Jubilant FoodWorks Ltd, the operator of Domino’s Pizza in India, flagged near-term margin pressure as rising energy, labour and commodity costs weighed on the business, even as the company said it continues to gain market share in the pizza and quick-service restaurant (QSR) segments.
In the March-quarter earnings call with analysts, Sameer Khetarpal, managing director and chief executive, said the company faced multiple inflationary headwinds, particularly from liquefied petroleum gas and piped natural gas prices, wage inflation and rising logistics-linked commodity costs.
“We do believe that in the near term there might be some compression,” Khetarpal said. “There is near-term inflation pressure.”
A cautious phase
The comments from the country’s largest QSR operator underscore the mounting pressure on food-service companies as they navigate weak consumer demand, intensifying competition and rising .
Experts said the sector is entering a more cautious phase after an aggressive expansion cycle. “Store expansion will continue but in a calibrated fashion,” said Madhur Singhal, managing partner and consumer industry expert at Praxis Global Alliance. “The players have gone through an aggressive capex cycle and will seek to get returns before the next big wave of reinvestment.”
Singhal said companies are also waiting for “consumer spending and outdoor eating to resume its growth trajectory” before accelerating expansion again.
The company said energy inflation alone was impacting margins by around 100-120 basis points. Khetarpal said rising LPG and PNG costs were among the biggest challenges currently facing the business.
“The biggest piece which has been hit is the energy cost, where the cost of LPG has increased, the cost of PNG has increased,” he said.
Along with this, higher petrol and diesel prices could trigger broader commodity inflation across the consumer sector.
“Commodities, I think we’ll all wait to see how it plays out. Right now, some amount of commodity inflation has come,” Khetarpal said. “If petrol and diesel prices go up, and logistics costs go up, across the board commodities will see further inflation.”
Apart from commodity and , the management also said there is pressure from labour inflation, including minimum wage hikes across several states, labour code-related changes and higher delivery-related staffing costs as delivery sales continue to dominate the business mix.
“Minimum wage increases that we’ve seen across some of the states have already gone live,” Khetarpal said.
Despite the near-term pressures, the company maintained that Domino’s continues to gain market share in both the pizza category and the broader QSR market.
“There is one truth: Domino’s has gained share. It has gained share in the category, it has gained share in the QSR space,” Khetarpal said.
According to experts, value offerings are likely to remain critical for growth amid weak discretionary demand. “While cheaper product versions will drive growth, it is not always due to growth in traffic,” Singhal said. “Low-priced stock keeping units (SKUs) will bring online volume growth and help increase average order value (AoV) and order volumes in stores.”
The company said delivery remained a strong growth driver, though AoV was impacted after Domino’s reduced the minimum order value from ₹149 to ₹99 to attract more customers and gain share.
The company reported revenue of ₹2,499.46 crore, a 19.3% year-on-year increase during the fourth quarter. Net profit rose 67% on-year to ₹82.42 crore.
For 2025-26, the company’s revenue rose by 17.37% to ₹9,512.51 crore from the previous fiscal. Net profit increased by 104.61% to ₹444.24 crore.
At the end of FY26, Jubilant FoodWorks had 2,562 stores in India, including 2,455 Domino’s outlets, 78 Popeyes stores, and 29 Hong’s Kitchen outlets.
Jubilant FoodWorks was earlier operating Dunkin’ in India under a franchise agreement, but it has decided not to renew the pact after it expires in December 2026.
“We prioritize growth. And from a growth standpoint, we prioritize volume metric growth because we are building a business for the long run,” Khetarpal said.
No price hikes
The company also said it would avoid taking sharp price hikes despite the inflationary environment.
“We will not do major price increases; that is off the table,” he said.
Khetarpal said the company is relying on operational efficiencies, premium product offerings and supply-chain improvements to cushion margin pressures.
Jubilant FoodWorks is also accelerating its shift towards electric ovens and PNG systems to reduce dependence on , while continuing its expansion plans with 280-300 new restaurants, increasingly focused on smaller, delivery-led formats.
Still, the broader sector outlook remains cautious. “The sector is in a cautious outlook as inflation, as well as discretionary consumption, is under stress,” Singhal said. “Till the geopolitics improves and the job growth returns, the QSR sector will stay watchful.”
The promoters of HT Media Ltd, which publishes Mint, and Jubilant Foodworks are closely related. There are, however, no promoter cross-holdings.