analyst call - nov 2010

8/4/2019 Analyst Call - Nov 2010

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Jubilant FoodWorks Limited

Q2&H1FY2011Investors/AnalystsConferenceCallThursday,November04,2010at04:00pm.

UrvashiButani:Thankyou,goodevening ladiesandgentlemen.Welcome to JubilantFoodWorks conference call for investors and analysts. The call has been hosted to

discussthefinancialperformanceandshareoperatinghighlightsforthequarterended

September30,2010.IhavewithmeonthecalltodayMr.HariBhartia,CoChairmanof

JubilantFoodWorks,Mr.AjayKaul,CEOandMr.RaviS.Gupta,CFO.Wewillcommence

thecallwithcomments fromMrHariBhartiaandMr.AjayKaul followedbyMr.Ravi

Gupta.Aftertheopeningremarks,weshallopenthecallfortheQ&Asessionwherethe

managementwillbeverygladtorespondtoanyqueriesyoumayhave.Iwouldliketo

mention that certain statements that aremade on this call today may be forward

looking in nature and the results may actually differ from the forwardlooking

statementsmadeand thecompanydoesnotoffer toupdate thempublicly to reflect

changes in performance. A detailed statement in this regard is available in the

companys Q2 FY2011 release, which is available on the companys website

www.dominos.co.in under the investors' section. Iwould now like to inviteMr.Hari

BhartiatocommencebysharinghisviewsonJubilantFoodWorksperformanceforQ2&

H1FY11.Overtoyou,Sir.

HariBhartia:This isHariBhartia, Iam theCoChairmanof JubilantFoodWorks.Goodeveningandthankyouforbeingpresentwithusonthiscalltoday.This,asyouknow,hasbeenaremarkablequarterforJubilantFoodWorks.

Our strong quarterly results reflect our ability to outperform some of our previous

milestonesandcreatevalueforallourstakeholders.Ourresultsarepartofapowerful

continuing trend, which can be explained by the Companys longstanding strategic

direction in combination with prudent efforts of our management. It is really our

continuousendeavour todirectoureffortsondesigningand implementingstrategies,

which helpus accomplish goals benchmarks and surpass the benchmarkswe set for

ourselves.

Wehavebeenabletoexpandournetworkto79newcities,madeinnovativeadditions

to our product portfolio and have taken initiatives to improve our operational

efficiencies.ThesewillofcoursebeexplainedindetailbyAjayandRaviintheirremarks.

AsalwaysIwouldliketospeciallythankallourstakeholderswhohaveplacedimmense

trust and confidence in us. I would also like to take this opportunity to really

congratulateourmanagementteam ledbyAjayandhisentiregroupofseniorpeople

whohavedoneanoutstandingworkwhich isvisible inthisquartersresults..Before I

Chamber no. 1517, 15th floor, Devika Towers, 6 Nehru Place, New Delhi -110 019


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close, letmewishallofyouaveryHappyDiwali. Iwouldnow liketorequestMr.Ajay

Kaultotakethecallforward.

AjayKaul:Thank youMr.Bhartia.A very goodevening and thank you forjoiningustodaytodiscussJubilantFoodWorksoperatingandfinancialperformanceforthesecond

quarterendedSeptember30,2010.BeforeImoveanyforwardIwanttowishallofyou

averyHappyDiwali,averyprosperous andagreatyearahead. JubilantFoodWorks,

maintainingitspastrecordcontinuestodeliverarobustsetofnumbersforthisquarter

aswell.

Letmetakeafewminutestodiscussthehighlightsforthisquartersperformance.Our

total incomeforQ2FY2011stoodatRs.1633.85millionwithagrowthof67%yearon

year.

Our

Net

Profit

for

the

quarter

was

Rs.

184.35

million

up

by

137%

as

compared

to

Rs.77.65million in the secondquarterof lastyear.For the firsthalf in thisyearour

Companywitnesseda significantgrowth inTotal Income,which stoodatRs.2989.35

million.ThecorrespondingNetProfitsstoodatRs.337.15millionupby201.2%overthe

sameperiodlastyear.

