Refused to commit on ssg lfl outlook india.

What is your outlook both from an industry standpoint and your ability to continue to gain market shares as we head into FY '26?

I think great question, Vivek. I would firstly like to say that what is working for us is structural. See, our focus on delivery and then therefore, pushing the boundaries on 20-minute delivery is structural, and we believe that will allow us to gain share going forward. As you can notice, we have dramatically increased our focus on menu innovation, the amount of pace that you've seen, whether it's launch of chicken, Volcano Pizza, 3 new range of cheese burst and now Big Big Pizza, backed by a very strong media investments, we believe will continue to take the momentum. Number three was moving from four regions to seven regions. In fact, we are also testing for the eighth region as North India is beginning to reach more than Rs. 1,200 crores, we are trying to even split it further to drive the focus in micro markets. Number four being rapid expansion of stores. We have increased the pace of expansion of our stores. And last, but the culture, which to me can never be copied. So if I see these five in total, Vivek, it will sound always like self-help, but these are structural because we are operating in a very large market, which is largely unorganized. So if we keep that lens, we'll continue to penetrate, grow more as long as we stay true to these five structural initiatives that we are drawing. So, we continue to remain bullish. And therefore, I'm refraining from commenting on the overall demand sentiment. But again, looking at are these levers working where the market is $60 billion and the organized segment is $12 billion to $15 billion.

For the first time, dine-in takeaway revenues have turned the corner after several quarters of decline. Do you think it is sustainable? How do you plan to build on this in FY '26?

See, we will never lose focus on it, right? So I think it's a yes, there is a big tailwind of delivery and with 20 minute and our own assets on delivery with so much of technological investment behind it, I think that momentum should continue, right, for some time. Now coming to dine-in, we, in fact, I want to share something more that we've taken the -- about 500 stores, which are very dine-in heavy, and we do a mystery audit on it. And in my last 2.5 years at the company, I have never seen such high scores in terms of customer satisfaction, the cleanliness, hygiene, service and of course, coupled with great quality food and outstanding prices. So overall, I think we will – I am relatively more bullish on dine-in to be honest. Now on-premise sale, to the extent we get the data because we break the on-premise sale into 2 parts, dine-in and takeaway. When I joined the company, takeaway was bigger than dine-in. Now dine-in is bigger than takeaway and dine-in per-se is growing very rapidly. So takeaway is also growing -- declining rapidly because there is no reason for a customer to come to the store and take away because the delivery is free. So, I genuinely believe when some of these bases get corrected, dine-in may come back and even surprise me. So I stay very optimistic about dine-in. We are seeing for the first time order growth, right, in dine-in, backed by some of the initiatives that we've taken that Rs. 99 meal that we launched exactly a year ago now with all the marketing support, whenever I visit the stores, I see customers at 3 or 5 p.m. asking, can you give me, I got late or there are customers waiting for that particular service to start. So again, as we focus on great value to customers with superior dine-in conditions and with the new design of stores, I feel very, very good about having a large cohort or a base of customers which may want to go out and eat especially during lunch hours, which we believe we can do even better than where we are.

Domino's full-year margin is at 14.5% and stand-alone margin for the quarter is at 11.8%. There is quite a bit of gap which persists. Can you explain where exactly are you losing so much and what is the way forward to bridge the gap?

So, it is, I think, Suman, can add, this is largely see investments in our emerging brands, right? And when we have like three other brands, Hong's, Dunkin' and Popeyes. And as you would see, we have already taken the stance of curtailing any or not doing any expansion in Dunkin' and Hong's. This is the call we took mid of the year and focusing majorly on Popeyes, you will see that this getting corrected. And in fact, in a couple of years, I do believe this drag should at least there should be no negative surprises from it and drag should come down by half. So very committed to this. We know where it is going. And some of the pieces around expansion of Dunkin' and Hong's, we've already taken, and we will see the goodness coming in or the delta between the Domino's margin and the overall JFL margin should reduce in coming quarters. That's why we are also more confident on the margin trajectory from where we sit today.

