Shares of listed quick-service restaurant companies are in high demand; they rose by up to 5% on the BSE in Monday's intraday trade after Jubilant FoodWorks (JFL) published a solid business update for the quarter ending December 2024 (Q3FY25).
Domino's operator JFL's shares rose 5% on heavy activity to a new 52-week high of Rs 796.75. Since December, the stock has increased 24 percent. The firm has a strong portfolio of brands in emerging nations, with franchise rights for three worldwide names - Domino's, Popeyes, and Dunkin' Donuts - and two own-brands, Hong's Kitchen, an Indo-Chinese quick-service restaurant (QSR) brand in India, and COFFY, a café brand in Turkey.
Shares of Devyani International (DIL), the largest franchisee for Yum Brands (KFC and Pizza Hut), rose 6% to Rs 202.20 on the BSE, owing to a 1.5-fold increase in typical trading volumes.
DIL is also the exclusive franchisee of the Costa Coffee brand and outlets in India. In addition, DIL caters to South Indian vegetarian food aficionados through Vaango, which was created over a decade ago, and is a well-known brand in the food retail business (FRB) category through its food courts. DIL has a large presence in India's airports, where it provides a variety of food and beverage options.
Shares of Sapphire Foods India, a top YUM franchisee operator in the Indian subcontinent with operations in India, Sri Lanka, and the Maldives, have risen 5% to Rs 366.30. Restaurant Brands Asia (RBA)'s stock price rose 3% to Rs 85.75 on the BSE in intraday session today. In comparison, at 10:29 AM, the BSE Sensex was down 0.05 percent at 79,185 points.
In Q3FY25, JFL reported a 56.2% year-on-year (YoY) increase in consolidated revenue from operations to Rs 2,153 crore. Domino's India experienced 12.5% like-for-like growth during the quarter. At the conclusion of the quarter, the Group network had grown to 3,260 stores, with a net addition of 130 locations.
JFL runs on a unique commissary model, giving it a distinct competitive advantage. Because its purchasing function is centralized and it purchases a high number of ingredients (such as cheese, sauce, and pizza boxes), JFL may use its size to negotiate better pricing with suppliers. Furthermore, CRISIL Ratings reports that centralized procurement, warehousing, and distribution of raw ingredients, as well as dough ball manufacture at commissaries, reduce storage space, allowing the company to reduce store operating expenses.