Ourstrongnumbersreiterateourleadingoperatingandfinancialpositionasaleaderin

the food service industry. Our growth during the quarter can be attributed to the

additionofnewstores,increaseinsamestoresalesandnewintroductionstoDomino's

productportfolio.Duringthequarter,wecontinuedtofocusourattentiononexpanding

ournetworkintonewercitiesandtownsacrossthecountrythatenabledustoincrease

ourgeographicalgrowthcoverage.Reachisthecornerstoneofourstrategy.Thereisa

strongaffinityfortheDomino'sbrandinthecitieswherewehavenotyetentered.The

latentandthereadypotential issimplytoohardtoignore.Oureffortswillcontinueto

improve coverage at existing locationswhile at the same time spread Khusiyon Ki

Deliverynationwide.

Thefundamentalsofourbusinessandourbasicbusinessmodelhavenotchanged.Our

strongresultsreflectsuccessfulexecutionofafocusedbusinessapproachthatwehave

aggressivelypursuedsincewefoundedtheCompany.Wehaveconstantlydelightedthe

customerwithnewproductconcepts.Feedbackavailabletoussuggeststhatwehave

got

good

responses

thus

far.

This

consumer

salience

is

an

important

part

of

our

model.

Ourhealthyanddelicious innovationthewheatthincrustpizza isanabsolutehitwith

ourcustomersandthelatestadditionofPastaItalianoandMexicanwraphavereceived

astupendousresponse.Oursuccessfulattemptsfurtherencourageustostriveharder

to innovate and satisfy our existing customers aswell as entice new customers into

tryingourirresistiblerangeofMexicanandItalianofferingsandbyextensiontheentire

rangeonoffer.

Akeyfocusareaforusthisquarterhasbeenthescalingupofourstoresnetworkand

todaywehaveawellentrenchednetworkof339storespanIndiain79cities.WeatJFL


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wish to create a distinctive element of easy accessibility around Domino's. Besides

onlineorderingwehavealso initiated the conceptofmobilemarketingwherebyour

customerscanavailpersonalizedtargetcouponsatamobileplatform.This isanother

exampleofDomino'sleveraginginnovationinmarketingtodeliverfocusedresults.Both

initiativesareprogressingwell.

We believe that the food service industry has tremendous potential for growth

especially inacountry like Indiahavingadiversepopulationwithdifferent tastesand

preferences.Wearegeareduptocapitalizeonalltheopportunitiesthatthebusiness

environmentoffersusandareextremelyexcitedabout taking theDomino'sbrand to

thenextlevel.

Looking

ahead,

we

are

very

optimistic

about

the

future

of

our

company

considering

our

commitment to leverageourstrengths that leadus to thepathofsustainablegrowth

andat the same time focuson creatingan implemented strategy thatwillenableus

createwealthforourstakeholders.Thatbringsmetotheendofmyremarks. Iwould

now like tohandover toRaviGuptaourCFOwhowill takeyou throughour financial

performance.

RaviGupta:ThankyouAjayandwelcomeyouallonceagain.Ishallbrieflyprovideyouwith an overview of our Company's performance for the quarter and the halfyear

ended September 30, 2010. It is with immense pleasure that I am speaking about

anothergreatquarterwithavery strong setofnumbers. InQ2FY2011Total Income

stoodatRs.1633.85milliontranslatingto67%growthascomparedtoRs.977.54million

inQ2FY2010,suchgrowth isbroadlydrivenbyexpansionofDomino'snetworkofpan

Indiawiththe launchof18newstoresthisquarter,which includesonesubfranchised

store.

Moreoverwe also reported a healthy same store sales growth of 43.8% during this

quarter.GoingforwardwithrespecttoprofitabilityduringthisquarterourEBITDAwas

reportedatRs.297.25millioncompared toRs.152.23million in thesameperiod last

yearwhileEBITDAmarginsstoodat18.2%ascomparedto15.6%inQ2FY2010.

During

the

second

quarter

of

FY2011

we

continued

to

execute

our

business

strategy

and

made progress in a number of important areas. As we expand our network and

operationsweremaincommittedtorightsizingourcoststructureacrosseachareaand

levelofbusiness todrivecontinuedpositive financial results.Wehaveover theyears

developed an operational system, which gives us the ability to sustain a lean cost

structureand continue to invest inour growthpriorities. Iam confidentwith further

extensionofourbusinesswewill continue toalignourexpenditureprudently toour

operations.


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With respect to interest expenses during the quarter, interest expenseswitnessed a

decline inQ2FY2011andstoodatRs.0.93milliononaccountofrepaymentofallthe

term loans. InQ2 FY2011we reportedPATatRs.184.35millionas compared toRs.

