The quarter's performance reflects the company's ability to sustain double-digit revenue growth whilst navigating inflationary headwinds and elevated interest costs. Net sales for Q3 FY26 reached an all-time high of ₹2,437.22 crores, representing the company's strongest quarterly revenue performance to date. This 13.32% year-on-year expansion and 4.15% sequential growth underscores the continued strength in consumer demand for organised quick-service restaurants, despite broader economic uncertainties.
Following the results announcement, Jubilant Foodworks shares traded at ₹556.50, reflecting a modest 1.58% gain on February 10, 2026. The stock has faced significant headwinds over the past year, declining 17.86% compared to the Sensex's 9.01% gain, resulting in a negative alpha of 26.87 percentage points. Currently trading 25.20% below its 52-week high of ₹743.95, the stock appears to be consolidating after a prolonged correction phase.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Consol. PAT (₹ Cr) | QoQ Growth | YoY Growth | Op. Margin % |
|---|---|---|---|---|---|---|---|
| Dec'25 | 2,437.22 | +4.15% | +13.32% | 70.90 | -61.89% | +65.23% | 19.79% |
| Sep'25 | 2,340.15 | +3.51% | +19.72% | 186.03 | +102.74% | +190.44% | 20.35% |
| Jun'25 | 2,260.86 | +7.50% | +16.96% | 91.76 | +91.13% | +64.44% | 19.37% |
| Mar'25 | 2,103.18 | -2.21% | — | 48.01 | +11.89% | — | 18.48% |
| Dec'24 | 2,150.76 | +10.03% | — | 42.91 | -33.01% | — | 18.69% |
| Sep'24 | 1,954.72 | +1.12% | — | 64.05 | +14.78% | — | 20.39% |
| Jun'24 | 1,933.06 | — | — | 55.80 | — | — | 19.82% |
Financial Performance: Strong Top-Line, Margin Compression Persists
Jubilant Foodworks' Q3 FY26 results present a nuanced picture of sustained revenue momentum tempered by profitability challenges. Net sales of ₹2,437.22 crores marked the seventh consecutive quarter of sequential growth, reflecting robust demand for the company's brands across its extensive network of over 1,900 stores. The 13.32% year-on-year expansion was driven by a combination of same-store sales growth and new store additions, demonstrating the company's ability to capture market share in India's rapidly expanding organised food services sector.
However, profitability metrics reveal persistent pressure points. Operating profit before depreciation, interest, and tax (excluding other income) stood at ₹482.36 crores with a margin of 19.79%, representing a 110 basis point improvement year-on-year but a 56 basis point contraction quarter-on-quarter. This margin volatility reflects the ongoing challenge of balancing competitive pricing strategies with rising input costs, particularly in commodities, packaging materials, and employee expenses.
The standalone net profit of ₹72.15 crores in Q3 FY26 declined 32.94% quarter-on-quarter from ₹107.53 crores in Q2 FY26, whilst registering a 44.51% year-on-year increase from ₹49.93 crores in Q3 FY25. The PAT margin compressed to 2.99% from 4.70% in the previous quarter, indicating heightened operating leverage challenges. This compression was primarily attributable to elevated depreciation charges of ₹248.44 crores (up 7.88% QoQ) and sustained interest costs of ₹103.54 crores, reflecting the company's aggressive store expansion programme and associated capital requirements.
On a nine-month basis for FY26 (April-December 2025), the company posted consolidated net profit of ₹348.69 crores on revenues of ₹7,038.23 crores, reflecting strong cumulative performance. This represents a significant improvement over the comparable period in FY25, with the company successfully navigating the transition from pandemic-era disruptions to normalised operations. The gross profit margin for Q3 FY26 stood at 14.89%, down from 16.48% in Q2 FY26, indicating persistent cost pressures despite operational efficiencies.
Capital Efficiency: Balancing Growth Ambitions with Returns
Jubilant Foodworks' capital efficiency metrics present a mixed picture, reflecting the inherent tension between aggressive expansion and maintaining robust returns. The company's return on equity (ROE) stood at 14.75% for FY25, whilst the average ROE over recent years has been a respectable 16.97%. This places the company in a favourable position relative to several quick-service restaurant peers, demonstrating management's ability to generate reasonable returns on shareholder capital despite the capital-intensive nature of the business.
The return on capital employed (ROCE) tells a more challenging story. At 12.70% for the latest period, down from an average of 15.36%, the metric highlights the impact of substantial capital deployment for store expansion and infrastructure upgrades. The company's aggressive growth strategy, whilst positioning it for long-term market leadership, has temporarily compressed returns as new stores mature and achieve optimal productivity levels.
