BENGALURU (Reuters) -Jubilant FoodWorks, Domino’s Pizza’s Indian franchisee, reported a near two-fold increase in first-quarter profit on Friday, as value meals attracted budget-conscious customers.
Consolidated net profit rose to 558 million rupees ($6.65 million) for the quarter ended June 30, from 289.2 million rupees a year earlier, it said in an exchange filing.
Persistently high inflation has been prompting consumers to pare back spending on dining out or ordering in. India’s retail inflation hovered around 5% throughout the quarter amid high food prices, increasing cost pressure on the quick-service restaurant sector.
To spur demand Jubilant offered free home delivery and value deals such as meals for 99 rupees ($1.18), in a quarter that coincided with the T20 Cricket World Cup and school summer vacations.
Jubilant’s revenue from operations rose 45% to 19.33 billion rupees in the quarter.
Its like-for-like sales – a key same-store sales metric – at its Domino’s stores grew 3% during the quarter, compared to a de-growth of 1.3% a year ago.
The company’s costs rose 34%, as prices of essential ingredients such as vegetables, chicken and cheese rose.
Higher costs and the waiver of delivery fees dented Jubilant’s margin. Its earnings before interest, tax, depreciation and amortization (EBITDA) margin contracted to 19.3% from 21.1% a year ago.
Burger King’s India operator Restaurant Brands Asia posted a narrower first-quarter loss as offers and discounts swayed customers. Meanwhile, rival Sapphire Foods India and Westlife Foodworld reported a bigger-than-expected decline in profit amid frail demand.
Jubilant’s shares closed 0.3% higher ahead of the results.
($1 = 83.9250 Indian rupees)
(Reporting by Ashna Teresa Britto in Bengaluru; Editing by Eileen Soreng)
