Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Jajodia. Thank you, and over to you, sir. Good evening, everyone, and welcome to Jubilant FoodWorks Limited Q3 FY24 and nine months FY24 earnings call for investors and analysts. We are joined by our board members, Mr. Shyam S. Bhartia, our Chairman, and our CEO and MD, Mr. Sameer Khetarpal. We will commence with key thoughts from Mr. Shyam S. Bhartia, and then turn to our CEO and MD to share his perspective. After the opening remarks from the management, the forum will be open for the question and answer session. As you are aware, Jubilant FoodWorks Netherlands B.V., which is the wholly-owned subsidiary of Jubilant FoodWorks Limited, has launched a cash offer to acquire the remaining issued and outstanding share capital of DP Eurasia, not already held by JFL. On conclusion of the open offer, as per the advice by our auditor, Deloitte, required accounting would be done as per Ind AS 110. As a result, JFL has continued to consolidate its investment in accordance with the provision of Ind AS 28 and accounted for its investment, considering a lag of three months period after considering the necessary adjustment for material transactions from the latest financial statement of DPU up to the reporting period of the group. As of yesterday, based the market purchases and offer acceptance received from DPU shareholders, JFL will hold 79.02% of the shareholding. We will be releasing subsequent update on this, by end of the day today, as today is the last date for the close of open offer. Therefore, JFL has also given a notice to the London Stock Exchange for cancellation of listing and trading of shares of DPU, which would take effect on or shortly after 8 A.M. U.K. time on February 28, 2024. Therefore, today's call is meant for discussing our India business only. We will be organizing a separate call to give you an update on our international business. A cautionary note: some of the statements made on today's call could be forward-looking in nature, and the actual result could vary from the statement. A detailed statement in this regard is available in Jubilant FoodWorks earnings documents. I would now like to invite Mr. Shyam S. Bhartia to share his views with you. Thank you, and over to you, sir. Thank you, Deepak, and good evening, everyone. Welcome to our earnings call. The team at JFL is focused on basics, investing in the right areas to get growth back in Domino's, building capabilities for the future and scaling Popeyes. We are happy to share that we have crossed the milestone of 2,000+ store network for the brands in India and progressing well on our network expansion plans. We observed softer demand, particularly post-Diwali and in December, while November was strong. One, delivery has become the most preferred channel, driven by consumer preference for convenience. The channel is significantly ahead of its pre-COVID performance, and this plays to our advantage. Focused efforts on combo sales and initiatives to drive consumer upgrade resulted in highest ever ticket in last 9 quarters. Notably, this is an organic improvement, no price increase in last 6 quarters. Third, we are able to deliver record performance during the festive season, with World Cup finals and Diwali being the bigger than previous year. However, the performance was subdued on non-occasion days. As a company, we continue to have incessant focus to improve performance despite demand volatility. Fourth, the current slowdown appears cyclical, mirroring the impact of inflation on mass discretionary consumption, and doesn't change our outlook of food service industry. While the positive outlook of food service industry, we continue to stay focused on our strategic direction. It is based on simple premise: serve the ever-changing consumer with highest quality product at the lowest cost. This is reflected in initiatives undertaken by the team. Latest brand refresh for Domino's, "It happens only with pizzas," aimed at serving two broad purposes. A, reimagine brand as a companion for every joyful moments for the new generation. B, grow share of pizza occasions. With Domino's being leader in pizza category, we intended to increase pizza occasion share in $51 billion food service market, where pizza is just $1 billion. Second, commissioned Jubilant Food Park, Bangalore, in November. With each new commissary, we are advancing and pushing the limits of back-end efficiencies. With the envisaged benefits, the expected payback will be within four years. At closing, I would like to share that we always adapted continuously to circumstances beyond our control, while being thoughtful and deliberate in our spending. This current rough patch will be no different. With that, I request Sameer to share his perspective on the quarter gone by and progress on our initiatives. Thank you, Mr. Bhartia, and good evening, everyone. I wish you a very warm welcome to this investor call today and a Happy New Year. I would like to start with sharing some highlights. In the last quarter, and even before that, we have gained in market share. Domino's has gained in market share. Delivery continues to be like-for-like positive as improved proportion of orders were delivered under 20 minutes. As mentioned, in previous calls, we have a distinctive advantage because of our network and store processes, to offer hottest pizzas in 20 minutes in top metros. To win share of occasions, like Mr. Bhartia talked about, in a $51 billion market, pizza is only $1 billion. We have relaunched our brand with the tagline: "It happens only with pizza." We will continue to invest behind the brand and grow the category, as two-thirds of the food services industry is unorganized. On the technology front, the app had 10.5 million monthly active users. Customer conversion was at the highest ever in the last quarter. We launched better couponing experience, leading to better attachment of coupons and improved card and payment experience. This will continue to improve further as we scale these tools inside the app. Cheesy Rewards enrolled customer base is up 102% year-on-year, and