While margins are gradually recovering, how does the management internally define the new normal of peak margin? Do you still consider the historical peak or should we not anchor around that number?

Yes. I would say if you look at the peak at post Ind AS was peak was around 26%, right? That is obviously not a sustainable number. And see, the operator in me always sees more juice in margins everywhere, to be honest, right? And that's, when I tell my team every day, I feel there is so much more juice in leveraging data, technology and running a very tight operations. So at least, when I sleep, I worry less about margins then I'm always very thankful for growth, and I always worry less about margin. So therefore, coming back to your question, I see no reason for us that we can't improve to 100 basis points from here. And that's what Suman had also mentioned during our Investor Day, we maintain that stance. We are seeing leverage in the Domino's -- in Domino's in India flowing through. The drag that you see is largely on account of new brands. And we have to invest in new brands, right? In this business, we know it takes 10, 15 years to build a very strong successful brand. Once you do it, then there is no looking back. But we are cognizant, can we do it faster? We are greedier over there. Can we do it in 5 years? That is what we are attempting to do for the first time in the, I would say, a little bit in the history of QSR in India.

The past three weeks has seen heightened geopolitical volatility. How are you evaluating the potential risk, if any, to our investments in Turkey?

So we view these markets very separately, right? And if you go to Turkey, they are oblivious to any political changes, whether it's Domino's or be it COFFY, which is actually a Turkish brand internally, they are not concerned about any geopolitical risk, whether it's tariffs or Russia, Ukraine or anything which is happening on India-Pakistan border. The momentum in the core market and the consumer base in Turkey continues. They are growing in dollar terms. The real GDP growth net of inflation has always been 3% to 4%. And in fact, if I look at just the macroeconomic condition, I typically don't like to talk as a CEO, I'm an operator at heart. In fact, the interest rates have been coming down. The interest rates have been tightened. And as a result, inflation has been coming down in the last 2.5 years that I have been associated. So I feel good about the macroeconomic situation in Turkey and the core thesis that we had, it's the largest consumer base outside of Russia in Europe and the youngest population with almost 3.5x, 4x of per capita GDP versus India. All of those things are intact, and therefore, you see very solid performance of both Domino's and COFFY in Turkey. So I will not worry too much about macroeconomic factors or anything geopolitical risk impacting Turkey.

Do you foresee or worry about any regulatory or policy pressure to revisit the Turkey investment?

Not at all. We don't see anything which is there. I think nothing.

How do we structurally think about the Turkey business and its margins? It has been volatile on a quarterly basis. Do you think this is a stable view we can take forward or is it still evolving?

So Suman, you can take that, but at least from a core market standpoint, see, this is how I track. And therefore, I feel very good about it. See, firstly, the transaction volume should grow, new customers should grow, revenue should grow. Their growth in lira terms should be ahead of the core inflation rate, which is a tick mark. And COFFY should expand at a faster pace versus Domino's, which it is, right? It's a franchisee-led model. Therefore, there is no capital layout that we have to give to open up stores. So therefore, it is high ROIC. None of this has changed. In terms of margin, it is largely accounting level change, which is valuation of inventory in a high versus low inflationary environment. We were sitting on high inventories, which get readjusted or reassessed if your inflation is high after 1 year, and therefore, you get inventory valuation gains. If I look at the core health of the business, again, as an operator, is my volume growing? Yes. Am I ahead of inflation rate in terms of my average ticket size? Yes. Are my franchisees happy and they're continuing to expand stores? Yes. Is my working capital improving? Yes. Is my debt reducing? Yes. So rest everything and it continues to be PAT accretive, right, which was our thesis. Rest everything is to me a little bit accounting. If you just look at slightly longer term in the nine-to-twelvemonth period, it should all kind of, the volatility should go away.

