Many of us love Dominos Pizza, but how many of us have shares of the company which has exclusive rights to run Domino’s Pizza outlets in India, Sri Lanka, Nepal and Bangladesh?
The name of the company is Jubilant FoodWorks Limited.
It runs 1,373 restaurants across 282 cities. Apart from the Domino’s brand, the company also owns two other restaurant chains – Dunkin’ Donuts and Hong’s Kitchen.
Jubilant Foodworks has given extraordinary returns to its shareholders from the launch of its IPO in January 2010.
Let’s get straight to the share price history.
Jubilant FoodWorks IPO Share Price
The company was incorporated way back in 1995, but the journey for the company at the stock market began in 2010 – when the IPO was launched and the company was listed on NSE and BSE.
Quick look at the IPO details:
- IPO: 2,26,70,447 Shares at ₹ 145 per share.
- Face Value: ₹ 10 per share.
- Listing Date: 08 February 2010.
- Listing Day Open: 160 per share
- Listing Day Low: 160 per share
- Listing Day High: 240 per share
- Listing Day Close: 230 per share
Note: In June 2018, Jubilant FoodWorks issued 1:1 bonus shares. Those who had one share, got one extra share of the company. The stock price was reduced by half. After adjusting for the bonus, the IPO price of the company will be considered to be ₹ 72.5 per share for our calculations.
Jubilant FoodWorks Share Price History
|Share Price||Rise / Fall|
Those are the year-end share prices of Jubilant Foodworks. Go through the table and the graph, and try to form your own opinions on the movement of the share price.
What’s interesting is – Jubilant Foodworks hasn’t had a bad year except 2016. In all other years, the stock price has performed fairly well or given outstanding returns.
After its listing in February 2010, the stock ran up in a straight line.
A stock that was priced at ₹ 72.5, gave listing gains of nearly 60% and continued to run-up throughout its first year.
This is for those ‘experts’ who say never buy an IPO because the promoters are selling their shares and they wouldn’t sell it for a discount. These experts have a point – why would a owner of a business sell his shares for cheap?
However, it has been proved time and again that the market is supreme.
Stocks like Jubilant Foodworks, Avenue Supermarts (D-Mart), IRCTC are examples of stocks that have never going back to their IPO price.
However, these are high-quality businesses – which cannot be compared to all those IPOs which come out every month.
After going up nearly 9 times in just 3 years of its listing, Jubilant Foodworks was over-priced and a time correction was due.
The fundamentals also took a hit during this period due to aggressive store expansions. Return on capital employed (ROCE) and EBITA deteriorated. But these were the years when the number of stores sky-rocketed from 460 in 2012 to 1020 in 2016.
During this time, the stock completed its ‘time correction’ as well as ‘price correction’.
From ₹ 644 per share at the end of 2012 to ₹ 427 per share at the end of 2016 – Jubilant Foodworks was one of the big under-performers during this time. Even the bull market of 2013-2015, due to anticipation of a strong Narendra Modi-led government at the center – did not move the stock price.
How many investors lost patience? How many sold their shares out of fear? Those who did not invest time in understanding the business or those who invested a few months after its listing – were the ‘weak hands’ which the market removed.
This is the reason why you should never buy stocks that are hyped on social media or business channels. When you buy a share which everyone is buying – it means the stock is near its top or it may not perform in the next few years.
Quality companies have to be bought when opportunities come – and every stock gives opportunities. You do not have to try and catch a stock which has just tripled after listing. At the time of writing this article – the same can be said about Burger King which has just listed and tripled this month from its IPO price.
Think about it. If you had not bought Jubilant Foodworks in the first few years – the market would’ve given an opportunity in 2015-16. The company was a lot bigger. And even though it did not reflect in the ‘Profit After Tax’ (PAT) column, the sales between 2011 to 2016 had gone up 4 times.
Here comes the more interesting part.
Back in 2016, a huge ‘mid and small cap’ rally was going on in the market. Many low-quality companies were going up everyday. Jubilant Foodworks was a mid-cap back then, and for most part, it did not perform in the massive rally.
It was only after Mid-2017 that the momentum came back. And since then, even though most mid and small caps crashed by 30-70%, Jubilant Foodworks has graduated into the ‘large cap’ club.
The rise has truly been spectacular.
Will it continue? It could. Jubilant Foodworks has recently given a break-out on its weekly trend-line, which has now become its support.
This is supported by some positive news from its business too.
- The company has recently launched a new chain called ‘EkDum Biryani’. After dominating the pizza market, the goal is to go desi.
- Due to Zomato and Swiggy normalizing delivery charges, Domino’s too has started charging for delivery. The company now charges a minimum of ₹ 30 for delivery per order. There’s news that this hasn’t affected sales.