now at a record of 21.5 million customers. Customers can now order their favorite pizza on apps integrated with ONDC. Domino's opened 40 stores and entered Q4 with the strongest pipeline ever in terms of approved store and stores under construction. We are on track to open 200 stores in the financial year. Pace of store opening, which we have talked about in the last call, is now materially up to 10 new stores. Customers in Mysore, Bangalore, Cuddalore, and Mohali can now relish bold Cajun flavors of Popeyes. We continue to witness long queues outside the stores when we open, and are confident of making Popeyes India's fastest QSR to achieve a revenue of INR 1,000 crore. We are positively surprised by Hong's Kitchen and the underlying performance trajectory. It is scaling ahead of our plans. We added four new stores. Dunkin' also added four new stores, and we are happy to note the progress on coffee first strategy. For the last calls calls, I have been talking about Project Vijay. We can see the results of it, and the gross margins improved by 118 basis points, despite a 118 basis point year-on-year, and despite a negative LFL of 2.9%, we held on to the EBITDA of 20.9%. The Jubilant Food Park in Bangalore is now fully operational, and we expect to sustain the goodness in gross margins. Overall, we stay focused on growing the market, bringing innovation in products, accelerating technology, technological capabilities, capturing white spaces to expand, and building a strong culture and team at JFL. I recognize the biggest question on your minds, and our shareholders, will be: Why is the LFL negative despite festivities in quarter three? Indeed, LFL was 2.9%, all led by dine-in, while delivery was positive. Like I alluded earlier, the average ticket size, without taking the price point, was the highest in the last nine quarters. In fact, if I step back, the decline in dine-in started in 2017, when aggregators started to build their food delivery business. Post-COVID, it suffered materially more. However, we realize this is an industry-wide trend, but we are not going to give up on it. As we grow delivery, we will continue to improve our dine-in experience, reimage stores at a healthy pace. We continue to witness sales in dine-in as we improve experiences. Several more measures are being executed as we speak. Once the cycle of mass consumption turns, we should start seeing the benefits of dine-in being supportive to the overall growth without any cannibalization. Let me share our thoughts on two key updates for Q3 and the rationale behind them. Firstly, as I shared, we invested in repositioning of the brand, with "It happens only with pizza." As leaders in this pizza segment, we're two-thirds of our, with nearly two-thirds of market share, the job as leader is to expand the category and win and get more share of occasions versus more share of from competition. In a $50 billion food services market, as I mentioned, pizza is a minuscule $1 billion, so the job for us is to gain share from other cuisines and grow the category. As a platform, "It happens only with pizza" allows pizza to gain share from these categories, not limited to QSR or international food. The investment behind Project Vijay, the savings from Project Vijay will help us invest in brand building without diluting our EBITDA. With inflation moderating, we believe that this is the right time to invest more in the category and in our stores. Secondly, another question on your mind will be: What drives our conviction to opt for an asset-heavy CapEx model of commissaries, rather than tying up with multiple vendors to build our supply chain? A major reason why we are successful, as Mr. Bhartia said in his opening comments, that we are able to deliver highest quality food products, which are safe, tasty, but also at the lowest cost. The recently commissioned Jubilant Food Park in Bangalore is the largest and the most prestigious food processing unit, adding unprecedented new capabilities for business growth across multiple brands at JFL. The facility is designed to serve 750 Domino's stores, 300 stores of Popeyes, Hong's and Dunkin'. In addition to the usual two manufacturing capabilities and a cold warehouse at our supply chain center, the Bangalore Food Park has large factories within the factory for chicken toppings, chicken marination, bakery product, central kitchen operations, seasoning manufacturing and state-of-the-art automation inside the factory. It gives us a unique cost advantage, along with end-to-end value control over the value chain, and as a food supply chain company, has to be managed with utmost care. With a four-year payback period, we have a strong business as well as financial rationale to continue building on even stronger competitive advantage over peers. As we speak, the construction of the Mumbai factory is in progress, and these investments are quintessential for our continued outperformance and long-term success. To sum up, we will continue to invest in our customers, grow Popeyes, scale through technology and invest in our employees. We are confident of the turnaround in Domino's, and we'll fund most of this through internal efficiencies. With that, let me turn over to the moderator to initiate the Q&A for the session today. