# 1. Financial Performance ## A. Key Figures * **Revenue:** **₹24.4 Bn** consolidated (+13.3% YoY) · **₹18 Bn** India (+11.8% YoY) * **EBITDA Growth:** **+20%** YoY consolidated · **+10%** order volume growth India * **EBITDA Margin:** **+110 bps** YoY expansion (consolidated) · **+120 bps** sequential pre-Ind AS India * **PAT Growth:** **+27%** YoY stand-alone · **+94%** YoY consolidated (before exceptional items) ## B. Revenue Growth * **Broad-Based Expansion:** Revenue growth across all segments and geographies, underpinned by robust domestic performance and **10% order volume growth** in India. * **India Momentum:** Domestic business outpaced group growth, with **8% revenue increase** driven by volume gains and pricing discipline. ## C. Profit Margins * **Margin Resilience:** Gross margin improved **52 bps sequentially to 9%** in India despite inflationary pressures in key commodities. * **Value-Driven Mix & Pricing:** Margin expansion fueled by **mix improvement**, **pricing recalibration**, and **efficiencies from new product launches**, not volume alone. * **Operating Leverage in Action:** G&A efficiencies achieved via **AI deployment**, **technology integration**, and **disciplined headcount management**. * **Domino’s Margin Context:** Domino’s EBITDA margin currently at **3%**, down from historical highs, with FY25 full-year view expected post-Q4 for accurate assessment. --- # 2. Store Expansion & Capacity ## A. Key Figures * **New Stores:** **114** added in Q3 · **~3,600** total network size (**~2,530** in India) * **Domino’s India Expansion:** **200** stores in first 9M FY26 (**75** in Q3 alone) * **Capex Range:** ₹700–850 Cr annually (Domino’s, recent years) ## B. Expansion Strategy & Momentum * **Accelerated Rollout:** Unprecedented store addition pace, with **AI-enabled site selection** and a **pipeline of 1,000 identified locations** driving efficient scaling. * **Prime Location Focus:** Strategic push into high-traffic hubs—**schools, colleges, airports, railway stations**—to capture incremental demand and enhance visibility. * **Favorable Unit Economics:** New stores feature **lower capex and higher year-1 throughput**, supported by optimized footprint and **anchor tenant advantages** in rentals. ## C. Store-Level Efficiency * **Delivery-Driven Design:** **75% delivery mix** enables smaller store formats, reducing rental costs and boosting unit-level rental efficiency across city tiers. ## D. Capital Allocation & Capex Outlook * **Capex Discipline:** Supply chain investments have peaked, but **no significant reduction in overall capex** expected due to reinvestment in store network and recalibration. * **Forward Guidance:** Annual store capex for next fiscal to be communicated in final quarter, aligning with established planning rhythm. --- # 3. Brand & Segment Performance ## A. Key Figures * **India Business:** Double-digit YoY growth · EBITDA margin +109 bps YoY * **Popeyes:** High double-digit LFL growth (2nd consecutive quarter) · 73 stores (+5 in quarter) * **Turkey:** Double-digit YoY growth · 33 new stores (15 Domino’s, 18 COFFY) * **Sri Lanka & Bangladesh:** High double-digit quarterly growth · Improved margins ## B. Domino’s India * **Sustained Momentum:** Positive LFL growth for **eighth consecutive quarter**, reflecting resilient demand and operational execution. * **Strategic Challenge:** Focus on increasing pizza consumption frequency from **3 times per year**, targeting incremental meal occasions against everyday Indian foods like **bhatura chana and dosa** within the **$60 billion food services market**. * **Store Experience Revamp:** Reevaluating dine-in and takeaway strategy to build a differentiated in-store proposition, leveraging **high store penetration and proximity**. ## C. Popeyes Growth * **High-Growth Vector:** Popeyes reinforces status as key growth driver with **strong double-digit SSG for three consecutive quarters**, including **record-high growth in latest quarter**. * **Model Maturation:** **70–80% of operational model optimized**, with clear progress in ADS, gross margins, and profitability; targeting **industry-par or better margins** for scalable rollout. * **Expansion with Discipline:** Growth to **~100 stores by Q1**, when Popeyes will be reported as **separate segment**; financial transparency to follow, supporting **sustainable, non-land-grab expansion**. * **Product & Performance Integrity:** **"The bun never leaves our hand"** ensures quality control; **flavor burst burgers and 15-piece bucket** well-received, fueling repeat traffic. * **Growth Contribution Outlook:** Expected to deliver **1–5% of overall growth** near-term, with potential acceleration; **standalone ambition of 15% growth** under