Detailed Rationale

Crisil Ratings has reaffirmed its 'Crisil A1+' rating on the commercial paper programme of Jubilant FoodWorks Ltd (JFL).

 

The rating continues to reflect JFL’s established position in the food service market, robust supply chain network, longstanding industry experience of 28 years, supportive operating environment with rising disposable income and a younger population, and strong financial risk profile. These strengths are partially offset by concentration of revenue and profitability, which is driven by Domino’s Pizza and its susceptibility to competitive intensity and cost pressures.

 

Consolidated revenue grew 44% on-year to Rs 8,152 crore in fiscal 2025, supported by consolidation of DP Eurasia since February 1, 2024 (DP Eurasia contributed revenue from operations of Rs 1,906 crore  for fiscal 2025), recovery in like-for-like (LFL) growth, and addition of new stores. Domino’s India business grew 13.4%, with 7.5% LFL growth, against negative LFL growth in fiscal 2024. led by multiple initiatives such as free delivery, innovative menus and customer acquisition strategies. For DP Eurasia, Domino’s Turkey achieved LFL growth of +0.4% in fiscal 2025, on a high base of 29.2% in the previous year. Crisil Ratings expects consolidated revenue to grow 8-10% annually over the medium term.

 

Earnings before interest, tax, depreciation and amortisation (Ebitda) margin (post IndAS basis) moderated to 19.7% in fiscal 2025, from 20.7% in fiscal 2024, due to initiatives such as free delivery and continued investments in emerging brands such as Popeye’s. The Ebitda margin (pre IndAS; after adjusting for lease expenses) stood at 13.0% for fiscal 2025, against 12.8% in fiscal 2024. Crisil Ratings expects the margin to sustain at ~20.0% (post IndAS basis) and ~13% (pre IndAS basis) over the medium term, with accretion in profit after tax (PAT) margin. 

 

In the first half of fiscal 2026, reported revenue from operations stood at Rs 4,601 crore (18% on-year growth). While domestic operations grew ~17% on-year, led by strong order volume aided by various initiatives including free delivery, the DP Eurasia business also posted strong performance in Turkey. Ebitda (post IndAS) stood at Rs 914 crore, resulting in Ebitda margin of 19.9% (20.1% in the first half of fiscal 2025; margin on pre IndAS was ~13% for the first half in fiscal 2026; Crisil Ratings adjusted).

 

JFL had acquired a controlling stake in DP Eurasia B.V., increasing its ownership to 94.06% (as on March 31, 2025) from 49%, effective February 1, 2024, through its wholly owned subsidiary, Jubilant Foodworks Netherlands BV. DP Eurasia is the exclusive master franchisee of the Domino’s Pizza brand in Turkey, Azerbaijan and Georgia. It offers pizza delivery and takeaway or eat-in facilities at 768 stores (as on September 30, 2025) and operates an asset-light, scalable business through franchise stores, comprising around 90% of overall stores. Furthermore, it operates in Turkey's high-frequency, coffee consumption market under the “COFFY” brand. For fiscal 2025, DP Eurasia registered revenue of Rs 1,906 crore with Ebitda and PAT margin at 21.8% and 6.6%, respectively.

 

The total acquisition value of DP Eurasia was Rs 1,200 crore (~EUR 118.9 million equivalent at time of acquisition) and the shareholding was acquired over the three fiscals through March 2024. DP Eurasia contributed to nearly 23% of JFL’s consolidated revenue in fiscal 2025, significantly diversifying its revenue base. The interest rate for the debt raised for the acquisition is approximately 4.6%. This acquisition strengthened JFL’s market position, leveraging its expertise in running India’s largest food service company. While the acquisition debt shall lead to temporary moderation in the financial risk profile, as per the expectations of Crisil Ratings, it will remain healthy with gearing remaining below 1 time and a robust interest coverage ratio over the medium term. Any further debt-funded acquisition will remain monitorable.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of JFL and its subsidiaries, as these entities have operational and financial linkages. Further, Crisil Ratings has amortised the goodwill and master franchisee right assets, arising on acquisition of DP Eurasia over a period of ten years.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths