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of Manoj Menon from ICICI Securities. Please go ahead. Yeah. Hi, team. Good performance in the, you know, context of consumption, what we are otherwise observing- Sir, Manoj, can you use your handset mode, please? Your voice is not very clear. Yeah, sure. Is it, is it better? Yeah. Yes, Manoj. Okay, just a second, sir. My volume. Yeah. Yeah, I was just saying that, you know, good performance in the context of the consumption what we are otherwise observing, maybe except loyalty being an exception. So Manoj team, couple of questions or clarifications. One, you know, if you could give some more quantitative color on, you know, the loyalty program. While I understand the enrollments has been impressive, but, you know, the assumption, let's say 12, 15 months back was that, you know, this is likely to result in market share gains for you. Essentially, either it's frequency improvement or, you know, consumers flocking back to-- And actually, that was the experience we kind of read and understood about what happened to DPZ, you know, the U.S. company. So any color on the loyalty because it's been a good, I think, 15, 18 months, you know, of implementation. Yeah, Manoj, I think you've been very consistently asking about loyalty and I appreciate that. So I think we have 21.5 million members. A large majority of them have actually gotten one pie, two pie, and folks, and again, a material of them, a good proportion of them also have gotten their first pizza free. So if you recall, pizza frequency is three in India, and to earn a free pizza, you need six pies. So the customers who have gotten six pizzas or six pies, that base has gone up materially, Manoj, and we continue to see that base grow, and that base is very sticky. The base of customers ordering nine plus pizza, six to nine pizzas, is almost up by 10% when I look at year-on-year. So that is kind of helping us gain market share, right, within the category. To me, I owe this a lot to this program. Secondly, I think the frequencies are not gone up to the extent that we want, but they have definitely moved when I look at an 18-month period. For the last couple of quarters, it has been flat. I attribute more this to softer demand environment and dine-in being slow. So whatever, like, I would have expected this to start resulting in positive like-for-like growth, that is negated by... And online is positive, like I said, because this program is largely online. While it is available offline, but most customers prefer it online, therefore, the online part of the business is positive, like-for-like. I wish we are able to take the proposition on dine-in also, so therefore we can get the benefit of this loyalty program in dine-in also, while it is available in dine-in. It's just little harder for customers to imagine, visualize, versus doing this on their phone. Understood. Sameer, just one clarification. So is it fair to then, you know, make a statement of hypothesis that, the current, performance, what you're actually seeing on the online part of a delivery part of your business, is, is fully basically, all the benefits of loyalty is visible, currently, right? Or maybe material portion of it. Yes, absolutely. Absolutely. These benefits are beginning to flow through. We are seeing very strong stickiness of our customers on our app or even with aggregators, right? Because they even order on aggregator app to claim the free pizza, they have to come back to Domino's app. In fact, we are thinking of strengthening the program in line with what US has done. So there is a program already underway, how can we invest more behind this program? Understood. Secondly, Sameer, quickly, you know, on now, if I heard the number correctly, I think about 80% of all deliveries are now less than 20 minutes, right? Yeah. About 66%, about 70% deliveries- Okay. are under 20 minutes. Okay, understood. Sameer, one of the important agenda which you have been driving over the last few years actually has been to, let's say, come closer to the customer, right, which essentially means split stores, so that, you know, you moved from the 30 to 20. Is it fair to say that that journey is largely traversed with, you know, because what I'm trying to understand is, you know, look, a split store by definition is a drag on. Certainly you're adding negative operating leverage and kind of... Is that investment phase largely coming to it, or you still think, you know, there is still a long way to go? Yeah. So let me tease this out a little bit, Manoj. So firstly, the most convenient seeking consumers like you and I are in top seven, top nine cities, right? So if you were to go to Lucknow or Kanpur, there we've done the experiment, if you move from 30 to 20, the benefits are not that material. Of course, customers like it and, there is, the brand improves. But the material benefit comes if you are in Goregaon or Andheri or, Koramangala or Gurgaon, right? These are the places where we see the most convenient seeking pin codes are, and the moment we move to 20 minutes, we see faster growth. Case in point being Bangalore, where we have consistently been positive like for like. Now, we have 200 stores in Bangalore. Our endeavor is not to add more stores unless and until the store is struggling and bursting at the seams, and that's a good problem to have. So I would directionally agree with your statement, but I also want to consistently give 20-minute delivery in top cities. We may have to add a few stores. The number of split stores have come down because the like-for-like growth is not there. So had there been 4% or 5% like-for-like growth, I would—we would have added another 25, 30 stores for split, which we are not doing at the moment. Thank you. Thank you, Sameer. Good luck. Thanks. Thank you. We have our next question from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi, good evening. My first question is, you know, Sameer, you mentioned in your opening remarks that Domino's gained market share. How do you define market share in, you know, or how do you measure market share in pizza category? So there are three ways to do this. Firstly, there are publicly listed companies which report their numbers, so which is easy to do. Second is we get market share information from aggregators. And number three is we also do our own internal tracking of market share based upon few stores that we track. On all three accounts, we have gained market share within the pizza category. You know, just a follow-up, Sameer, in the context of, you know, let's say there are enough and, you know, enough number of, let's say, pizza outlets who have come about, which have, let's say, store count of anywhere between 100+ to as much as 600, 700 or even higher. How is it, you know, how is it that these are not impacting your market shares?... is, you know, something I'm unable to understand? So, I mean, I mean, if