Best QSR Stocks – Jubilant FoodWorks Ltd vs Devyani International Ltd

Company Overview of Jubilant FoodWorks Ltd

Jubilant FoodWorks Limited, a food service company based in India, is involved in the retail sales of food from various international and homegrown brands catering to different segments of the food market. Its global brands, such as Domino’s Pizza, Dunkin Donuts and Popeyes, are recognized globally. 

The company holds the rights to establish and manage Domino’s Pizza restaurants in India, Sri Lanka, Bangladesh and Nepal. In India, it boasts a network of about 1,838 Domino restaurants spread across 394 cities. Additionally, its wholly owned subsidiaries operate around 50 Domino restaurants in Sri Lanka and 20 in Bangladesh.

Company Overview of Devyani International Limited

Devyani International Limited, an India-based company, is primarily involved in the development, management and operation of quick-service restaurants and food courts for well-known brands like Pizza Hut, KFC, Costa Coffee and Vaango. The company’s operations fall under the Food and Beverages segment, with geographical segments categorized as Within India and Outside India. 

Outside India, operations mainly consist of KFC and Pizza Hut stores in Nepal and Nigeria. Devyani International Limited manages over 490 KFC stores and around 506 Pizza Hut stores in India. Moreover, the company operates as a franchise of the Costa Coffee brand in India, managing about 112 Costa Coffee stores.  

The Stock Performance of Jubilant FoodWorks

The table below displays the month-by-month stock performance of Jubilant Foodworks Ltd for the past year.

The Stock Performance of Devyani International Limited

The table below displays the month-by-month stock performance of Devyani International Ltd. for the past year.

Fundamental Analysis of Jubilant FoodWorks

Jubilant Foodworks Ltd. is a prominent Indian food service company, best known for its master franchise operations of Domino’s Pizza in India and Nepal. Founded in 1995, it has established a significant presence in the quick-service restaurant sector, focusing on delivering high-quality food and exceptional customer service. The company has expanded its menu to include a variety of offerings that cater to diverse tastes, making it a favourite among food enthusiasts.  In addition to Domino’s, Jubilant Foodworks has also ventured into other brands, including Dunkin’ Donuts.  

The stock, priced at ₹689.60, has a market cap of ₹45,342.42 crore and a book value of ₹2243.23. It delivered a 1-year return of 30.02% and a 5-year CAGR of 14.57%, with a 5-year average net profit margin of 7.38%.

• Close Price ( ₹ ): 689.60
• Market Cap ( Cr ): 45342.42
• Dividend Yield %: 0.17
• Book Value (₹): 2243.23
• 1Y Return %: 30.02
• 6M Return %: 17.71
• 1M Return %: 1.77
• 5Y CAGR %: 14.57
• % Away From 52W High: 15.54
• 5Y Avg Net Profit Margin %: 7.38

Fundamental Analysis of Devyani International Ltd

Devyani International Limited is a prominent player in the food and beverage industry, primarily operating as a franchisee for well-known brands like Pizza Hut, KFC and Costa Coffee in India. Established in 1991, the company has successfully expanded its reach across various cities, focusing on delivering exceptional dining experiences. Its commitment to quality and customer satisfaction has made it a significant name in the sector.   

The stock, trading at ₹184.34, has a market capitalization of ₹22,236.31 crore and a book value of ₹1348.59. It recorded a 1-year return of -1.53%, with recent gains of 15.12% in 1 month and a modest 5-year average net profit margin of 1.08%.

• Close Price ( ₹ ): 184.34
• Market Cap ( Cr ): 22236.31 
• Book Value (₹): 1348.59
• 1Y Return %: -1.53
• 6M Return %: 5.72
• 1M Return %: 15.12
• % Away From 52W High: 20.83
• 5Y Avg Net Profit Margin %: 1.08

Financial Comparison of Jubilant FoodWorks and Devyani International Ltd

The table below shows a financial comparison of Jubilant Foodworks Ltd and Devyani International Ltd.

Points to be noted:

• (TTM) Trailing 12 Months – Trailing 12 months (TTM) is used to describe the past 12 consecutive months of a company’s performance data when reporting financial figures.
• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): Measures a company’s profitability before accounting for financial and non-cash expenses.
• PBIT (Profit Before Interest and Tax): Reflects operating profit by excluding interest and taxes from total revenue.
• PBT (Profit Before Tax): Indicates profit after deducting operating costs and interest but before taxes.
• Net Income: Represents the company’s total profit after all expenses, including taxes and interest, are deducted.
• EPS (Earnings Per Share): Shows the portion of a company’s profit allocated to each outstanding share of stock.
• DPS (Dividend Per Share): Reflects the total dividend paid out per share over a specific period.
• Payout Ratio: Measures the proportion of earnings distributed as dividends to shareholders.

Dividend of Jubilant FoodWorks and Devyani International Ltd

The table below highlights the dividend paid by Jubilant FoodWorks. To date, Devyani International Ltd has not distributed any dividends.

Advantages and Disadvantages of Investing in Jubilant FoodWorks

Jubilant Foodworks Ltd

The primary advantage of Jubilant Foodworks Ltd lies in its robust franchise model, particularly with Domino’s Pizza, coupled with operational excellence, extensive network expansion and strong brand recognition, making it a leader in India’s food service industry.