Leverage Concerns: Elevated Debt Levels Warrant Monitoring
The company's balance sheet reveals significant leverage accumulation, with long-term debt surging to ₹1,283.17 crores in FY25 from ₹1,195.07 crores in FY24 and a mere ₹182.71 crores in FY23. This represents a dramatic shift in capital structure, with the debt-to-equity ratio climbing to 2.11 times on a half-yearly basis for H1 FY26 – the highest level in the company's recent history.
The debt-to-EBITDA ratio of 2.44 times and net debt-to-equity of 2.02 times indicate moderate to high financial leverage. Whilst the company maintains adequate interest coverage with EBIT-to-interest at 4.66 times in Q3 FY26 (the highest quarterly level), the elevated debt burden constrains financial flexibility and exposes the company to interest rate risks. Interest expenses of ₹103.54 crores in Q3 FY26, though declining sequentially, continue to consume a substantial portion of operating profits.
The company's fixed assets expanded to ₹4,107.31 crores in FY25 from ₹3,943.30 crores in FY24, reflecting ongoing investments in store infrastructure, kitchen equipment, and technology platforms. This capital-intensive expansion strategy has been funded through a combination of debt and internal accruals, with shareholder funds standing at ₹2,102.75 crores. The sales-to-capital-employed ratio of 1.13 times suggests moderate asset productivity, typical for a business in expansion mode.
Operational Dynamics: Store Expansion Drives Growth, Efficiency Remains Focus
Jubilant Foodworks' operational strategy centres on aggressive store network expansion coupled with efforts to enhance same-store sales growth and operational efficiency. The company operates India's largest quick-service restaurant network, with Domino's Pizza as its flagship brand complemented by Dunkin' Donuts and other formats. The consistent quarter-on-quarter revenue growth of 4.15% in Q3 FY26 reflects both new store contributions and improved productivity at existing locations.
Employee costs in Q3 FY26 stood at ₹399.75 crores, declining 1.58% sequentially from ₹406.16 crores in Q2 FY26 but rising 7.73% year-on-year from ₹371.09 crores. This represents 16.40% of net sales, indicating reasonable labour cost management despite inflationary wage pressures and the need for skilled personnel to maintain service quality standards. The company's ability to optimise labour productivity whilst expanding its workforce to support new stores will be crucial for margin improvement.
Cash Flow Generation: Strong Operating Performance Offset by Capital Intensity
For FY25, Jubilant Foodworks generated robust operating cash flows of ₹1,668 crores, a 65.31% increase from ₹1,009 crores in FY24. This strong operational cash generation demonstrates the underlying health of the business model and management's focus on working capital efficiency. However, investing activities consumed ₹850 crores, reflecting the capital requirements of the expansion programme, whilst financing activities resulted in an outflow of ₹849 crores, primarily for debt servicing and dividend payments.
The net cash position declined modestly, with closing cash of ₹99 crores in FY25 compared to ₹131 crores in FY24. Whilst the company maintains adequate liquidity for operational needs, the combination of high capital expenditure and elevated debt servicing obligations limits financial flexibility. The company's ability to convert revenue growth into free cash flow will be a critical determinant of shareholder value creation going forward.
| Company | P/E Ratio (TTM) | P/BV Ratio | ROE % | Debt/Equity | Div. Yield % |
|---|---|---|---|---|---|
| Jubilant Foodworks | 114.82x | 16.94x | 16.97% | 2.02x | 0.22% |
| Devyani International | NA (Loss Making) | 10.80x | 14.18% | 2.05x | — |
| Travel Food Services | 43.08x | 13.21x | 34.47% | -0.60x | — |
| Westlife Foodworld | NA (Loss Making) | 13.33x | 8.09% | 2.65x | 0.14% |
| Sapphire Foods | NA (Loss Making) | 5.22x | 7.90% | 0.90x | — |
| Restaurant Brands Asia | NA (Loss Making) | 4.69x | — | 1.82x | — |
Industry Leadership: Premium Valuation Reflects Market Position
Within India's organised quick-service restaurant sector, Jubilant Foodworks commands a premium valuation, reflecting its market leadership position, established brand equity, and extensive distribution network. With a market capitalisation of ₹36,285 crores, the company is the largest player in the leisure services sector, significantly ahead of peers such as Devyani International, Westlife Foodworld, and Sapphire Foods.