Established market position in the quick service restaurant (QSR) segment: The company is a leading industry player in the QSR segment, with exclusive rights to operate Domino’s Pizza outlets in India, Sri Lanka, Bangladesh, Nepal, Turkey, Azerbaijan and Georgia. During fiscal 2025, JFL opened 325 new stores, which took the total network to 3,316 stores across all brands. As on September 30, 2025, Domino’s India expanded its network to 2,321 stores across 500 cities. Post integration of DP Eurasia, the consolidated operations also span across 768 Domino’s stores and 172 COFFY stores across Turkey, Azerbaijan and Georgia.

 

To fortify its market position, the company has expanded its offerings under various brands—Popeyes, Dunkin’ and Hong’s Kitchen. Furthermore, through its majority stake in DP Eurasia, it has entered Turkey's high-frequency coffee consumption market under the “COFFY” brand.

 

Robust supply chain network: The unique commissary model provides the company a distinct competitive advantage. With a centralised purchase function, and bulk procurement of key ingredients such as cheese, sauce and pizza boxes, JFL can leverage its scale and negotiate better rates with suppliers. Furthermore, centralised sourcing, warehousing and distribution of raw material and production of dough balls at commissaries reduce storage space and operating cost. Working capital has been managed efficiently with a traditionally negative cycle, reducing dependence on external debt.

 

Strong financial risk profile: As on September 30, 2025, total debt was Rs 1,614 crore, excluding lease liabilities of Rs 2,949 crore. While debt stood at Rs 1,502 crore as on March 31, 2025, similar to Rs 1,507 crore as on March 31, 2024, gearing was less than one time as on the same date. While interest coverage ratio (pre IndAS basis) stood at 4.9 times for fiscal 2025, Crisil Ratings expects it to improve over the medium term, with repayment of acquisition debt. Moreover, DP Eurasia availed unsecured working capital loans at very high interest rates of 44-54% due to hyper-inflation in Turkey. A large portion of the high-cost working capital loans have been refinanced or repaid as at September 30, 2025. Any further large, debt-funded acquisitions will remain monitorable.

Key Rating Drivers - Weaknesses

Concentration of profitability in the Domino’s Pizza division: JFL derives bulk of its profit from Domino’s Pizza in India and Turkey. Additionally, since 2012, JFL has been focusing on diversifying its portfolio by acquiring franchisee rights for Dunkin (2012) and Popeyes (2021), and expanding its own brand, Hong’s Kitchen (2019). The company expects to reach 250 Popeyes stores in India over the medium term. However, scalability and contribution of these brands to profitability are yet to be seen. With acquisition of majority stake in DP Eurasia, it has entered Turkey's high-frequency coffee consumption market and the Coffy brand is amongst the top caffe brands in the country.

 

Susceptibility of profitability to competitive intensity and cost pressures: Intense competition in the domestic QSR market (with marked by presence of organised players and several unorganised players) may result in loss of market share and reduced profitability. Fixed cost (mainly lease rentals for store premises, employee cost and electricity charges) form a significant portion of operating cost for a QSR, resulting in potential compression of margin in the event of slowdown in business. Thus, growth in same-store sales is essential to boost profitability. Timely execution of the growth plan without any cost overrun and improvement in operating margin with sustained focus on cost optimisation, technology, low leverage and economies of scale, remain monitorable.

Liquidity Strong

Liquidity is supported by cash and equivalents, including bank deposits and liquid investments of around Rs 176 crore as on September 30, 2025. Crisil Ratings expects that healthy liquid surplus and internal accrual generation, over the medium term, should be sufficient to fund organic expansion plans. Working capital requirement remains limited for JFL due to its negative working capital cycle.

ESG Profile

The ESG profile of JFL supports its already strong credit risk profile.