Do you see any difference in growth and demand environment in larger/top-tier cities versus smaller cities, given you have the deepest distribution?

In fact, when I look at growth of Tier-1 to Tier-4 cities and I look at it every month, there is absolutely no difference right? They're all very similar 1-2% points different when I look at order growth, right, and between each other. So we are not seeing, Jignanshu, I go back to the point, it's a $60 billion market with only 1/3 of it is organized. –And, if you are able to create great value, great service, fast delivery and with fast free -- I call it the 3F business, fresh, fast and free, right? If you have these three, there is enough and more growth to be taken. I absolutely see no difference between Tier-1, 2, 3 and 4. It is about, and like I read a lot of your reports and other peers that you have in this call. I think the one learning is if you give a great service, consumers are actually willing to pay more for service than products.

One food aggregator platform called out a shortage of delivery drivers specific to this quarter. Is that seasonality that you also see, given you have the largest delivery fleet?

It is not easy to build these businesses, right? So especially with our own fleet and constantly pressure on getting riders. And so overall, of course, we do see pressure. It happens during the season around April when there is harvesting, right? But these are minor variances, Jignanshu. So like they don't even come to me. The teams are very capable of using data to forecast how much and how many riders they need, what will be the absenteeism. In fact, our best delivery accuracy or the delivery timeliness has been in the last couple of months ever. So I'm very happy to note that customer metrics are improving. And some bit of here and there is more noise to make.

Discounting has been much higher than we've seen in previous quarters, resulting in better LFL growth. How are you seeing discounting trends?

Sheela, in fact, discounting has come down for us. We've always again used technology. It is discounting. So where are you reading it, if I can in fact, discounting was a tailwind to us.

On the Big Big Pizza, I see almost 50% discount on that product. How is discounting for us versus the last 12 months?

Yes. So discounting as a percentage has come down. Now of course, specifically talking about Big Big Pizza, right? So it is a Rs. 700 and Rs. 800 product, right? So it adds to my average ticket price. And therefore, my delivery cost as a percentage comes down, my insider crew cost as a percentage comes down and my rent as a percentage of that order comes down. So there are several tailwinds. It is in fact, generally, customers reach out to me, Sheela, when the things go bad. Big Big Pizza has been one such occasion where customers reach out to me that is this a pricing error? Is this a mistake? When are you going to stop it? It looks like nobody ordered so much food at such price. So again, we are gaining customers. We've been able to grow the share of large pizza by 3x in just 15 days. I would rather take that at this stage andlike I said, I will find the money in terms of margin expansion.

In FY'26, how should we think about the Popeyes rollout plan from a state perspective?

Yes. So, from a state perspective, Sheela, we want to get to a number of like close to 100 and therefore, a lot of marketing investments then starts to look very meaningfully or have a larger base and you can buy media inventory. So that's what we are like whether it happens in 12 months and 18 months, I obsess less about it. But I want each of my new store to be accretive to on the average daily sales, which it has, I'm very delighted that when I see last 10, 15 stores, we open all are accretive, right, and very close to the ADS that we want it to be. Equally importantly, we see month-on-month growth on the ADSs and very positive SSGs in the last quarter. So we have given a guidance of 30, right? I first less whether it's 30 or 35 or 25 or even 45, we exactly know which locations to open. Geographic focus will be largely around North. South will be the biggest geographic focus, then Delhi NCR, and we are evaluating West as we speak. But no further expansion beyond this.

You've highlighted customer acquisition - is there comfort that when sentiment improves, these customers would step up their spending?

Yes, I think I would concur with it, right? So we are very careful on the quality of business we are building, right? And these are not discount seeking. These are value-seeking customers, right, and convenience-seeking customers. So, if you see our repeat rates have remained the same. In fact, our repeat rates have begun to inch up a little right? And while it may be small, therefore, I don't want to celebrate at all. So therefore, I am very happy with the quality of customers we are acquiring. In fact, our install to first order rates are at an all-time high. So typically, what digital performance marketing teams will do is they will go for very high installed base and therefore, hope and pray, some percentage of customers will order. Actually, we have reversed it. Our installed base, if you look at the quarterly install of apps has kind of been thereabout. But the percentage of customers ordering has improved, which means that our offerings, our service, our reach has improved and we are acquiring better quality customers. So no concerns over there at all.