77.69million inthecorrespondingperiodlastyearregistering137.3%growth,whichis

largelyattributabletoourhealthyoperatingperformance.

MovingaheadtotheH1FY2011results,TotalIncomewasRs.2989.35millionregistering

63.6% growth overRs. 1827.46million inH1 FY2010. This is primarily driven by our

expansionacross the country intoexistingaswellasnew cities coupledwithhealthy

samestoresalesgrowth.OurEBITDAforthehalfyearendedSeptember30,2010was

Rs.548.67million comparedwithRs. 275.66million in the correspondingperiod last

year.TheEBITDAmarginsstoodat18.4%ascomparedto15.1%inH1FY2010.

LastlyPATforH1FY2010wasrecordedatRs.67.15millionwitnessinggrowthof201.2%

when compared toaPATofRs.111.94million inH1FY2010.ThecorrespondingPAT

marginswereat11.3%and6.1%respectively.

Inconclusion Iwould liketoaddthatwithveryencouragingH1resultswehavemade

significantstridesinourbusinessoperations.Wehadstartedtheyearoffwithatarget

ofopening70new storesandhaving successfully launched33 stores tilldate,which

includestwosubfranchisestores.

Simply put, our business overall has been progressingwell andwe are confident of

growingatahealthyrategoingforward.BeforeIconcludemyremarks,letmewishall

ofourparticipantsaHappyandprosperousDiwaliandwiththisIwouldliketoconclude

myopeningremarksandwouldliketorequestthemoderatortoopenthecallforQ&A.

AjayandIwillbehappytoaddressqueriesatyourend.Thankyou.

Moderator: Thank you. Ladies and gentlemen,wewill now beginwith the question

andanswer session.The firstquestion is from the lineofPriteshChedda fromEmkay

Global.Pleasegoahead.

PriteshChedda:Firstifyoucouldtellusthesamestoresalesgrowthinthequarterandthereafterbreakitupaspriceleadandvolumelead.RaviS.Gupta:Samestoreforthisquarteris43.8%.Thisquarterwedidnotincreaseourpricesbutperiodicallyeverysixmonthsorsoweincreasethepricesbyabout22.5%,so

onanannualbasiswecansaythegrowth isabout5% intermsofprice,sotherest is

volumeledgrowth.

PriteshChedda:Inthisquarter45%ispriceledonaccountofthepricehikestakeninthepreviousquarter.


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RaviS.Gupta:No,Pritesh,whathappensisthepriceincreaseisdoneeverysixmonthand so. In thisquarter there is no specific price increase butwhenwe compare it

betweentheQ2 FY2010 to Q2 FY2011 therearetwopriceincreasesof22.5%each,so

inanutshellbothpriceincreasestogetherwillgiveyouabout5%priceincreasein the

samestoresalesnumbers.

Pritesh Chedda: Considering the first half same store sales growth being extremelyrobust and deviation from the past trend of about 16% andjust your take on the

marketcondition, is itnowpossible that thesamestoresalesgrowthofsimilar level

willalsobetherein H2 FY2011?

AjayKaul:Seewewon'tbeabletoreflectonhowthesamestoregrowth isgoingtoevolve

in

future.

If

we

for

a

moment

look

at

how

has

the

first

half

gone,

I

think

based

on some goodadvertising campaign some goodproduct launches likePasta Italiano

MexicanWrap,whichwe had launched inQ2 and also things like Chocolava Cake

comingoutof lastyear,whichcontinuedtodoverywell, theway theconsumerhas

responded to these products andpromotional features and added to thatwhatwe

havebeen trying to innovate with themobilemedium,wehavebeenoffering lotof

promotionalofferstoourcustomers,on the operationsfrontwecontinuetoberankedas

thebestoperationsrun intheworldamongstalltheDomino'scountries,wearealso

oneofthebestemployers,soifweputallofthemtogetherandthefactthatwehave

overtheyearsbeenkindofreinforcingatthestorelevel,allourphilosophyofserving

customersand soonwebelieve that theconsumers sentiment isgoing to continue

andtheyaregoingtostronglysupportDomino'sinfuturealso..