you see the, just to kind of take your question head-on, Vivek, there are only three players with more than 100 stores. Domino's, Pizza Hut, and, and La Pino's then should correct me, right? And we do have internal mechanisms of tracking, tracking store level sales, catchment level sales. Of course, will it be 100% accurate? No, but will be directionally with aggregators, with listed companies and, and our own internal tracking, all three are indicating share gains. Interesting. Interesting. If you take all 15 pizza chains, we have around 4,000 outlets, from all these 14 pizza chains. So it's coming from our proprietary study, but just to tease out a larger impact, because you made a very big point. If you see the outlet count, we would be around 46.8% in outlet share, but our revenue share is 69.7%. So the high throughput done by Domino's translates to a dominant market share gain, and that's the point which Sameer sir was also explaining in opening remarks, that gaining incremental share from less than 70% - 72% in pizza category will lend us nowhere, and therefore, we invested the savings from gross margin to improve the category. These numbers are very helpful, so thanks for that. The second thing is on the dine-in bit, what is your, you know, assessment of what's happening, you know, because I think the whole issue around, you know, let's say, cannibalization and all of that was perceived to be more on the delivery side. Of course, delivery has, you know, also, you know, moderated a bit. There is macro environment, but dine-in is the piece which is, you know, which is quite, quite a bit of, has been quite under pressure. What is your assessment on that? Because you also mentioned that you are not giving up on dine-in, so what needs to change over here? Yeah. So, Vivek, as an overarching statement, we want to serve customers wherever they are, right? Whether it's an ONDC, aggregator, our own app, dine-in, carryout, right? In a mela, in a fair, on a train. So we are building multiple channels based upon a physical store infrastructure. So that is point number one, just keep that in mind, right? Now, if I have to serve even in a moving train, the physical store is important. But your question is more specific on dine-in, what is happening? It is a worldwide trend, Vivek, if you look at U.S., Europe, including emerging Asia, the dine-in on-premise sales are declining and delivery sales are improving, and where the Domino's has a strength. Now, specifically, what is happening in dine-in is, India has lowest cost or lowest price per delivery anywhere in the world. And therefore, delivery comes out to be more convenient and relatively cheaper versus anywhere in the world. And therefore, we are doubling down on delivery. We should grow faster, and that is the objective over there. In dine-in, customers in, if overall dine-in share is, let's say, 35%, in tier three, tier four cities, it is about 50%. So it is still a material channel for us, and we want to invest behind it. It is hard to pinpoint that if there is one reason which is only pinpointing to weakness in Domino's only. All we care for is we should continuously benchmark our experience, improve it, and every time the customer comes over there, we get great value, a functional experience, and a very consistent functional and consistent experience in the store. So therefore, we have spotted about under 50 odd stores, which were... We did not meet our threshold. 66, we have already reimagined. We do see 8%-12% growth in the store immediately and sustaining, and then about another 50-60 stores that we want to reimagine. Then we get into a recycle of, like, a healthy pace of reimagination every year. So there is a pressure on dine-in, but it is still a significant channel, and it is also a channel where we believe we can recruit more customers. In food, seeing is believing, and the, you know, the most stickiest customer that we have in our, in our portfolio over the years, their first purchase was on dine-in. Got it. And just a follow-up, and that would be my last one. Sameer, have you analyzed, I, I'm sure you would have, historically, I think the earlier management view was that cloud kitchen doesn't make sense. But what is your view, given how delivery is, and, you know, for cloud kitchen, for a new brand, the biggest issue is creating brand awareness and therefore higher take rates to aggregators, which is not a problem that you face. So do you think that the next wave of, you know, store expansion, also because you are promising 20 minutes delivery, do you think cloud kitchen will be a way forward, at least, you know, at least in the top 10 cities? Yeah. So I think the I would just nuance it from cloud kitchen to what we call as a Delco store, right? And I think the somewhere this is the innovation done by Jubilant FoodWorks long before I came in, and the world is more enamored by dark stores. The highest payback period, the payback and the ROC is actually what we call as a Delco store. It is slightly bigger than a dark store. It is marginally more visible than a dark store. Almost the same CapEx, but customers can also come in, take away their orders, but still not seeing it. So we have material number of stores. In top seven cities, we do ask a question: Why do we need a 1,200 sq ft dine-in store when there is a store available in half a kilometer? So we take those calls. If there's a new market that has developed or there's a new mall that has come up, we are happy to open a dine-in and a delivery store. But the operating word for me is not dark. The best payback period in India actually is in a Delco store, which is delivery and carryout, but visible to the customers. The rental saving is minimal, to be very honest, far more compensated by the incremental carryout sales that one gets. Got it. Got it. Thank you. Wish you all the best. Thank you, Abhishek. Thank you. We have our next question from the line of Amit Sachdeva from HSBC. Please go ahead. Hi, good evening, everyone, and thank you for taking my question. So, Sameer, my question is on the value proposition