I agree with most of what you have written, except the last para where I have somewhat different views. I agree Pratik Pota has converted Domino’s into a cash machine, and you have described the flywheel effect quite well. I don’t intend to repeat Jubilant’s positives again, most of which you and the previous post by @vkediaonline has already covered. But all these positives are already in the price!
The main risk to the Jubilant story comes from capital misallocation. As a long time shareholder, I am okay with Hong’s Kitchen and the Biryani foray but quite circumspect of various other adventures the company has embarked in recent times.
There is no way Barbeque Nation as a business can give the same returns as Domino’s Pizza (ignoring the listing gains for the moment). In the last concall, I couldn’t fail notice that after an initial attempt at explaining the investment, Pota deflected all questions about Barbeque Nation to Mr. Bhartia.
Coming to Pizza, I don’t think one can assume the India pizza formula will automatically work everywhere. Turkey, Russia et al are very different from India, and what worked here may not work there. There is also the added political and currency risk. Let us not forget that Jubilant’s Sri Lanka operation has gone nowhere after a decade of existence. And it is too early to celebrate Bangladesh yet.
In the past, Jubilant burnt it’s fingers with Dunkin’ Donuts, and Pota is trying his best to turn it around by shrinking rather than growing it.
Little is known about the Chef Boss RTC / RTE foray - how much money has been poured in, how it has done and whether the company intends to grow the line or exit. Little is also known about the Popeye’s Chicken foray announced recently, and I will be keenly listening to the concall for more on this.
So while the Hong’s Kitchen, Ekdum! biryani, Chef Boss and several other initiatives are still in their infancy, throwing more and more money in newer and newer adventures is making me quite jittery of what comes next.