discussion. ## D. International Operations * **Turkey Strength:** Solid financial performance with **dividend payouts funding JFL’s acquisition debt**; now **fully self-sustaining via internal cash flows**. * **Sri Lanka & Bangladesh:** **Impressive top-line and bottom-line trends**, with **high double-digit growth** signaling strong regional momentum. --- # 4. Customer & Channel Trends ## A. Key Figures * LFL Sales Growth: 5% (YoY) on 12.5% prior-year base * **Revenue Growth:** **14.3%** FY25 standalone · **15.1%** 9M FY26 * **Industry Outperformance:** **+3% to +4%** vs. estimated sector SSG decline of **3% to 4%** * **App Engagement:** **>20%** YoY growth in monthly transacting users (each FY26 quarter) ## B. LFL Sales Growth * **Sustained Momentum:** Robust LFL growth maintained over eight consecutive quarters despite tough comparisons, driven by product innovation and free delivery. * **Market Leadership:** Company continues to outperform a weakening QSR sector, underscoring brand resilience and pricing power. * **Mature Store Strength:** Record-high mature store average daily sales reflect operational efficiency and enduring consumer preference. ## C. Delivery Mix * **Delivery Dominance:** Strong double-digit growth in delivery channel, now the primary engine of expansion, while dine-in and take-away remain challenged. * **Channel Shift Confirmed:** Post-pandemic consumer behavior has permanently pivoted to digital, with company-owned app surpassing physical channels in new customer acquisition. * **Digital Flywheel:** Most dine-in and takeaway customers transition to online ordering after first purchase, reinforcing the strategic value of app engagement. ## D. App Engagement * **Accelerating Adoption:** Monthly transacting users on proprietary app growing over **20% YoY** for four straight quarters, signaling deepening digital stickiness. --- # 5. Product & Menu Innovation ## A. Key Figures * **Product Launch Impact:** **Accretive to gross margin** · **contributing positively to margins** ## B. New Product Launches * **Strong Consumer Response:** New launches like **Sourdough Pizza** and **Cheese Lava Pull Apart** scaled rapidly, reflecting successful innovation and **enhanced product mix** strategy. * **Expanded Product Range:** Popeyes rolled out **6 saucy chicken wing variants** and **7 Flavor Burst sandwiches**, deepening menu appeal and differentiation. ## C. Pricing Strategy * **Margin-Driven Pricing:** Implemented **calibrated price increases** on select items to optimize profitability and steer customer mix toward premium offerings. ## D. Menu Localization * **Localization Over Global Playbook:** Shifted from U.S.-centric flagship stores and menu assumptions (e.g., biscuits) to **India-specific formats and offerings**, improving capital efficiency. * **Supply Chain & Quality Edge:** Built **in-house supply chain** for **fresh, antibiotic-free chicken**, reinforcing brand trust and operational control. * **Flavor Differentiation:** Leveraged global **Cajun seasoning identity** while adapting flavors to local taste, creating a unique positioning against competitors. --- # 6. Monetization & Digital Initiatives ## A. Key Figures * **Active Clients (Post-Order Ads):** **>10** in the quarter * **Monthly Active Users (MAU):** **15–16 million (1.5–1.6 crore)** * **Customer Order Frequency:** **3x per year** * **Stores in Bangalore Campaign:** **70** ## B. Post-Order Advertising * **Monetization Momentum:** Post-order advertising gains traction with double-digit active clients and high engagement, signaling early success in unlocking digital revenue. * **Strategic Discipline:** Monetization is deliberately confined to post-order to preserve a **friction-free, 3–4 click ordering experience** and **20-minute delivery promise**, deemed sacrosanct. * **High Engagement & Premium Partnerships:** Recent experiments post-Diwali attracted top-tier brands like **Flipkart Minutes, Tata Neu, Amazon Fresh, and Apple**, exceeding expectations in both quality and engagement. * **Long-Term Revenue Aspiration:** Management envisions **three-digit crore ad revenue** over time, with confidence in achieving **at least 1% of total revenue** from this channel, though not in the near term. * **Platform Differentiation:** Unlike modern retail models, the company focuses exclusively on **post-order advertising**, rejecting pre-order monetization and direct-click ads, making comparisons to other ad models inaccurate. ## C. Platform Partnerships * **Popeyes App Launch:** Popeyes is rolling out a dedicated, immersive app aimed at becoming the **most engaging global platform for burger and chicken**, targeting loyalty and premium pricing. ## D. Tech-Driven Targeting * **AI & Targeting Edge:** Technology