Jubilant FoodWorks Ltd., master franchisee of Domino’s, listed on Indian exchanges in February 2010. Its store count, which stood at around 300 then, crossed the 1,000 landmark during last February, implying a growth of ~320%. Its Domino’s stores count stood at 1,004 in 230 cities, as of February 11, 2016. The company also operates Dunkin’ Donut stores in India.
The IPO of Jubilant FoodWorks was priced at Rs145, and closed at Rs229 on listing day February 8, 2010. The stock has performed well over the last few years, reaching an all-time high of Rs1,959 on July 7, 2015. However, it has been correcting since then, hitting a low of Rs887 (intra-day), on February 12, 2016, before closing at Rs964. In other words, the stock price halved in this period of around 7 months.
After that, the stock recovered and crossed Rs1,300 in May, 2016. Yet again, the stock turned weak and dipped below the 1,000 mark on May 24, 2016. This was attributed to rumours about the company’s food safety standards. The company refuted all such rumours.
Incidentally, the stock price fell below the Domino’s store count only for the second time since June, 2010. After the company refuted these rumours, the stock has since recovered to the Rs1,100 level.
This article does not constitute investment advice, recommendation or solicitation, to buy or sell the stock discussed.
We would like to clarify that there may be no direct correlation between the store count and stock price. The store count could drive sales, but not necessarily profits, which ultimately drive the valuations and stock price, for any company.