- The sales after Covid is also getting back to normal. And now with people preferring OTT and work from home, we could see the sales of Domino’s getting a boost in the months to come.
Let’s move on to the next segment.
Jubilant Foodworks Share Returns
How much returns has ‘Jubilant Foodworks’ given if you bought the share 2 years ago? Or 3, 4 or 5 years ago.
What if you were holding the Domino’s Pizza shares from the time of its IPO? What if you bought shares on the listing day at ₹ 115 per share and managed to hold it through its ups and downs.
Check out the table below:
|2 years||47.04%||2.16 times|
|3 years||45.38%||3.07 times|
|4 years||58.68%||6.34 times|
|5 years||29.54%||3.65 times|
|10 years||24.08%||8.65 times|
|Since Listing||37.14%||23.54 times|
|Since IPO||43.62%||37.34 times|
Even if you bought ‘Jubilant Foodworks’ Shares at the worst possible time and held the shares till date – you’d have compounded your money at a faster rate than Warren Buffett.
The returns from the day of listing are truly spectacular. There hasn’t been a ‘bad time’ to be a long-term investor of the Domino’s Pizza company.
Do note: Past performance does not guarantee future returns. This article is for information purpose only and not a buy or sell recommendation.
1 Lakh invested in Jubilant Foodworks Share
If you had invested 1 lakh in ‘Jubilant Foodworks’, how much returns would it give over different time periods?
The table below has the figures:
|1 Lakh Invested|
Jubilant Foodworks Share vs FD Returns
What if you opened a fixed deposit of 1 lakh and made another investment of 1 lakh in ‘Jubilant Foodworks’ Shares.
The results are below. The returns from ‘Jubilant Foodworks’ does not include income from dividends.
Some points to be noted:
- FD returns are as expected. Your money would’ve doubled in 10 years. There is hardly any reason to worry, as your investment is 100% safe – if you deposit it in a reliable bank.
- Investing in Jubilant shares – like any other listed stock – is filled with ups and downs.
- Do you know what’s the most difficult part of long-term investing? Just notice the 2010 and 2016 period in the chart above.
- For the first 5 years, your investment in Domino’s would’ve given you excellent returns. But suddenly in the 2015-2017 period, your returns would go down by half.
- At this point, fixed deposit returns would look far more superior. Unfortunately, it is at this very point that many people sell. And most of those who sell there, would’ve never got another opportunity to buy as the share price has gone up rapidly after that.
- This is the psychological test the market will put you through – even in the best of companies.
- If you see at the end of 10 years, there is a huge difference in returns. One has turned 1 lakh into 2 lakhs. The other has turned 1 into nearly 9. That’s the power of the stock market.
Bookmark this page and visit it at the end of the year 2021. It’ll be interesting to track the journey of the company.
Where will the Jubilant Foodworks share price be in 2021 and 2022? Post your predictions in the comments section below.
Some additional information about the company:
- Apart from Domino’s Pizza, Jubilant also runs the Dunkin’ Donuts and the Chinese offering Hong’s Kitchen.
- The company has opened a new chain called ‘EkDum’ where it offers Biriyani and other Indian dishes.
- 130 new restaurants were opened in financial year 2020. 123 were Dominos, 4 Dunkin Donuts and 3 were Hong’s Kitchen.
- 86% of sales are from online ordering. This number is likely to increase further.
- Dominos is now charging extra for delivery, this will increase their margins.
- The company has 1373 restaurants in 282 cities – this number will increase further in the years to come.
- A brand new campaign ‘Dil, Dosti, Domino’s’ was launched to acknowledge the change in lifestyle of the new-age Indian consumer.
- The user-experience of the mobile app was improved to make it faster and consumer friendly.
- The Domino’s pizza outlets in Bangladesh has been growing well. The company opened its 3rd store in the neighboring country.
- Interestingly, while 30 minutes is considered to be fast. The company has an ambitious goal of delivering within 20 minutes. The campaign will be called ‘Tees Se Bees’.
- There are 21 Domino’s stores in Sri Lanka, and most of them have been performing well.
- The company has also launched a new beverage brand called ‘Thirsteez’ which is getting good reviews from customers.
- Several new ‘Masala Pizzas’ were launched to suit the Indian taste bud. These were called Kadhai Paneer, Achari Do Pyaza, Paneer Makhani, Keema Do Pyaza, Bhuna Murg and Chicken Butter Masala. The company continues to listen to its customers, make the changes they want and innovate.
Source: Annual Report of Jubilant Foodworks.
How do you like Domino’s pizza as compared to Pizza Hut and others? Tell us in the comments section.