Market Strategy


Bhavana Acharya | Updated on April 28, 2012 Published on April 28, 2012

Jubilant FoodWorks, licensee of pizza chain Dominos, has been the darling of the bourses ever since it got listed, falling out of favour only for a short while in late 2011. Apart from the benefit of having no listed competition, Jubilant was caught up in the fancy for consumer-oriented stocks.

Healthy growth in sales, the steady adding of new outlets and a move to Sri Lanka, supported interest in the stock. Jubilant added new offerings to its pizza line-up and broadened its peripheral offerings such as desserts and starters. It also managed to effect price increases of its products.

Consumers did reduce big-ticket purchases in the face of inflation and higher interest rates resulting in increased monthly loan payments. But they kept up spending on smaller indulgences, which helped Jubilant clock strong revenue growth. The company has a strong brand in Dominos and dominates the pizza take-away market.

Net sales for the nine-month period ending December 2011 came in at 52 per cent, though it is lower than the 61 per cent growth of previous year. Net profits too expanded relatively at 48 per cent, compared to multi-fold increases in the year-ago periods. Earlier, net profit growth was supported by lower taxes due to accumulated losses (completely written off in FY11) and savings in interest costs. Both avenues dried up in FY12.

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