and AI investments are yielding measurable returns, enabling **zip-code-level customer targeting** and **cross-platform cohort engagement**—a **unique capability** in India. * **Superior ROI on Tech Spend:** Tech investments are prioritized over supply chain due to **faster paybacks and higher ROI**, reinforcing focus on digital infrastructure. * **App Ecosystem Realism:** Management acknowledges structural limitations in standalone app adoption, noting that **consumer preference for multi-brand platforms** (40–50 brands) limits direct engagement, with **dark kitchen apps also showing minimal traffic**. --- # 7. Risks & Margin Pressures ## A. Key Figures * Rental Expense: 7.4% of revenue last year → 7% in 1HFY26 * **Labour Cost Impact:** **10–15 bps** estimated upper-limit pressure from new Labour Code * **EBU Margin Drag:** **230–250 bps** currently, expected to **halve** over time ## B. Dine-In & Financial Resilience * **Dine-In Lags Despite Pricing Actions:** Dine-in performance remains below expectations despite **calibrated price increases** and menu repositioning, with improvement not yet materializing. * **Turkey Cash Flows Fully Cover Debt:** Acquisition-related interest obligations are **100% funded by Turkey’s cash flows** for the past three quarters, shielding India’s financials. ## C. Labour & Cost Structure * **Controlled Cost Inflation:** Employee expenses rose only in line with regular increments, with **no extraordinary cost spikes**; Labour Code impact expected to be minimal. * **Margin Recovery Pathway:** Gross margin focus has shifted from growth investment to **product innovation and cost optimization**, targeting halving of EBU drag. ## D. Competitive & Structural Dynamics * **Market Share Defense via Pricing:** Matched competitors’ **Rs. 99 minimum order value** to protect delivery share, indicating tactical responsiveness in a competitive landscape. * **Rental Leverage Is Real but Marginal:** Lower lease costs reflect **delivery-centric shift and scale benefits**, though contribution to **90 bps EBITDA gain is limited**—not a primary driver. * **Structural Margin Advantage:** Fried chicken peers exhibit **inherently lower margins than Domino's**, affirming format-level profitability differentiation even at scale. * **Stable Royalty Terms:** **No changes expected** in Domino's royalty rates; terms remain favorable with strong brand partnership continuity. --- # 8. Guidance & Outlook ## A. Key Figures * **LFL Growth Guidance:** **5% to 7%** (current outlook) · **8% to 9%** potential upside * **Top-line Growth Target:** **~15%** overall * **Margin Target:** Approach **15% pre-Ind AS margin** · **200 bps EBITDA margin expansion** above FY'24 levels * **Store Expansion:** **1,000 stores** in next 3 years · **5,000+ store** long-term target * **Chicken Brand Vision:** **250 stores** and **₹1,000 Cr revenue** medium-term goal ## B. LFL Growth Forecast * **Confident Growth Trajectory:** Management views **5% to 7% LFL growth** as achievable despite volatility, underpinned by expanded market share across pizza and adjacent categories like bowls, chicken, and burgers. * **Upside Potential:** Sustained industry demand recovery could lift LFL growth to **8% to 9%**, contingent on broader QSR same-store growth reaching **2% to 3%**, driven by brand strength and operational execution. * **Multi-Decadal Opportunity:** Growth will be fueled by both **LFL improvements and white-space expansion**, with India representing a large, long-term runway for scaling. ## C. Margin Expansion * **Sustained Margin Improvement:** Gross margin expansion expected to continue into FY'27, driven by **innovation-led mix accretion** and cost discipline. * **ROCE Enhancement:** Focused investments in **technology and high-throughput stores** are expected to lift return on capital employed. * **EBITDA Leverage:** Margin expansion of **200 bps above FY'24 levels** remains on track, with Domino's margin performance being a key contributor. ## D. Long-Term Store Target * **Aggressive Scaling Ambition:** Company is building a **5,000+ store business**, having completed only **~10% of its growth journey**, signaling a long runway for expansion. * **Capital Efficiency Maintained:** Despite **1,000 new stores** planned over three years increasing store-level capex, overall capital spending is expected to remain stable. * **Strategic Brand Building:** Aims to become **India’s most-loved chicken brand**, targeting **high profitability** at scale, with clear milestones of **250 stores and ₹1,000 Cr revenue**. * **Franchise Clarity Achieved:** Renewal of **Domino’s franchise agreement** provides stable, predictable royalty terms with no anticipated medium- to long-term fluctuations.