for pizza as a category. And obviously, as the inflation has been very high, and we have talked about this in the past as well, that, you know, there was a significant downtrading in pizza categories, which led to also you to, you know, launching several value for money products, et cetera. And now, can you give us a little... Because given that phase of inflation is now bit way past, have you started to see some of that downtrading that was hitting the category, at least has started to sort of wane and come back and you see customer willingness to pay for maybe slightly higher value pizza is increasing, or you see still pressure on category continue? That's, point number one, but I'll have a follow-up to that on the premium side of things. But if you can perhaps give us some update whether the downtrading has stopped in the category or not. Yeah. So, so at least as we look at data, Amit, that downtrading has declined in our system in the last quarter, and like and therefore, we saw the highest ticket size in the last eight or nine quarters. Now, one can say how much of that is pure macro driven by customer behavior and how much was it in our, with our efforts? Hard to say, but we took several efforts to improve the ticket size. Mm-hmm. One was, we launched the Viva Roma range of gourmet pizza, which are doing very well. We relaunched it, rather. It is doing materially better, becoming a, very strong business just in few stores that we have launched. Second is, we purposefully targeted our discounts towards more discount-seeking customers and lesser towards customers who are not. So that is one piece where we saw discounts being more targeted on, on, I would say, our regular pizzas versus Pizza Mania, and therefore, we saw the increase. For the first time, we ran the offer of, buy two, get one, across all channels, aggregator, dine-in, OA, but those were not on Pizza Mania. So we purposefully took some actions, Sure. Therefore, we are happy about the ticket size, but I am not happy about the new customer acquisition, which if we were to target on Pizza Mania, we would have seen that. So it was a bit of a judgment call we took, assuming the underlying new customer acquisition will continue to be there, and therefore, it's reflecting partially in our like-for-like growth. So we are learning from it. We are getting better at targeting our discounts. So inflation is definitely moderated. It is on the commodity side, but the inflation on it is not negative. Inflation is still there. Secondly, we are seeing inflation in wages, right? Mm-hmm. So, bit of when you look at our basket of consumption, that is oil, electricity, diesel, petrol, gas, raw materials, it is still material in terms of inflation. Got it. No, that's very helpful, Sameer. I think I will take the question in a mirror image to the premium end as well. Like, we both test in various categories. The premium side has done very well, and the rest of the case, the mass when, you know, mass end is very. Which is more impact we have seen in the consumption side. But in that, pizza is a category where the marginal growth is coming from mass, but I would assume that large consumer, very frequent consumer of pizza, also would be a consumer cohort of very premium customers. But in that, but they also perhaps seek value at some level. Given that, you know, that pie was growing, at least there, there was a large spend there, have you been able to monetize some of that tailwind that was coming? Theoretically, at least we understand from a distance, there was some tailwind there. But have you been able to sort of launch some new categories in pizza? Gourmet pizza, perhaps you can comment whether it was successful or not. But was the pricing wrong? Or you could have been, you know, you know, very, a value offered in the gourmet pizza kind of positioning you could have created so that there's a value locking here which others can't offer and you can offer. Do you see some opportunity there, or is it, like, very small and it's not meaningful for you? No, I think the... So firstly, I take your point on premiumization. And therefore, investing in the right product and the processes to relaunch Viva Roma is paying benefits. Now, you are saying, can you push the envelope further by- Yeah. Doing price corrections? It has only been six weeks since we launched, relaunched it, Amit. Definitely on the cards. We are also seeing, can we look at smaller size pizzas versus larger size pizzas? So that piece, the team is experimenting as we speak, and I'm hopeful that we will, you will—we will invest behind and I think your point is around why do you have to charge prices equivalent to, equivalent to, some of the other gourmet players? My answer to that is, it is always easier to reduce prices than increase prices. Mm-hmm. So we started with a higher price point or an equivalent price point, but a competitive price point. We've been running high discounts also on that one, specifically targeting, so almost INR 300 off on a INR 1,500 purchase of gourmet pizza. So that is material in terms of- Sure. So we are using more promotion to learn, but I will not be surprised that we take some price corrections on the gourmet range to be more competitive and make it more mass. That's the point you are making. I- Yes. I'm also in the same camp. Okay, great. No, that, that's very helpful, Sameer. Thank you so much for, for clarifying that. Thank you, Amit. Just a small bit on, you know, Hong's Kitchen, you seem more excited now about the format, and obviously it's a small one. You've opened four stores, then you may have which you've stabilized and you start seeing encouraging trends. But do you sort of still talk about running that format using the same own store format, or is there wider options open that business model could be different for expansion here versus other formats that you've done so far? Or it would still continue in the same pace and as it is going. What I need to say is, can you see more aggressive rollout through variety of means in this format? Yeah, I know. I think, and Amit, again, thanks