Thread by @jshilanjanm

An avg @dominos_india outlet does the same sales today, as 4yrs ago. It has no option but to keep adding new stores ⚡⚡

I deep-dive into the numbers of #JubilantFoodworks. This is what I learned 👇

The company operates multiple chains like Dunkin' Donuts, Hong’s Kitchen, Popeyes, Ekdum Biryani etc, almost all its business comes from Domino’s outlets in India.

That’s a mature biz & I studied its numbers for last 4 years.

No. of outlets:
🍕 1.8k | 56% up 👏
🍕 It has an avg of 4.5 outlets per city, and this number has been within 4.3-4.7 range since forever

No. of cities:
🍕 387 | 46% up 👏
🍕 It has significantly expanded into the Tier-2 and beyond markets
🍕 It has done so while maintaining enough outlets to ensure a guaranteed 30 min or less delivery time in each city

Employee expenses per store per day:
🍕 Rs 15.5k | 0.2% down | Almost flat! 👏
🍕 Significant pre-processing of raw materials & food has helped reduce the tasks for employees at the outlets
🍕 For employee expenses of Rs 100, it now earns Rs 570- 14% more than it did 4yrs ago 🫰

Raw material expenses per store per day:
🍕 Rs 20.4k | 1% up | Almost flat again! 👏
🍕 Increased pre-processing has helped bring down wastage
🍕 This has helped keep raw material expenses flat despite much inflation in milk & wheat prices, which directly impact margins

Revenue per store per day:
🍕 Rs 83.1k | 2% up 📛
🍕 This has stayed almost the same as 4yrs ago

Revenue to Raw material costs ratio:
🍕 4.08 vs 3.92 before (Almost flat, once again)
🍕 Always been in the 3.9-4.7 range

1st Learning 👉

To grow revenues, it is a must for it to keep adding new outlets in locations, where it can quickly hit that ceiling.

🍕 Raw material costs can’t be optimised beyond a point
🍕 Same for employee expenses

Hence, the only recipe for growth-
New outlets

This is why the company is pursuing a mid-term target to open 3k new outlets 🚀🚀

2nd Learning 👉

Margins are not shrinking due to rising milk & wheat prices.

🍕 The shrinking margins are more about the serious scale-up of the expansion
🍕 The rate at which it is opening new outlets & entering new cities has gone up, means upfront expenses

And we now know the reason behind this big expansion-

Cuz, that’s the only way the company can grow revenues & profits 😅

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PS: I actively write about the Indian economy, startups & stock market. If interested, do follow. I share a post everyday at 8.30am ⚡

#Dominos #JubilantFoodWorks #Stocks #IndianStocks #StockMarkets #Business #Management #QSR

@aditya_kondawar @AdityaD_Shah @caswapnilkabra @Gautam__Baid @AnilSinghvi_ @_anujsinghal @varinder_bansal @AshVerma111 @NeerajCNBC @_soniashenoy @AyeshaFaridi1 @connectgurmeet @blitzkreigm Would be grateful for your take on this 🙌