Mumbai: Indian fast food chain operator Jubilant Foodworks , which runs the Dominos Pizza chain in India, saw profits jump 86% jump as new stores brought in more business, prompting even more expansion, a top official said.
Earlier on Thursday the company saw its March quarter net profit jump to Rs 19.33 crore from Rs 10.44 crore in the same period a year ago.
Net sales also jumped 56% to Rs 194 crore.
India’s quick service restaurant market worth $13 billion is growing 25-30% a year on the back of a generation of young and increasingly wealthy consumers with an appetite for western cuisine .
Jubilant plans to open 80 stores in FY12 from 72 a year ago, chief executive Ajay Kaul said in an earnings conference call.
Currently, Jubilant has 378 stores across 90 cities and four manufacturing units in India.
“We also plan new commissaries in Mumbai and Kolkata this year and plan to open one more in Chandigarh. The capital expenditure will increase significantly over last year,” Kaul said without giving any details.
Jubilant Foodworks invested a total of Rs 70 crore in FY11 as capital expenditure, but Kaul did not put a figure.
The company, which also said it hopes to maintain its EBITDA margins at 17.7 % throughout the current fiscal year, has been facing margin pressure due to rising commodity costs.
The company recorded EBITDA margins of 15.5% in FY10.
“The pressure from rising cost of inputs has intensified over the past few months. We have taken a 5.5% hike in April but we are not immediately planning another hike,” Kaul said.
Jubilant plans to to enter Sri Lanka with a total of 5 stores in FY12.
The company, which signed a partnership agreement with USbased Dunkin Donuts in February 2011, said it plans to open 100 Dunkin Donut stores over 5 years in India.
Jubilant Foodworks plans to fund all its expansion from internal accruals and said it has Rs 50 crore of cash reserves currently.
Shares of the company ended 5.3% lower at Rs 696.65 in the Bombay Stock Exchange.