PriteshChedda:Havingtheexperienceforthelastfiveyearsandspecificallyforthelastthreequarters,haspizzamarketgrowthdeviated from thehistoricnumbers thatyou

have,doyouthinkat this stage ithasdeviatedontheupsidebasedonthenumbersthat

youhave?

Ajay Kaul: As far as our numbers are concerned, clearly the last three quarters arebetterthanwhatwehavedoneoverthelastsixyears.Toputthingsinperspective,our

CAGRsystemlevelgrowthinthelastfiveyears,whichistill2010wasaround44%andin

this

year

so

far

our

system

level

growth

is

around

67%.

If

I

talk

of

same

store

growth

averageoffiveyearshasbeenaround18%,thisyearsofarit isataround40%.Ithink

speciallycomingoutofyearbeforelastwheretherewasabitofadip,whichthewhole

marketplacehadtaken,becauseofglobalfactors Ithinkclearlythemarket is looking

upbeatandtheconsumersarecomingoutofabitof,callitrecessionaryspaceifImay

say that, and they are showing that much more response to an impulse purchase

productlikeDomino'spizza.

PriteshChedda:Soisitfairtothenconcludethatattherecouldbeadeviationfromthehistorictrend.


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AjayKaul:Wedefinitelybelievethatthere isupbeatnessattheconsumer level inthemarket.

Pritesh Chedda: We have introduced two franchisees now. We have an extremelyrobustcashflow.Whatistherationalebehindsubfranchiseeandwhydon'tweutilize

ourcashonlyforfasterrampup?

AjayKaul:Asapartofourthinkingwhichhasbeenconsistentoverthelast15yearswebelieve thatwe should run thesestoresourselvesbecause then thewholeoperation,

thewholetrainingmachinery,thequalityoftheproduct,thesanitationhygieneallthat

iswithinourcontrolandgivenourcountryIthinktheseareofparamountimportance,

weattach lotof importancetothis,beingacornerstoneforoursuccess in India.Now

these

two

particular

stores

which

are

franchisees

are

more

out

of

design

than

choice

because foranybodytooperateatairports,thesearetwoairportstores,one inDelhi

andone inMumbaiyouhave tonecessarilygo throughwhatwecalla foodoperator

andtheway itoperates in Indiaaswellasworldwide isthatyouhavetobecomeour

franchiseeof thatparticular foodoperator. So letmeanswer this in short, ifgivena

choicewewouldhaveopened this storealsoonourown,butstructurallyhow these

contractsaredoneweareforcedtobeafranchiseeofafoodoperator.

PriteshChedda:Howare these contracts structuredandwhatwouldbe the revenuebooking?

RaviS.Gupta:Therearetwokindsofrevenuebookingthathappensforthis,oneiswechargea franchise fee to franchisedstoresandsecondkindofrevenuebooking iswe

sellfoodtothem,alltheingredientsaresuppliedbyustothesetwofranchisedstores,

sowehaverevenuefromthesaleoftheingredients.

PriteshChedda:Okayandisthefeeincomeasapercentageofrevenues?AjayKaul:Yeahitisapercentageofrevenues.PriteshChedda:Whatisthepercentage?RaviS.Gupta:Wewillnotbeabletosharetheexactnumberwithyou.PriteshChedda:EachnewSKUthatyouhavelaunchedChocolava,MexicanWrap,PastaItaliano,ifonathreetofouryearperspectivewhatcouldbetherevenuesizethatthese

SKUscanbecome,soitiseasierforustoextrapolateforincrementalSKUsizes.

AjayKaul:Itishardtopredict,butwecansaythreetofourthings Onebylaunchofthese products we have been able to make our menu more holistic from the

customersperspective.Becausewhenwedidourresearchthecustomerwouldsaywe

loveyou,butgivemealsoacoupleofmoresideoptionsandalsoadessert,whichwas


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previouslymissingfromourmenu.Sosince Iwouldsay lastyear, inAugustwhenwe

launchedpastaforthefirsttime,thenwedidChocoLavainDecemberandthisyearwe

launchedtheWrap,webelievenowtheseareproducts,whichhavebecomeapartof

ourmenumix.Nowgoingforwardweareattheendofthedayapizzacompany,soour

focusonpizzawillneverchange.Youwillseelotofourinnovationactuallyhappening

around pizza rather than the side orders but the side order and the dessert will

continue finding their place. So arewe expecting these dessert and side orders to

becomeso large that thepizzapercentagewillgodown, Idonot think so.Theywill

coexistandtheywillallformapartofthestomachshareoftheconsumer.