You mentioned 250 stores for Domino's India. Can you give a ballpark split - metro versus non-metro?

Yes. So, I think like I said, we have a list of 1,000 locations, right? And out of that, some 700 to 800 is white locations where we don't serve, right? The remaining are splits, right, in the overall. So split in the overall scheme of things, not -- splits are not going to be more than 20%, right, or thereabout. In one quarter, we may do more split because we found the right set of rentals and space and the others, we will do less split because we were able to find more lucrative offers in white areas.

Consol and standalone net profit this quarter are almost exactly the same. Is it possible to borrow in India at 8-10% and pay off higher-cost Turkey debt to widen the gap?

So let me take that question, and thanks for the suggestion, Percy, and I think we'll be happy to hear we are already in implementation mode. But I agree. I think that there are a couple of things, right? When you look at consol and it's not only Turkey, we have a couple of other businesses as well, which is Sri Lanka and Bangladesh, where we continue to invest. So that also and as the trajectory of profitability on those improves, we will see that also flowing through into consol, which currently is a negative number, which offsets the profits even that Turkey has brought in. The second point of expanding the India numbers anyway, we have already spoken about it. Coming to Turkey and the loan, we have already looked at refinancing and the interest rates in Europe are even lower than India at the current rate there, even after taking into account the euro- rupee or the euro lira translation impact. And we're already looking at refinancing the debt of Turkey. So, Turkey will not be sitting on a high cost of borrowing starting this year, which we're already in work in progress on. And the second part is overall Turkey, if we look at a couple of years ago, did not have such significant borrowing at the local level. It was not existing. They had certain restrictions on account of inflation, of course, the Russia business that they had a few years ago, which has increased the borrowing rates. With that coming through, we also expect Turkey as a business to be at minimal or zero debt coming into next year, calendar year, I mean. All in all, you should see the overall PAT improvement between the stand-alone and consol coming through between these three businesses as they start flowing more numbers of profits into the bottom line.

The 200 bps of margin potential on stand-alone mentioned earlier - over what time horizon is that?

So, I think we said in the Investor Day as well, right? We had called out we said over the next 3 years, FY '28. And we said it's a minimum of, right? Of course, it all depends.

On new product development in Domino's India beyond pizza - chicken wings and Cheesiken. What kind of contribution are they hitting right now, and are they helping drive higher dine-ins, customer acquisition, and dayparts?

Yes. No, Ashish, great set of question. I think there are -- you are talking about disaggregating growth into multiple vectors. So, chicken is one adjacency, which is an important vector. So, customers order pizza when they're craving for cheese and when they want to share. So chicken wings, chicken poppers, the bites range that we have and the boneless fried chicken that we've launched, right it is exceeding our expectation. In fact, I spent every Monday morning with my sourcing team to source for chicken wings because we are constrained on supply of chicken wings. So we had to ration chicken wings and in fact, stop the business in North and West to serve South and East, right? So, it will give you an indication that even like a product which has been launched in just 4 or 5 months is gaining traction more than that we thought. The salience of the product, obviously, is higher in East and South, where it is a larger non-vegetarian eating market, and it is ahead of our plans. And see, I again look at this as a Rs. 1,000 crore platform. right? And I genuinely believe the range of chicken, right, as an accompaniment to pizza will definitely get to that number. It gives me all the more confidence in terms of growth rates I see in the store, attachment rates and the customer feedback that we are getting. The second vector you mentioned was what can you do for lunch, right, or late night, right? I think teams are working. We are iterating with options for lunch, and we should launch very soon, focused on the right set of markets. The Rs. 99 four-course meal lunch available in dine-in is doing very well, continues to be the growth driver over there. We have extended a different version of it at a higher price for delivery customers, that is now beginning to do well and teams are building more propositions, which are either focusing on value-seeking customers or customers looking for state IP because that's another, and comfort that is another vector we are focusing on. So multiple of these vectors in play, and you will see the continued pace on product innovation with very sharply targeting a certain occasion, meal hour or a set of consumer cohort.