The company's price-to-earnings ratio of 114.82 times trailing twelve-month earnings appears elevated, particularly when compared to Travel Food Services' 43.08 times (the only other profitable peer with a positive P/E ratio). However, this premium reflects several factors: Jubilant's market leadership, superior ROE of 16.97% (highest among peers except Travel Food Services), and consistent long-term growth trajectory. The company's five-year sales compound annual growth rate of 22.69% and EBIT growth of 24.16% justify a valuation premium, though the current multiple leaves limited room for disappointment.
The price-to-book value ratio of 16.94 times is also at the higher end of the peer spectrum, exceeded only by Jubilant itself within the comparable set. This elevated multiple reflects the market's recognition of the company's intangible assets – primarily its master franchise agreements for Domino's and Dunkin' brands, customer loyalty, and operational expertise. However, it also indicates that the stock price embeds optimistic expectations for future growth and margin expansion.
Jubilant's ROE of 16.97% compares favourably against most peers, with only Travel Food Services' 34.47% surpassing it. The company's ability to generate superior returns despite higher leverage (debt-to-equity of 2.02 times, in line with sector averages) demonstrates operational efficiency and effective capital allocation. However, the elevated leverage does introduce financial risk, particularly in scenarios of demand slowdowns or margin compression.
Valuation Analysis: Premium Multiples Limit Upside Potential
Jubilant Foodworks trades at a significant premium to both historical averages and peer group multiples, reflecting the market's confidence in its long-term growth prospects but also limiting near-term upside potential. The current P/E ratio of 114.82 times compares to an industry average of approximately 47 times, representing a 144% premium. This valuation gap is partially justified by Jubilant's superior growth profile, market leadership, and operational track record, but it also suggests that much of the positive outlook is already priced into the stock.
The enterprise value-to-EBITDA multiple of 24.11 times and EV-to-sales of 4.64 times indicate that investors are paying a substantial premium for the company's cash flow generation and revenue base. The PEG ratio of 3.57 suggests that the stock may be overvalued relative to its growth rate, with investors paying ₹3.57 for every percentage point of expected earnings growth – well above the rule-of-thumb threshold of 1.0 for fairly valued growth stocks.
The stock's 52-week trading range of ₹481.20 to ₹743.95 reflects significant volatility, with the current price of ₹556.50 positioned 25.20% below the peak and 15.65% above the trough. This suggests the stock has undergone a meaningful correction from its highs, potentially offering a more attractive entry point than six months ago. However, the valuation remains elevated on an absolute basis, limiting margin of safety for new investors.
The dividend yield of 0.22% is negligible, offering minimal income support to investors. With a dividend payout ratio of 19.83%, the company retains the bulk of earnings for reinvestment in growth initiatives, which is appropriate given its expansion phase. However, this also means that total returns are entirely dependent on capital appreciation, increasing the importance of accurate growth forecasting.
| Quarter | Promoter % | Change | FII % | Change | MF % | Change | Insurance % | Change |
|---|---|---|---|---|---|---|---|---|
| Dec'25 | 40.27% | 0.00% | 18.58% | -1.52% | 28.55% | +1.28% | 5.60% | +0.58% |
| Sep'25 | 40.27% | 0.00% | 20.10% | -0.95% | 27.27% | +0.51% | 5.02% | +0.09% |
| Jun'25 | 40.27% | -1.67% | 21.05% | +0.50% | 26.76% | +0.99% | 4.93% | +0.30% |
| Mar'25 | 41.94% | 0.00% | 20.55% | -0.71% | 25.77% | +0.73% | 4.63% | -0.10% |
| Dec'24 | 41.94% | — | 21.26% | — | 25.04% | — | 4.73% | — |
Shareholding Dynamics: Domestic Institutional Support Strengthens
The shareholding pattern for Jubilant Foodworks reveals interesting shifts in investor composition, with domestic institutional investors increasing their stake whilst foreign institutional investors have been reducing exposure. Promoter holding remained stable at 40.27% in Q3 FY26, following a 1.67 percentage point reduction in Q1 FY26 from 41.94%. This modest dilution does not raise immediate concerns, as the promoter group (Jubilant Consumer Private Limited) maintains a substantial and stable stake, providing strategic direction and alignment with minority shareholders.
The most notable trend has been the steady accumulation by mutual funds, with their holding rising to 28.55% in Q3 FY26 from 25.04% in Q4 FY24 – a 351 basis point increase over four quarters. This consistent buying by domestic mutual funds, which collectively added 1.28 percentage points in Q3 FY26 alone, signals growing confidence among professional domestic investors in the company's long-term prospects. With 32 mutual fund schemes holding positions, the stock enjoys broad-based support from the domestic institutional community.