for being consistent on this question and pushing us towards the learning that some of the other QSR companies have had on franchisee model. We are learning. In fact, one of the reasons of acquiring DP Eurasia was their unique franchisee model, which is probably, to the best of my knowledge, is outstanding and North Star from anywhere in the world that we know of within the Domino's system. We will definitely learn from it. I think this franchisee models, at the right pace and with the right rigor, we should bring to Hong's and some of the other, other places. Very much on the card, but right now I want the Hong's team to, to have the highest throughput per store like Domino's has for Domino's anywhere in the world. Once we get that, we will definitely evaluate where to franchise. In fact, there are multiple, at least internal strategy papers that we are writing, where we can franchise and not, in the context of Hong's. Okay, great. Thanks so much, Amit. Thanks so much for your answers. All the best. Thank you. Thank you. We have our next question from the line of Latika Chopra from JP Morgan. Please go ahead. Hi, thanks for the opportunity. Few questions. The first- Ma'am, we cannot hear you clearly. Can you hear me now? Is that better? Are you on your handset mode? Yes, I am. Can you increase the volume a little? Little better? Little better. You may go ahead, please. Sure. So my first question was, you know, you mentioned that the split store sales could moderate going forward. Do you think this could influence in any way your future expansion plans? Hear you. Yeah. Let me come back in the queue then. Thank you, ma'am. We'll take our next question from the line of Jay Doshi from Kotak. Please go ahead. Yeah, hi. Thanks for the opportunity. My question is generally on profitability. So, you know, in December 2020, with about 1,300 stores, you had a pre-Ind AS EBITDA of roughly INR 200 crore. That in December 2023 is INR 175 crore-INR176 crore, with 600 more stores. So could you share some thoughts or give us some color whether, you know, those 1,300 stores that were mature and, you know, prior to pandemic, their profitability or absolute EBITDA is still intact? Or because of weak SSSG over the last three years and inflationary pressure that you talked about, other than RM costs, you know, that profitability per store has deteriorated for, you know, the mature portfolio as well. These 600 stores that you may have opened in the last three years, are these stores at a overall level EBITDA break even or essentially it's you know drag on absolute EBITDA? Yeah. So, I think the, all the stores, new stores, we have a payback of about less than three years and EBITDA positive in line with, the business case. So highly positive, we don't see any deterioration from the business case when they open, right? I think so I want to assure you that each and every store we open is very closely tracked, and once it is or very-- we have an internal committee which approves the store. There's a lot of groundwork that goes in and a lot of rigor that goes in approving a store, and then Deepak and team track this like a hawk month on month in terms of sales and EBITDA delivered. So, that process works very well, I have no doubt, and it is not... I know some of the analysts does have a hangover of the past where we shut down the stores. Definitely, that ain't happening and all our stores on track. Now, your question, the larger question is, I would say a more relevant one, why has our EBITDA, which was almost 300-400 basis points higher earlier, why are we not at those levels? The answer over there is the like-for-like growth. Had the like-for-like growth been plus 300 basis points versus minus 300 basis points, you would have seen that 200-150 basis points of EBITDA naturally coming into our PNL. So that is the short answer, and that is a job to be done by the team. Understood. One more question, if I may. See, as a consumer, you know, this question was asked earlier as well. As a consumer, we sort of feel that, you know, when we talk around, you know, discuss, Domino's seems to be losing mind share and market share at that INR 400 -INR 600 price point pizzas. And because there are a lot of gourmet pizzerias who offer pizzas that are probably slightly more expensive than your premium portfolio and a notch below your gourmet portfolio. So is there any thought internally to sort of, you know, work around product portfolio, you know, and not just gourmet, but at that price point where you may be losing share, you know, both mind share and market share to gourmet pizzerias, local ones? Yeah. So I think good point. So, Jay, I think firstly, like, we've launched Viva Roma to take care of a more premium segment, and our value share is higher than the transaction share on some of the aggregators. So actually, if I see the bigger opportunities on the transaction side, there are there are local pizzerias or onesies and twosies who may be offering a better promotion or a deal on a particular day. Less on the premium side, we are constantly benchmarking our portfolio of loaded pizzas and gourmet pizzas, Viva Roma, with the relevant competition set. Similarly, on the lower end, whether it's Pizza Mania or INR 100, INR 109 Margherita, we are benchmarking against the relevant set. Both places we must win and have a dominant share, and that is what we are focusing on. It is not either/or for me here. Understood. Thank you so much. Thank you. Thank you. We have our next question from the line of Arnab Mitra from Goldman Sachs. Please go ahead. Yeah, hi, team. My first question was, you know, when we looked at the last two quarters results, it did give a sense that things are bottoming out and the LFL growth is not going worse from where it was. Now, this quarter, despite obviously Cricket World Cup, some festivity, it's actually gone more negative, even though you did give the color of dine-in versus delivery, but at an aggregate level. So my question was: Do you get a sense that things have bottomed out, they are not worsening further? Or is it that things could be