 1000. Right. We don’t go definitely beyond 1200. Right. While like I said in tier three, tier four, we do want to give 40 to 50 covers because there is demand for dining in those cities. So our standard size is 1200. It has actually gone a little lower than that between 1100 and 1200 in last, last 24 odd months. So. So we are constantly calibrating that.
Sheela Rathi
Understood. Thank you very much, Sameer.
Sameer Khetarpal
Thank you.
operator
Thank you very much. Next question is from the line of Latika Chopra from JP Morgan Chase. Please go ahead.
Latika Chopra
Yeah. Hi. Hi Sameer. Few questions from my side. I think the first one, just taking on from calibrating store sizes, I just wanted to get a sense on Capex for you. In FY26 I heard someone mentioning much of the chemistry led capex is likely behind us. If you could give us some color on what kind of efficiencies are you building on the capex front? That’s the first question.
Sameer Khetarpal
You want to take that on add ins Sorry Latika.
Suman Hegde
Just to understand are you asking about how the capex overall capex spends of the company will look in the years going forward or you are specifically asking about store capex efficiency?
Latika Chopra
If you could comment on the overall capex how you are looking at it for the medium term.
Suman Hegde
We are coming off a high cycle of supply chain commissary capexes like we said but we do plan to accelerate our pace of increasing the number of stores that we open. If you recall from our investor day also we said that the plan is because we believe there’s potential in the country to open the next thousand stores in the next three years which will mean that there will be a higher amount of capex which will now swing towards store openings. We’ll continue to invest behind the technology and of course the operations on the ground to get the back end infrastructure be it in terms of our ERP systems, our processes, supply chain transformation.
But more tech and store opening related capexes will be where it will happen which means your return on capital employed should technically go up because the payback cycles on these investments is better. So that’s the way we are looking at our capex spend. So it will not be a dramatic recalibration or significant decrease in the capex cycle that we see over the next two, three years but the portfolio or rather the profile of the capex which will get spent will be different and will be more faster and higher revenue generating or return generating capexes and suman.
Latika Chopra
At a store capex level how should one think about on a per store basis an average capex?
Suman Hegde
So we don’t really comment out on how much we spend because again that can vary depending on the size and place of the store Latika but let me just give you some numbers in terms of percentage over the last three years. Consistently we are seeing that number come down like almost every year we see a 10 to 15% drop on the amount that we spend on the capex coming predominantly from scale and as we get better on what technologies we use. And the other vector that we really are looking at now is saying how much of the capex do we put in and how much can we get the landlords to invest behind which also is a key area for us, it improves the ROI for us or the payback on our store and also brings down the amount of capex that we spend per store which means we can open more stores with lesser amount of money.
Right. So I don’t want to comment on a number because numbers can vary but.
Latika Chopra
Sure, that’s the way over the last, you know, three years on a standalone basis I think you’ve spent on an annual basis 700 to 800 crores per annum. So I was just wondering if the heavy commissary capex is behind us and you know this absolute numbers on annual basis could probably moderate. So I think that was what I was trying to gauge.
Suman Hegde
Yeah, it will moderate to some extent but like I said, won’t be a material moderation because I’m just renting, calibrating it from supply chain commissaries to store.
Latika Chopra
Understood. Capacity supply to those stores.
Suman Hegde
Right. So now I need to also generate the return, the generate the demand to ensure I can leverage the supply chain capex which I think is the right thing to do in the medium to long term.
Sameer Khetarpal
Yeah, understood.
Latika Chopra
The second bit was, you know, in FY25 I think if I recollect correctly, the drag from losses from emerging formats was about 200 basis points and I saw you mentioned that Popeyes has seen sequential improvement in profitability. So how should one think about this drag? How materially can it moderate in coming years?
Suman Hegde
So in the next, I think again something we have mentioned, the next couple of years we are looking clearly that this drag will come down substantially, at least half the drag in the next year or 12 to 18 months. That’s the plan. While we continue to invest behind the Popoise business, but on both the other two brands we are materially bringing it down by improving unit economics expansion. As you can well see in the numbers we have come out with have almost come down to a trickle or stopped. So that’s the way you can calibrate it.
We are looking at over the next two years to at least halve the drag that we are currently seeing on the overall JFL margins.
Latika Chopra
Understood. Useful. Thank you so much.
Suman Hegde
Thank you Latika.
operator
Thank you very much ladies and gentlemen. That was the last question. On behalf of Jubilant Foodworks Ltd. We conclude today’s conference. Thank you for joining us and you may now disconnect your lines. Thank you.
Sameer Khetarpal
Thank you, thank you, thank you.