Conversely, foreign institutional investors have been net sellers, reducing their stake to 18.58% in Q3 FY26 from 21.26% in Q4 FY24. The 152 basis point reduction in Q3 FY26 represents the largest quarterly decline in recent periods, potentially reflecting FII concerns about valuation, near-term margin pressures, or portfolio rebalancing towards other sectors. With 541 FIIs holding stakes, the selling appears broad-based rather than concentrated, suggesting a general reassessment of risk-reward rather than specific concerns about the company.
Insurance company holdings have steadily increased to 5.60% in Q3 FY26 from 4.73% in Q4 FY24, adding 58 basis points in the most recent quarter. Combined with other domestic institutional investors at 0.83%, total domestic institutional ownership (excluding promoters) stands at 34.98%, providing a stable shareholder base with long-term investment horizons. This shift from foreign to domestic institutional ownership may reduce volatility related to global capital flows, whilst maintaining professional oversight of management performance.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +9.93% | +0.64% | +9.29% |
| 1 Month | +6.63% | +0.83% | +5.80% |
| 3 Months | -4.77% | +0.88% | -5.65% |
| 6 Months | -10.89% | +5.53% | -16.42% |
| Year to Date | -0.35% | -1.11% | +0.76% |
| 1 Year | -17.86% | +9.01% | -26.87% |
| 2 Years | +15.44% | +17.71% | -2.27% |
| 3 Years | +20.89% | +38.88% | -17.99% |
| 5 Years | +0.04% | +64.25% | -64.21% |
| 10 Years | +367.86% | +254.70% | +113.16% |
Stock Performance: Near-Term Recovery Amidst Longer-Term Weakness
Jubilant Foodworks' stock price performance has been characterised by significant volatility and underperformance relative to broader market indices over most timeframes. The stock has delivered negative absolute returns of 17.86% over the past year, substantially underperforming the Sensex's 9.01% gain and resulting in a negative alpha of 26.87 percentage points. This underperformance reflects investor concerns about margin pressures, elevated valuations, and the sustainability of growth momentum in an increasingly competitive quick-service restaurant market.
The recent trend, however, shows signs of stabilisation and recovery. Over the past week, the stock surged 9.93%, significantly outperforming the Sensex's 0.64% gain and generating positive alpha of 9.29 percentage points. This sharp rebound from recent lows suggests that investors may be finding value at current levels, particularly following the stock's 25% correction from its 52-week high. The one-month performance of +6.63% versus the Sensex's +0.83% further supports this nascent recovery trend.
Medium-term performance metrics paint a more challenging picture. Over three months, the stock declined 4.77% whilst the Sensex gained 0.88%, and over six months, Jubilant fell 10.89% against the Sensex's 5.53% rise. These periods of sustained underperformance coincide with investor concerns about the company's ability to expand margins whilst managing elevated debt levels and intense competition. The stock's high beta of 1.20 indicates that it is 20% more volatile than the broader market, amplifying both gains and losses during market swings.
Long-term performance metrics reveal a more nuanced picture. Whilst the stock has underperformed over one, two, three, and five-year periods, the ten-year return of 367.86% substantially exceeds the Sensex's 254.70% gain, generating positive alpha of 113.16 percentage points. This demonstrates that despite recent challenges, Jubilant Foodworks has been a wealth creator for patient long-term investors who held through multiple business cycles. The company's transformation from a nascent franchisee to India's dominant quick-service restaurant operator is reflected in this impressive long-term track record.
Investment Thesis: Quality Business at Elevated Valuations
Jubilant Foodworks presents a compelling long-term investment case predicated on India's favourable demographic trends, rising disposable incomes, and the ongoing shift towards organised food services. The company's market leadership position, established brand equity through its Domino's and Dunkin' franchises, and extensive distribution network of over 1,900 stores provide significant competitive advantages. The five-year sales compound annual growth rate of 22.69% and EBIT growth of 24.16% demonstrate management's ability to execute on expansion plans whilst maintaining reasonable profitability.
The company's quality credentials are solid, with an overall quality grade of "Good" reflecting healthy long-term growth, respectable return on equity of 16.97%, and strong institutional participation at 53.56%. The financial trend assessment remains "Positive" for Q3 FY26, supported by record quarterly revenues, highest-ever operating profit-to-interest coverage of 4.66 times, and robust nine-month performance. These fundamental strengths position the company well to capitalise on India's consumption growth story over the coming decade.
