Jubilant Foodworks

I was trying to come up with the growth potential for dominos business have taken a lot of assumptions and leverage, please see and comment on what you think about it. and What assumptions I am missing and should be considered. thanks.

Certainly! Let’s break down the calculation based on the provided assumptions:

1. Calculation of Per Order Economics:

   • Revenue in 2022: 1217.1 crore
   • Total Store Count: 2650 (December 2022)
   • Assuming 3 months per quarter and 30 days per month
   • Per order cost: 400 (assumed and whatever I could find on net)
   • Per day order per store: (((12171000000/2650)/3)/30)/400 = 128 orders per day (approximately)

2. Revenue Projection for 2035 (Best Case):

   • Assuming the store count doubles by 2030 (from 2650 to 5300 stores)
   • Assuming further increase to 7000 stores by 2035 (conservative figure)
   • Assuming per-store sales will stay around today’s level (128 orders per day)
   • Revenue per year in 2035: 128 * 800 * 7000 *365 = 26163cr
   • This represents a 5x increase from the revenue in 2022.

3. Revenue Projection for 2035 (Worst Case):

   • Assuming store count to serve approximately 2 billion people (including India, Bangladesh, Sri Lanka)
   • Comparing with the number of stores in the USA (7000 stores)
   • Assuming 5600 stores in India (conservative number)
   • Assuming per order price stays constant to 550 (conservative)
   • Revenue per year in 2035: 128 * 5600 * 400 * 365 = ~11000 cr (approximately 11000 crore)
   • This represents a 2.3x increase from the revenue in 2022.

The growth trajectory was quite slow in India vs. China, which can be attributed to the
variance in the economic growth of these two countries. India is still quite an underpenetrated market with ~3 stores per million population vs. China’s 13 stores per
million (six stores in 2013). India can sustain ~10% store growth for global QSR giants
by 2030 (China clocked 10% CAGR in 2013-2022).

Antithesis:
More QSR players with better menus can hamper unit economics, and new stores opened are not able to perform up to today’s level [basically selling lesser than 128 pizzas per day]
The growth potential is not realized, and store expansion slows down. store count does not increases as expected.