1. Market Leadership: Jubilant Foodworks dominates the Quick Service Restaurant (QSR) segment in India with popular brands like Domino’s Pizza, leveraging a wide presence and deep market penetration.
2. Innovative Offerings: The company consistently introduces new products and services, catering to evolving customer preferences and enhancing customer engagement.
3. Efficient Supply Chain: Jubilant’s well-integrated supply chain ensures quality and timely delivery, contributing to operational efficiency and customer satisfaction.
4. Technological Integration: Investing in digital platforms and analytics, Jubilant optimizes delivery operations, customer interactions and marketing strategies to stay ahead in the competitive QSR market.
5. Expansion Strategy: With continuous growth into new cities and markets, including international ventures, Jubilant broadens its customer base and revenue potential, ensuring sustainable long-term growth.

The main disadvantage of Jubilant Foodworks Ltd lies in its dependency on a single dominant brand, Domino’s Pizza, which exposes the company to brand-specific risks and limits diversification in its revenue streams.

1. Brand Dependency: Over-reliance on Domino’s Pizza accounts for a significant portion of revenue, making the company vulnerable to market fluctuations or brand-specific issues.
2. High Competition: The Quick Service Restaurant (QSR) segment faces intense competition from global and domestic players, impacting market share and pricing power.
3. Rising Operational Costs: Increasing costs for raw materials, logistics and labour strain profitability and require constant efficiency improvements.
4. Limited Product Diversification: Despite some efforts, the company’s portfolio remains narrow, reducing its ability to capture broader customer segments and mitigate risks.
5. Economic Sensitivity: Being in the discretionary spending category, Jubilant Foodworks’ performance is sensitive to economic slowdowns, directly impacting consumer spending on dining and delivery services.

Advantages and Disadvantages of Investing in Devyani International Ltd

Devyani International Ltd

The primary advantage of Devyani International Ltd lies in its diversified portfolio of leading quick-service restaurant (QSR) brands like KFC, Pizza Hut and Costa Coffee, coupled with a strong operational presence in India and select international markets.

1. Diverse Brand Portfolio: Devyani operates globally recognized QSR brands, ensuring a broad customer base and steady revenue from multiple dining segments, including fast food and beverages.
2. Extensive Network: With a rapidly expanding footprint in India and international markets, the company enhances accessibility and brand visibility, strengthening its market presence.
3. Operational Efficiency: Focus on optimizing costs and maintaining consistent quality ensures profitability and customer satisfaction across all outlets.
4. Growth-Oriented Strategy: Devyani continues to invest in new store openings and strategic partnerships, ensuring sustained long-term expansion and market penetration.
5. Strong Franchise Relationships: Its partnership with Yum! Brands provide access to proven business models, marketing strategies and operational support, giving them a competitive edge in the QSR sector.

The main disadvantage of Devyani International Ltd lies in its reliance on franchised operations, making it heavily dependent on agreements with Yum! Brands, which limit operational flexibility and expose the company to contractual and compliance risks.

1. Franchise Dependency: The company relies heavily on its franchise agreements with Yum! Brands, which could be restrictive and subject to renewal uncertainties.
2. High Operating Costs: Rising expenses for rent, raw materials and labour strain profitability, particularly in price-sensitive markets like India.
3. Intense Competition: The QSR industry faces significant competition from global and local players, affecting pricing strategies and customer retention.
4. Economic Sensitivity: Being a discretionary spending segment, the company’s performance is vulnerable to economic downturns, impacting footfall and overall sales.
5. Limited Brand Control: As a franchise operator, Devyani has limited autonomy in decision-making regarding menu innovations and branding, potentially affecting its ability to respond quickly to market trends.

How to Invest in Jubilant FoodWorks and Devyani International Stocks?

Investing in Jubilant FoodWorks and Devyani International stocks requires evaluating their financial performance, market dynamics and growth strategies. A trusted stockbroker like Alice Blue simplifies the process with its competitive fees and user-friendly platform for seamless trading.

1. Analyze Company Fundamentals: Review financial statements, growth strategies and revenue trends of Jubilant FoodWorks and Devyani International to gauge their potential for long-term returns.
2. Open a Trading Account: Use a reliable stockbroker like Alice Blue to open a demat and trading account, benefiting from its low-cost brokerage and intuitive interface for effective investment management.
3. Track Industry Trends: Monitor the QSR sector’s performance, consumer behaviour and macroeconomic factors that can influence stock prices and market sentiment.
4. Diversify Investments: Allocate funds across various sectors to reduce risks associated with QSR industry challenges, ensuring a balanced portfolio for sustained growth.
5. Adopt a Long-Term Strategy: Invest with a long-term perspective to benefit from the consistent expansion and innovation efforts of these companies, mitigating short-term market fluctuations.

Jubilant FoodWorks vs. Devyani International Ltd – Conclusion

Jubilant FoodWorks excels as a leader in India’s QSR segment, leveraging its strong franchise model, operational efficiency and wide network. Despite its reliance on Domino’s Pizza, its focus on innovation and expansion ensures long-term growth and market leadership.

Devyani International boasts a diversified portfolio of global QSR brands like KFC and Pizza Hut, supported by rapid expansion and franchise relationships. While franchise dependency and rising costs pose challenges, its strategic growth and market penetration strengthen its position in the competitive food service industry.

Jubilant FoodWorks vs. Devyani International Ltd – FAQ

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.