worsening further and we first need to arrest that problem? And if you could help us understand if there was any change in the trends after the World Cup got over in December, January, which helps like form, you know, look at this problem more closely. No, I think it's a I can't say anything conclusively at the moment, Arnab. I think, is January better than December? Maybe marginally, but not materially. December was particularly worse compared to November, which had both the Cricket World Cup and Diwali. So it's hard to say just within first month of the quarter. Is there a material uptake where the demand is back? We absolutely know that's not the thing. I think what we are doing internally is to capture the demand, some of the questions being asked by other analysts, friends, on premiumization, having more occasions. And our biggest weapon over here is taking more share from other occasions. Therefore, it happens only with pizza is the natural answer to that. So that's how we are targeting. We're confident about the internal capabilities that we are building, that we should be, despite demand being soft. Is the worst over? I hope so. Looks like, but I can't say confidently to you. So understood, Sameer. Thanks for that. My second question was just related to this, that, in this context of this negative LFL and SSSG may be a little worse than LFL because of store splitting. Is there a case for, like, slowing down store expansion, at least in the top eight, nine cities where you probably are, the density is already quite high? Or, is that not the right way to think about it in the current environment? I think you are right. So if we see, if the store, so why do we need a split? Split is not for the sake of the splitting, it is when the mother store is not able to serve the customers. When during peak hours, they are taking shutdowns and the delivery metrics are poor or dine-in metrics are poor, that is what causes a split. Now, if the store is not growing, there's no reason to split that. So you are right, therefore, we have reduced the number of splits. And as you see, in the last quarter, we expanded to 10 cities, right? These are all 10 new cities, and therefore, white areas. So we do play this tactically, right? Given the bandwidth of the team. If these, if there's one pocket is growing and they're not able to manage the peaks, we do go for splits. Otherwise, we have a list of cities or the white spaces that we want to go to, and there are several in the top 10 cities also that we are not even covering the entire 100% of the city, so we are focused on more white cities. Lastly, you will see on the investor deck, we are utilizing the demand signals to expand delivery service area for the existing store network also. So we realize that in this little bit of a demand constrained environment, we have to work harder. So we have expanded the polygons and the coverage of existing stores also. Okay, thanks so much, Sameer. All the best. Thank you. Thank you. We have our next question from the line of Tejas Shah from Avendus Spark. Please go ahead. Hi, thanks for the opportunity. A couple of questions. First, with the 113 stores of Domino's opened in the first nine months, and you're still holding on to our guidance of 200 stores. The pace from fourth quarter is almost one store per day. So just wanted to know any reason that we have bunched up the opening for the fourth quarter? I think the two reasons I would say, or are there three reasons. Firstly, we started with a very weak quarter one, where we were kind of fine-tuning the team, changing the team. That was done in Q1, and happy to note we have a, like, a rock solid team driven by analytics, insights, automation. That's what we wanted to bring in. So we started in Q1. In Q3, there were few restrictions in construction, especially around NCR, where we had the store approvals. We had to stop the construction due to pollution measures. So therefore, the number in Q3 would have been slightly higher than 40, and that was the reason why it got delayed. So as we speak, like I said, for the first time, we are entering into the next quarter with a very large pipeline. I'm confident of reaching about 200 odd stores, overall. Very clear. Second question, there are two parts to it. So interestingly, in your recent communication, we are broadening our focus to behave like or position ourselves as the leader of the category, and the addressable market we are actually targeting as a whole, food service market and not only pizza. So is it a fair understanding that as you try to gain market share from other categories, subcategories, the dining proportion there will be higher? And second part to the question is that we also have pinpointed that dining is a growth hurdle. And there's an observation that even in our recent communication, it happens only with pizza. In a campaign of, let's say, one-minute advertisement, there is only five seconds, which we are actually showing customer enjoying pizza at our store. How do we plan to reshape aspiration if we are not seeing it ourselves? Sir, your voice was a bit breaking. I think what you're saying is, the advertising campaigns of "It happens only with pizza" are largely delivery-oriented and... Right? Is that the, the- Yes. Yes, yes. Yes. Yes. I think you will see, like, like I said, what you saw is a first two overs of a test match, right? This, "It happens only with pizza" is a full platform. The next set of ads you will see actually will be inside the store. So, so we will build this across channels. And are we in sync with that, adding more investment in the existing stores also so that dining experience can improve? Yeah, we are very much in sync. I think we want to give good experience to customers. We stand for high quality pizzas, affordable, low cost, and very functional experience, right? Whether it's inside the store or delivery. So we do want to give good experiences, and we are not... Again, I think the please don't mistake it for fine dining or casual dining. In fact, wherever we are correcting the experience inside the stores, we