Jubilant FoodWorks’ (JUBI) change in stance from delighting customers by offering 20 minutes delivery silently (vs promised delivery time of 30 minutes) to now advertising through banners on Domino’s app (highlighting 20-minute delivery USP) is an incremental positive.
This (less-than-30 per cent improvement in convenience) along with simplicity of the loyalty programme (free regular size pizza after every sixth order with minimal conditions) shall help JUBI re-ignite consumer demand for its franchise and hence, gain meaningful delivery market share from competition.
As per our channel check, JUBI enjoys structural strength which enables the company to provide fastest-delivery with lowest-cost compared to food aggregators. Also, JUBI has outperformed the top 3 global markets of Domino’s in execution (on delivery time). Interestingly, we observe that in the US, Domino’s has gained market share despite doubling of competition in pizza-delivery over the last decade (we expect similar market share gains for JUBI in India driven by superior execution).
We continue to remain constructive on the stock with Buy rating.
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