Strong Popeyes, weak core; margins compressed, costs relentless

Popeyes ≈90 stores, ₹100 Cr revenue, still loss-making; 7 cities at ₹100K ADS only

Domino's LFL 2.5% misses prior 5-7% medium-term guidance; below historical double-digit performance

Delivered OPM 19.6% (flat QoQ after 20 bps headwind mitigation); margin expansion not evident in Q1 result

Management acknowledged volume pressure (MAU to MTC dropping); offsetting with mix improvement, but profitability per order declining

Overall revenue 13.7% YoY but LFL 2.5% (core Domino's 2.5%); growth driven by new stores, not demand

Q4 FY26 flagged 200 bps headwind; Q1 FY27 confirms 120 bps LPG + labor + cheese/oil + dairy. Mitigation (pricing 100-110 bps, efficiency) limited to 20 bps net; West Asia crisis persisting vs expected taper.

Q4 FY26 saw 'healthy LFL' growth, Q3 FY26 strong; Q1 FY27 at 2.5% vs 11.6% prior year signals demand slowdown or delivery mix deterioration despite 140 bps pricing.

MOV dropped to ₹99/₹49 (vs ₹350 prior); management now accepting as structural headwind ('level playing field') rather than opportunity, indicating volume-margin tradeoff locked in.

Still at ₹100 Cr revenue with 'high marketing costs'; target ₹1,000 Cr. Profitability 'next challenge' suggests multi-year path vs near-term EBITDA accretion.

Superior product (marination, fresh chicken), brand building (wings, flavors), store execution. No normalization assumption; goal is higher ADS. Structural tailwinds driving 40-45% range.

Productivity gains (orders per hour improved), supply chain leverage with store additions offsetting wage headwinds. Rate per labor hour has risen.

₹750-900 Cr range (maintained). More indexed on store expansion (Domino's, Popeyes). Supply chain capex down materially. Tech investments continue.

3-pillar playbook: (1) service basics tracked via mystery audit, (2) new customer offers (Best Deals Wednesday), (3) differentiated solo menu. Early success reversing trend on Wednesday. First goal: stop bleed (hold flat on dine-in while delivery grows 8-9%).

Q1 FY27 2.5% + Q1 FY26 11.6% = 14.1%; average 7%+. Q2 FY27 will be better than Q1 FY27. Building business to 5-7% as bases correct.

Yes, 3 goals tasked. ADS needs higher (7 cities at ₹100K+, but below #1 player). Gross margin: scale only at 90 stores, opportunities remain. Unit economics visible but marketing costs 'high' (~₹100 Cr revenue, invested in team for ₹1,000 Cr target). EBITDA profitability next challenge.

Exited Hongs, Dunkin. Supply chain past peak; Mumbai factory commissioned. Capex now revenue-generating (stores). ROCE progression, EPS growth primary metrics; FCF is input, not primary target.

Standalone Domino's conversion remains high. Pricing creates marginal volume drop but comes back in quarter. Not reading too much into MAU/MTC (includes Popeyes, Hong's). Conscious choice: balance discounting, pricing, packaging to maintain margin shape.

200 bps: 100 bps from Popeyes (ahead of track but still not 100 bps), 100 bps from Domino's. Headwinds: LPG 120 bps, cheese, oil, labor. Positive side: price increases, supply chain efficiencies, LFL leverage. Still on guidance.

200 bps headwind (120 bps LPG, labor code, 14-15 state wage hikes, petrol/diesel). 100-110 bps pricing already factored; managing 70-80 bps remaining via efficiency, now restricted to 20 bps net. Cheese (dairy up), oil, chicken costs new.

Lagging action (aggregators moved, we followed). Level playing field now. Cost per order flat YoY but on lower order value = EBITDA headwind. Volume must grow materially higher for this to flow into EBITDA.

Two brands at different stages. Domino's: 6-7M Indians eat pizza monthly (low penetration, 3 meals per 1000 occasions). Fried chicken minuscule vs incumbent. Goal: ₹1,000 Cr profitable brand. Dine-in high because of mall locations; untapped delivery opportunity.

Do not declare delivery percentage for Popeyes. Want customers to order from preferred channel (aggregator, own app, dine-in, takeaway).

Do not share AOV. Typically chicken AOV higher than pizza. Domino's highest in category. Popeyes has room to grow to highest.

Reaffirmed but heavily hedged. Q1 LFL 2.5% (vs 11.6% prior) well below guidance. Management frames as base correction; Q2 'will be better' but no specific target. Delivery volume pressure from MOV floor acknowledged.

Popeyes claimed 'ahead of track' (but only ₹100 Cr scale, unprofitable). Domino's on track but margins flat QoQ. Cost headwinds (120 bps LPG, labor, commodities) not abating; pricing (100-110 bps) and efficiency gains (waste reduction) only netting 20 bps QoQ relief.

Supply chain capex down materially (peak passed, Mumbai factory commissioned). New capex indexed on store expansion (Domino's, Popeyes). Technology investments continue.

LPG 120 bps impact, labor (14-15 state wage hikes), dairy (cheese), oil, chicken. Q1 showed 200 bps headwind only reduced to 20 bps net via pricing (140 bps) + efficiency. West Asia crisis not tapering.

MOV dropped to ₹99/₹49 (vs ₹350 prior). Management describes as 'level playing field' but acknowledges cost per order flat YoY on lower order value = EBITDA headwind. Requires materially higher volume to offset.

LFL 2.5% in Q1 FY27 vs 11.6% in Q1 FY26. Misses 5-7% guidance. Management attributing to base correction and price increases (140 bps) causing volume trade-off, but no clear path to acceleration.

45% LFL impressive but on tiny base (90 stores, ₹100 Cr revenue). Still unprofitable; marketing costs 'high'. Path to ₹1,000 Cr target requires 10x scale without revenue accretion clarity (profitability not discussed).

400 Domino's stores targeted for dine-in focus. Early success on Wednesday promotions, but goals are defensive ('stop the bleed'). Dine-in share currently declining vs delivery (8-9% delivery growth, dine-in flat target).