PriteshChedda:AnyballparkfigureorideaonthesizeofeachSKUthatitcanbecomeoverthenextfiveyearsmaybenotasapercentageofrevenuebutabsolutesize,aRs

.30

crore

palette

or

a

Rs.

50

crore

palette.

AjayKaul:Withoutgivinganumbertoit,theyarefairlysizableandinpercentagetermspizzawillalwaystendtobethemotherofallofthem.

PriteshChedda:Lasttwoquestionstheadandpromotionexpensesasapercentageofthesaleswhat it isandwhat itshouldbeandwhat istheemployee inflationthatwe

arefacingatthisstage?

AjayKaul:Wecan'tactuallysharewithyouwhatouradvertisingspendasapercentageis,butitisconsistentlygrowingyearafteryearandwebelievethatwhilewehavebeen

doingsomecutthroughadvertising,whichhasreachedthefarendandcornersofthe

countryandwhichhasreverberatedbythe factthatwhenweenter lotofnewcities

like this year so farwehave gone into10new citiesand if thepentupdemandby

virtueoftheproductalreadyhavingreachedthereatleastatthemindlevelandthen

gettingexecutedwhenwephysicallyenterthecitydemonstratesthatadvertisinghas

already reached there.Butwe stillbelieve thatwehave to growour advertising to

continuously communicate with our customers so that is going to grow, without

sharing the numberswith you. The second questionwaswith respect to employee

inflation.AsyouareprobablyawarewearetheninthbestemployerinIndiabyHewitt

EmployerSurvey;asagreatplacetoworkwearealsoamongstthetop25inIndia.We

believe

in

constantly

getting

back

to

our

employees

because

we

have

more

than

10,500

of our own employees todaywho are the happiness ambassadors aswe call them.

Recently inSeptemberwehavedoneasalary increaseofourteammembers,people

whoworkinthestoresandwecanproudlytodaysaythatweare leadingthepack in

termsofsalariesatthatlevel,thisobviouslybringsinthatmuchmoremotivationand

soonforthemtofurthersatisfycustomers.Similarlywealsoincreasedsalariesofour

associateandstoremanagersinthestoreinSeptemberthatisagaingoingtogoalong

wayinmotivatingthemtosatisfyourcustomers.Soweareverymuchinlineinterms

ofgivingincrementsmuchmorethanwhattheinflationistoouremployees.


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PriteshChedda:Ontheadandpromotionexpense,hasthatdirectionasapercentageofsalesimprovedoverthelast23yearsatleastifyoucouldgiveonthedirectionside?

RaviS.Gupta:Wecansaythat it is improvedmarginallyandconsistently ithasbeenimprovingyearbyyear.Moderator:ThenextquestionisfromthelineofNaveenKulkarnifromMFGlobalSifySecuritiesPvt.Ltd.Pleasegoahead.

NaveenKulkarni: Iwould liketounderstandthe44%samestoregrowthrateforthisquarter,couldyoutelluswhatisthegrowthrateformaturestores,whicharethreeor

morethanthreeyearsold?

RaviS.Gupta:Actuallythereisnosignificantdifferencebetweenstores,whicharelessthan three years and storeswhich are older than three years. They aremarginally

different.Thereasonwhytheyaremarginallydifferentisthatbiggerstores,needtobe

split periodically, whenever stores grow to a certain size and above, to serve the

consumersbetter,weopen another store also in the vicinitybecause the customer

servicestartssufferingatthefringes.

NaveenKulkarni:Soalso if Iwere to lookat thesequarternumbers thequarteronquartergrowthrateisintherangeofaround20.5%,whichprobablywouldbequitea

highnumber,so isthereanykindofseasonalitythatyouseeoverthefourquarters I

wouldprobablyimagineQ3wouldbethestrongestquarter.Isthatarightassessment

tomake?