On Popeyes - medium-term guidance of 250 stores, this year was 19 stores, next year 30. How should we think about the 250 store guidance - is it a 3-4 year phenomenon or longer term?

Yes I think the -- I think you definitely begin to see acceleration going forward, right? And again, like I said, we are nearing the playbook that we want to build to get to the -- firstly is to get to the right three things which are the most important. Number one is the store capex and model, that we know what is working, what is not. In 3 years, we have now a very good sense, and we've been able to bring down capex, right? We have sorted the supply chain. We are leveraging the Domino's supply chain. Therefore, that translates into gross margins, right, which are very healthy, right? The third is the customer love, right? So this is the trilogy. And these 3, therefore, I feel very good about solving like almost 80%-85% of this trilogy. We know margins will come, right, and we'll get to that number. So once we get more data in the next couple of quarters, we should also expand beyond that.

The implied revenue for other businesses (Dunkin', Hong's, Popeyes) is roughly Rs. 200 crores with EBITDA loss of roughly Rs. 130 crores. Is there anything else sitting here, and is a large part of it in Popeyes because of investments?

I would say the losses in Dunkin' and Hong's are also not less, right? So except for the fact that Dunkin' and Hong's were there and we have corrected a lot of it, and therefore, you will see more goodness coming in, in the coming quarters from this portfolio.

Are you witnessing any inflationary pressure on cheese or any of the raw materials?

Yes, I think we are. I think there are a few commodities which have gone up, especially in cheese, oil and coffee, right? These are the, I would say, the top three. There are some tailwinds. Flour, I think what the team is telling me also gone up, but the crop has been really good. So we expect some of the prices to moderate. We are seeing it. We have covered a few areas, right? And so at least the internal plan, again, is to beat the inflation through internal efficiencies, better utilization of our factories, lower conversion costs, lower logistics cost, right? But, I do see inflation in the manpower and wages and those things will be there. But overall, I think the inflationary environment is, I would say, relatively benign because oil prices have been stable. The crude oil prices have been stable for a long time, the power fuel has been stable. So there are certain, I worry less about inflation, what I used to worry 2 years ago.

On the Rs. 99 lunch menu - what kind of SSG delta has it contributed, maybe 200-300 basis points or lower?

See, in lunch hours, definitely order growth more than that, right? So again, the way we look at our businesses is, first, order growth comes in, which acquires new customers and the repeat follows, right? So on lunch hours, Shirishji, it is more than the number that you are seeing. But it's a very dine-in-focused product, offering outstanding value and every time I visit stores and I ask customers what got you here during lunch hours, 4 out of 7 customers actually will end up saying it was the Lunch Feast that brought us over here. So it's a very popular product. Again, we have to stay invested. I think it can be much, much larger than where it is, and we should not lose focus on building this as truly the best dine-in proposition that the entire QSR industry has to offer.

What inflation are you working with for milk and chicken specifically given initial reports suggest they are expected to rise?

So I think overall basket, I was -- because I was looking at this yesterday, so let me answer and Suman can add. 2% to 3% is what we are working on as from our food and paper, right? So, that's raw material and packaging material. I think we will be ballpark over there. It may be higher in milk, but we have covered ourselves. It has surprised us in oil, but the palm oil and cooking oil, it has started to cool down, but we are seeing some benefits elsewhere and therefore, 2%-3%. All of that or a large part of it should be neutralized by internal initiatives.