The call and the levels

First, the parameters. On upgrading, Motilal Oswal values the India business at 28 times and the international operations at 18 times EV/EBITDA on March 2028 estimates, deriving a sum-of-the-parts target of Rs 625 — roughly 27 percent above the ruling Rs 494. The counter has ranged between Rs 409 and Rs 671 over the past year.

Domino’s: the same-store slump turns a corner

The pivotal number in the release is Domino's like-for-like growth, which had bled from double digits to a whisker above zero before ticking back up. The chart below traces the descent to the trough and the first sign of a turn.

Standalone revenue rose 9 percent to about Rs 1,850 crore, with Domino's like-for-like growth improving to 2.5 percent against a demanding year-ago base of 12 percent, and order volumes up 6.5 percent. Delivery revenue climbed 12 percent and average order value firmed high single digits sequentially, while the dine-in and takeaway channel — now a dedicated turnaround programme, with about 400 stores being upgraded and value plays such as a Rs 119 meal — showed early stabilisation. The network keeps widening: JUBI added 67 net stores in India to 2,529, and management holds to its plan of roughly 300 openings a year. Its own apps reached 1.95 crore monthly active users and 58 lakh monthly transacting users.

Popeyes: the second engine roars

If Domino's is the recovery story, Popeyes is the growth story. The fried-chicken chain delivered revenue growth of about 97 percent and like-for-like growth above 45 percent — its third consecutive quarter beyond 40 percent — with average daily sales per store crossing Rs 95,000 and topping Rs 1,00,000 in several cities. Management, which now casts Popeyes as a genuine second growth engine, aims to build it into a Rs 1,000 crore brand over three to four years, adding 35 to 40 outlets annually from a pipeline of locations already identified. Restaurant-level profitability is visible, even as marketing and brand-building spend temporarily caps segment margins.

International: growth abroad, an accounting drag in Turkey

Overseas, the picture is mixed but broadly healthy. DP Eurasia revenue grew 28 percent to about Rs 670 crore, though reported profit fell on a lower monetary-gain benefit under hyperinflation accounting; stripped of that quirk, its EBITDA actually rose 29 percent. Domino's Turkey's like-for-like edged down 1 percent and the COFFY chain's fell 13 percent on an inflation-adjusted basis, while the smaller South Asian markets sprinted — Sri Lanka up 41 percent and Bangladesh up 26 percent. Consolidated revenue, pulling all of this together, rose 14 percent to about Rs 2,570 crore.

Margins: pricing and productivity hold the line

Profitability proved resilient against a hostile cost backdrop. Gross margin expanded 130 basis points to 75.5 percent, helped by a 140-basis-point net price increase, a richer mix, lower wastage and supply-chain efficiencies. Having initially braced for a 200-basis-point cost headwind this year from liquefied petroleum gas, labour, cheese, oil and chicken, management contained the hit to about 20 basis points. Standalone EBITDA grew 10 percent to Rs 360 crore. Adjusted profit slipped 1 percent, however, weighed by higher depreciation following the commissioning of a new Mumbai supply-chain centre — a timing effect as much as anything, with management targeting roughly 200 basis points of EBITDA-margin improvement over time, split evenly between Domino's and the emerging brands.

Earnings trajectory and the valuation case

Motilal Oswal models a standalone revenue growth rate of about 13 percent over FY26-28, carrying revenue from Rs 9,510 crore to Rs 12,070 crore and adjusted profit from Rs 410 crore to Rs 620 crore, with the pre-Ind-AS EBITDA margin settling in a 12.5-to-13.0 percent band. Return on equity is seen climbing sharply toward 27 percent. The upgrade rests on that improving trajectory — a 5-to-7 percent medium-term same-store runway at Domino's, Popeyes's momentum and steady international performance — rather than on the multiple, which remains full at over 50 times FY28 earnings.

Risks to weigh