AjayKaul: Ifyou lookat lastyear, I thinkyouprobablywillhaveaccess to lastyearnumbers,whathappensisastheyearprogressesournewstoreskeepaddingalongso

theyprobablycoloralittlebit,theconceptofseasonality.Ifweweretheoreticallynot

adding any stores during the year then youwould probably get a true indicator of

seasonality.Buthavingsaidthatyouareright,Decemberasanexceptionandmaybe

to some extent halfof January aremonthswhere seasonality is demonstrated very

well,consumersareinaveryjoyousandapompousmood,corporatesactuallyatthe

timeof theyeararealso inagoodmood to reward theiremployeesandholdpizza

parties.SoasaresultDecembertendstobeabigmonth,Januaryhalfofifalsotendsto

be a goodmonth.Other than that I think there is a steady business,which comes

almostthroughouttheyearbutthereareoccasions forexamplewhenthere isDurga

PujainKolkatathesalewillpickupwhenthereisaGaneshChathurthiinBombaythe

saledoespickup,duringtheDurgaPujaDusshera,etc. So there are pockets where on a

few days sales are high or low,butbyandlargeseasonalityisnotthere,itismissing.

NaveenKulkarni:Okayandalso in termsofgrowthratecoming frommetro'sversusnonmetrocitiesaretheydifferentorhowdowelookatthosenumbers?


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9

Ravi S. Gupta: They are not significantly different actually. All cities practically aregrowingbyagoodsetofnumbersandthereisnomajordifferenceinmetroversusnon

metro.

Moderator: The next question is from the line ofManish Jain from Axis Holdings.

Pleasegoahead.

ManishJain: IhaveaquestiononwhatisthesustainableEBITDAmargingoingaheadoverthenext12yearsandsamefortaxrateandlastoneiswhatistheaverageticket

sizerightnowversuslastyear?

AjayKaul:Okayletusstartinthereversedirection.Ticketsizeissomethingwhichwewillnotbeabletosharewithyou.AsfarasEBITDAmarginsareconcernedforthefirst

twoquarters it isaround18.3%,which isasignificant2.6to2.7% improvementover

last year.Webelieve that given the first twoquarters,wherewehavemanaged to

growoursalesbyaveryhandsome67%atthesystemic levelandaround40%atthe

samestore level.Wehavebeenable togrow thesemarginsandouroutlook forthe

futureisthatwithcustomerresponsecominginthewayithasbeeninthepastwewill

beabletodeliverhopefullygoodresults.

ManishJain: Youexpectthemtosustainandimprovefurther.AjayKaul: Itisdifficulttocommentatthisjunctureandtolookatthefuture.Wewillobviouslystrivetoimprove.

ManishJain: Thanksandlastonewasisonthetaxrate.RaviS.Gupta:Tax rate for thisyearwillbearound20%; this is inview thatwehadcarryforwardtax lossesaswellasbook lossesandfromthenextyear.Wewillcome

backtoyoubytheendofthisyearonwhatwillbethetaxrate,butasofnowitseems

liketobeafulltaxrate.

Moderator:Thenextquestion is from the lineofHirenDasani fromGoldmanSachs

AssetManagement.Pleasegoahead.

HirenDasani:OnthesamestoresalesgrowthifIlookatthecommentaryasperthelastearningscall,theactualnumbershaveclearlysurpassedmuchmoreontheupside.SoI

am just wondering that within a threemonth span how can we be so materially

differentfromwhatwewereexpectingaboutthreemonthsago.

AjayKaul: Ifyou lookatourfiveyearsamestoregrowthonaveragebasis it isaround18%andifyoulookatour lasttwoquartersinparticularthishasjumpedtoashighas

44%,so theseareunprecedentednumbers.Soat theendofthepreviousquarteralso

when we had discussion we knew that there was upbeatness in the market. The


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10

consumer is respondingverywell,44%youknowhasclearlybeatenourexpectations

alsoandweareveryhappytoreportthesenumbers.

HirenDasani: Again for the full year you are still saying that the same store salesgrowthwillbeintherangeof1820%only?

AjayKaul:Wewillnotbeabletocommentaboutthefuture.Howeverwhatwewillsayisthattheconsumerseemstobereactingverywelltothevariousstimulithatwethrow

in themarketbywayofourpromotions,bywayofproducts,bywayof the various

schemes thatwehavewhether it isamobilecouponor through the Internet,online

ordering.Amixofallthese,asafunctionseemedtohaverespondedprettywellsofar

duringthecourseofthisyear.Thatisallwecansay.

HirenDasani: Okay,Imeanbasicallyyouhavestoppedgivinganyguidanceasfarasthesamestoregrowthisconcerned?

