What’s new

• Like-for-like growth slowed to 0.2% following a reduction in minimum order values to ₹99.
• Energy costs rose 100-120 bps and labour costs increased 50-70 bps during the quarter.
• Gross margins reached 75.5% behind wastage cuts and new premium product launches.

Why it matters

The decision to lower order thresholds has clearly traded volume for value, resulting in a near-stagnant growth profile. While management points to premium products to protect margins, the rising energy and labour costs create a difficult environment for the company to hit its long-term targets.

What we’re watching

• Whether the 230-250 store expansion plan can offset the current growth deceleration.
• Sustainability of the 75.5% gross margin amid persistent inflationary pressure.
• Progress on the long-term 200 bps margin improvement goal.

The full read

Jubilant FoodWorks is struggling to balance volume and cost. In Q4FY26, like-for-like growth for Domino's India slowed to just 0.2%, a sharp drop management tied to its decision to lower the minimum order value to ₹99. While the company managed to lift gross margins to 75.5% through premium product launches and tighter wastage controls, the bottom line is under pressure from rising input costs. Energy expenses climbed 100-120 bps and labour costs added another 50-70 bps of headwind. Despite this, the company remains committed to a long-term margin improvement target of 200 bps and plans to add 230-250 new stores this year. The open question is whether the current strategy of lowering entry barriers will eventually recover growth or if the inflationary environment will force a rethink of the pricing model.

Primary source: BSE · NSE