are adding more seating to the store, right? Because we have redesigned, we reduced the size of the kitchen, we have taken some equipment out, we have made the operations leaner, we have a better restroom experience. So, so it's functional, higher ROI, higher turns, and that's what we want to stand for. So, please don't equate dining experience improvement to fine dining or casual dining experiences. Quite clear. That's all from my side. Thanks. Thank you. Thank you. Ladies and gentlemen, we'll take the last question from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Yeah. Hi, good evening, Sameer. Thanks for the opportunity. Just two quick questions. On slide 14, when I look at you have given the cumulative Cheesy Rewards Membership, which has now moved to 21.5 million over last six, seven quarters. I was more curious because in beginning, in middle, you said that this program is going to do more success, drawing the U.S. experience. So how do you measure the success of this program when you're sitting after seven quarters? And maybe I'm more curious, what percentage of customers have already achieved the six pizzas and redeemed the seventh one? ... So, your voice was a bit muffled. I think you asked me two questions. One is, how are we measuring the success of Cheesy Rewards programs? Yes. Second is, what proportion of customers have gotten a full, like, reclaim the reward, right? The free reward. Yes. Okay. So I think the best way—I would say the simplest way to look at Cheesy Rewards Program is that online channel is like for like positive, right? That's the best, easiest correlation you can make. And the reason why I say that is, the ticket size is increasing. So again, it's hard to tease out what is the most accurate driver, but had the Cheesy Rewards Program not been there, our frequency would have reduced, right? When consumption, when everybody is reporting negative SSG, we are—our frequency is not reducing. It is stable for last two quarters. The cohort of customers ordering six pizzas and nine pizzas is increasing, and customers with almost two pies are increased by 10% quarter on quarter. So I believe this program is working for us, especially for online and delivery customers. It is a great program. We also see lesser churn rates for customers who have claimed a free pizza versus a customer who's ordered seven times but not claimed a free pizza. So it drives stickiness, and this is very consistent with learnings from Domino's USA. Now, the next question was on the proportion of customers who ordered, like, that base is growing. Unfortunately, we don't disclose that, but I measure this like a hawk in terms of how many customers have a free pizza, six pies, but not claimed the pizza, and five, five pies and four pies. So we track this on weekly basis. That base is only growing. Okay. I mean, I was more curious in the marketing success when we do TRP, GRPs, we measure what kind of customers we've been able to convert. So that's why I was more interested in that number. Anyway, I'll take it offline. On, on- Yeah, we can take it offline. Sorry, your voice is a bit muffled, Shirish. One quick one last question, if you permit. Hello? Yes, Shirish. Yeah. So, on Popeyes, now we have entered 210 cities. But if I go back about two years, we took almost to get the model right, to get the store economics right, the product menu pricing, and now we have entered into the North. So what gives you the confidence and what parameters you decide entering into the new city? And sub-question is that if you can be able to share some contours in terms of financials, what is it at this point of time? Sure. So the parameters are very simple in terms of four things. Is there a chicken eating market over there in that city? So there are a few parts of most of India, like 70% of India, is non-vegetarian and chicken. It is, the proportion is larger in South versus some of the western parts of India. So we are talking. So firstly, how big the market is. Second is our store ROI. Right, so the payback period and the discipline of finding a store, the rental negotiations, that's number two, is the location and the rentals. Number three is our ability to serve the customer, because as you know, we are the only player which offers fresh chicken, and therefore, it is more juicier, tender. We use chicken, which is never, ever antibiotics used or never, or antibiotics free forever. So, so that is, so building that supply chain is number three. And number four is ability to manage the operation, because you have to have a, a crew which, which is trained, which is, which knows how to fry, which knows how to change the oil and how to serve the customer. So these four factors we use to enter a city, the overall demand, our ability to serve, and the store economics, right? These are the tech criteria. I think it is fair to say that we will be in top 30, top 40 cities, like anywhere from 12-18 months, right? We believe in this product. The product satisfaction scores for Popeyes in India is not the highest among the top two, top three for anywhere for Popeyes in the world. So we believe in the product. We've gotten that piece right. Yeah, and as you know, that Popeyes in the U.S. is now number two player behind Chick-fil-A and ahead of KFC. So clearly, there is something, the bold Cajun flavors lend itself to Indian palate, and we have innovated fast. So I think it's a overall very happy with how the team is executing. On sharing more color, I would just request the analyst friends to be more patient on this one. We are only 25 stores. Once we get to closer to 100, I think that is where... And I want to get there quickly. Once we get that, we'll be share more, but in between, we will share more color, and we'll happy to take you to some of the Popeyes store and experience the bold Cajun flavors of Popeyes. Thank you, Sameer. I hope very soon we'll get a taste of Popeyes in Mumbai. All the best. Yes, Shirish, always. Thank you. Thank you. On behalf of Jubilant FoodWorks Limited, we conclude the conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.