 

The industry trends for the food retail sector show that it has a significant impact on the environment owing to high water consumption and waste generation, apart from greenhouse gas emission. Its social impact is characterised by health hazards, leading to a higher focus on employee safety and well-being; and impact on the local community, given the nature of operations.

 

JFL has continuously focused on mitigating its environmental and social risks. The company has been improving its disclosure levels and is further strengthening it.

 

Highlights

• JFL reported lower-than-the-peer-average Scope 1 and 2 emissions (~28 tCO2e per Rs crore of revenue) and hazardous waste generation intensities. Furthermore, the company’s energy consumption intensity is broadly in line with peer average and share of renewables in the energy mix has increased to ~2% in fiscal 2025 (0.42% in fiscal 2024).
• The company targets to achieve water neutrality in commissaries, and 80% deliveries through electric vehicles (EVs) by fiscal 2030. In this regard, nearly 24% of water consumed in commissaries in fiscal 2025, was harvested from rooftops and EVs formed 56% of the delivery fleet.
• The company reported nil lost-time injury frequency rate (LTIFR) among workforce and fatalities, 100% of employees and workers trained on skill upgradation and health and safety measures and lower-than-peer customer complaints intensity.
• JFL targets to source 100% of its ingredients from certified suppliers, 100% farm traceability of key ingredients, and 40% gender diversity in workforce by fiscal 2030. As of fiscal 2025, the company has sourced 96% ingredients from certified suppliers, 100% traceability of key ingredients such as chicken, oregano, basil and chilli, and ~36% gender diversity in the workforce (which is also higher compared to the peer average).
• Its governance structure is characterised by an adequate board size with 50% being independent directors and 20% being women directors, coupled with split in chairman and CEO positions. Furthermore, it has a dedicated board level sustainability and corporate social responsibility (CSR committee) and extensive disclosures.

 

There is growing importance of ESG among investors and lenders. The commitment of JFL to ESG principles will play a key role in enhancing stakeholder confidence and ensuring ease of raising capital from markets where ESG compliance is a key factor.

Rating sensitivity factors

Downward factors

• Substantial decline in revenue with operating margin falling to below 7-8% (pre IndAS basis), impacting cash generation
• Any large, debt-funded capital expenditure or acquisition, weakening the financial risk profile substantially on sustained basis

About the Company

Incorporated in 1995, the JFL group ranks among the leading food service companies in emerging markets. Its group network comprises 3,480 stores (as of September 2025) across six markets – India, Turkey, Bangladesh, Sri Lanka, Azerbaijan and Georgia. The group has a strong portfolio of brands in emerging markets, with franchise rights for three global brands - Domino’s, Popeyes and Dunkin’ – and two of its own brands, Hong’s Kitchen, an Indo-Chinese QSR brand in India, and a café brand - COFFY in Turkey.

 

In India, it has an extensive network of 2,321 Domino’s restaurants across 500 cities (as of September 2025). In Sri Lanka and Bangladesh, the company operates through its wholly owned subsidiary, which currently has 50 and 40 restaurants, respectively. JFL also has exclusive rights to develop and operate Dunkin’ restaurants in India; and Popeyes restaurants in India, Bangladesh, Nepal and Bhutan. The company currently operates 28 Dunkin’ restaurants and 68 Popeyes restaurants. It also operates 33 Hong’s Kitchen restaurants across India.

 

Post integration of DP Eurasia (subsidiary since February 2024), the consolidated operations now include 768 Domino’s stores and 172 COFFY stores across Turkey, Azerbaijan and Georgia.

Key Financial Indicators

As on/for the period ended March 31	Unit	2025	2024
Revenue	Rs crore	8152	5667
Reported profit after tax (PAT)	Rs crore	217	400
PAT margin	%	2.7	7.1
Adjusted debt/adjusted networth^	%	0.66	0.62
Adjusted interest coverage^	Times	4.9	14.1

^Crisil Ratings-adjusted consolidated financials

Debt and finance costs do not include impact of lease accounting

Any other information: Not applicable