However, several factors temper the investment appeal at current levels. The stock's P/E ratio of 114.82 times and PEG ratio of 3.57 suggest that much of the positive outlook is already priced in, leaving limited margin of safety. The elevated debt-to-equity ratio of 2.11 times and substantial interest burden constrain financial flexibility and expose the company to refinancing risks. Margin pressures remain persistent, with operating margins volatile and PAT margins compressed to 2.99% in Q3 FY26, well below historical averages.
The technical picture remains "Mildly Bearish" despite recent price strength, with the stock trading below all major moving averages (5-day through 200-day) and facing resistance at the ₹574.39 level (100-day moving average). The Mojo score of 50 out of 100 and "HOLD" rating reflect this balanced assessment: a quality business with solid long-term prospects, but elevated valuations and near-term headwinds that limit immediate upside potential.
Key Strengths ✓
- Market leadership in organised quick-service restaurants with extensive 1,900+ store network
- Strong revenue momentum with 13.32% YoY growth and seven consecutive quarters of sequential expansion
- Healthy return on equity of 16.97%, demonstrating efficient capital utilisation
- Robust five-year sales CAGR of 22.69% and EBIT growth of 24.16%
- Improving interest coverage at 4.66 times, highest quarterly level on record
- Strong operating cash flow generation of ₹1,668 crores in FY25
- High institutional ownership at 53.56% with increasing domestic mutual fund participation
Key Concerns ⚠️
- Elevated P/E ratio of 114.82x and PEG ratio of 3.57 indicate expensive valuation
- High leverage with debt-to-equity at 2.11 times, limiting financial flexibility
- Compressed PAT margin of 2.99% in Q3 FY26, down from 4.70% in Q2 FY26
- Declining ROCE to 12.70% from historical average of 15.36%
- Stock underperformance with -17.86% return over past year vs Sensex +9.01%
- Persistent margin pressures from input cost inflation and competitive intensity
- Negligible dividend yield of 0.22% offers minimal income support
Outlook: What to Watch in Coming Quarters
The investment case for Jubilant Foodworks will be determined by management's ability to navigate several critical challenges whilst capitalising on structural growth opportunities. Investors should monitor the following key metrics and developments to assess whether the company can justify its premium valuation and deliver satisfactory returns from current levels.
Positive Catalysts
- Same-store sales growth acceleration above 10% indicating strong brand momentum
- Operating margin expansion towards 21-22% through operational efficiencies and pricing power
- Successful new store openings maintaining target of 150-200 annual additions
- Debt reduction and interest cost optimisation improving return on equity
- Market share gains in tier-2 and tier-3 cities driving revenue growth
Red Flags to Monitor
- Further margin compression below 19% on sustained basis
- Debt-to-equity rising above 2.5 times or interest coverage falling below 4.0 times
- Same-store sales growth decelerating below 5% indicating demand weakness
- Continued FII selling pressure and promoter stake reduction
- Failure to achieve targeted new store openings or poor productivity at new locations
The company's ability to balance aggressive expansion with margin preservation will be the critical determinant of investment returns. If management can successfully navigate input cost pressures, optimise labour productivity, and leverage scale advantages to expand operating margins back towards 21-22%, the current valuation may prove reasonable over a three-to-five-year horizon. However, any stumbles in execution, demand slowdown, or intensifying competition could lead to multiple compression and disappointing returns.
For existing shareholders, the stock's 25% correction from its 52-week high has partially addressed valuation concerns, whilst the company's fundamental strengths remain intact. The recent recovery in share price and positive financial trend suggest that the worst may be behind the stock. For prospective investors, current levels offer a more attractive entry point than six months ago, though patience may be rewarded by waiting for further technical confirmation of trend reversal or additional valuation compression.
The Verdict: Quality Business, Expensive Valuation
Score: 50/100
For Fresh Investors: Consider accumulating on further weakness below ₹520 levels or await clearer evidence of sustained margin expansion. The quality of the business justifies a position, but the current valuation offers limited margin of safety. A staggered approach over 6-9 months would be prudent.
For Existing Holders: Continue to hold with a long-term perspective of 3-5 years. The company's market leadership and execution capabilities remain intact despite near-term headwinds. Use any sharp corrections below ₹500 to average down. Consider partial profit-booking if the stock rallies back above ₹650 without corresponding improvement in fundamentals.
Fair Value Estimate: ₹580-620 (4.2% to 11.4% upside from current levels), based on 90-100x forward earnings and assuming 15-20% earnings growth over FY26-27. The stock remains fairly valued at current levels with modest upside potential over the next 12 months.
Note- ROCE= (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. The views expressed are based on data available as of February 10, 2026, and are subject to change.