AjayKaul:Probably.HirenDasani:Whataboutstoreopeningsforthecurrentyear?AjayKaul:Tillfirsthalfthisyear,wehaveopened33storesandweareupbeataboutourfullyearguidancewhichwehadgiven thatwewillopen70storesbytheendof

March2011.Andweareontrackforthatandwewilldefinitelyopenaround70stores

byMarch2011.

HirenDasani: Sureandmaybeoneshouldexpectsimilarnumbersforthenextyearaswell.

AjayKaul:Asandwhenwedecideourbudgetsandourtargetsandobjectivesfornextyearwewillbeveryhappytosharethemwithyou.

HirenDasani: CanyoutellmewhatwastheCapexforthequarteraswellasforthehalfyear?

RaviS.Gupta:CapexforthishalfyearisaboutRs.28crore.HirenDasani: Largelyonthestoresonly?RaviS.Gupta:That is largelyattributabletostores.Asignificantportionofthisrelatesto the stores opening because of 31 company owned stores thatwe have opened.

Although we require some balancing equipment for the commissary that happens

periodically,wealsoneedtoaddonequipmentswithinexistingstoresalsobutthat is

smallerportion.


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11

HirenDasani: Sure,ifIlookattheemployeenumberjustdividingsimplythenumberofemployeesbythenumberofstores,itlookslikethenumberofemployeeshasgoneup

quiteabitduringthisquarter,anyexplanation?

AjayKaul:Yes,itisverysimple.Whenyoulookatthesamestorebasis,wehavegrownataround44%atasamestorelevelyouneedtobeefupthesamestoreemployeebase

byatleast1520%,soifyoulookatourexistingsamestoreemployeebaseforgettinga

44%samestoregrowthyou require thosemanymoremotorcycles,thosemanymore

peoplewhocangoanddeliverpizzas,sothatisonepartoftheemployeesbasegrowth.

Theother isthateverystorenormallyrequiresaround25oddpeopleandthe33odd

storesthatwehaveopenedthisyearsofar,wehavehadsomefantasticperformance

by these storesand theyhaveopenedmuchhigher sales than the stores in thepast

have

and

as

a

result

they

have

required

not

20

25

but

maybe

30

people

on

an

average.

So ifyouaddallof them together so there isa fairlyhigh increase in thenumberof

employees.Buttrustmeifyoulookathowtheyhavegrownagainsttheactualgrowth

thatwehavehadtheyareallcontributingtothetremendousgrowthandsuccessthat

wehavehad.

HirenDasani: Definitely that isprettymuchevident from thenumbersand lastlyanyupdatesonanypotentialjointventures,franchiseeagreementsbeyondDominos.

AjayKaul:Notyet,aswehad said last timealso thatdiscussionsareon,and Imustadmitthatdiscussionsarestillon.Thesearethingswhichdonothappenovernightand

obviouslyapart from the commercialand the strategic sensewhich thebrand should

maketoeachother,thephilosophyandculturealsooftheorganizationshouldmeet,so

itisgoingthroughduediligencefromallsides,frombothsidesandasandwhenthere

willbeanythingmaterialtoreportandobviouslyweareboundbynondisclosureclauses

sowecannotevengiveyouahint,soasandwhensomethingmaterialhappenswewill

bemorethanhappyandgladtocomebacktoyou.

Moderator: Thank you. The next question is from the line of Manav Vijay from

Edelweiss.Pleasegoahead.

ManavVijay:

Good

evening

gentlemen.

Could

you

please

tell

us

what

was

the

sale

from

the twonew products thatwehad launchedduring thequarter,MexicanWrap and

Pasta?

AjayKaul: Itwillbedifficultforustosingleoutwhatexactlywasthesalecontributionbut Imust tellyou thatqualitatively theyhavedoneexceedinglywell.Whatwehave

realizedisthattheshareofthestomachasfarasDomino'sPizzaisconcernedhasonly

grownup.Apartfrompizzas,theconsumershavealsogivenusashareofthestomach

as far as side orders are concerned. So bothMexicanWrap and Pasta Italiano have

foundtheirplaceinthemindsofthecustomeraswellashisorherstomach.


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12

ManavVijay: SirthebasicreasonwhyactuallyIwasaskingforthatnumberisbecause43.8%samestoresalesgrowth,Iunderstandthatsomepartofithasactuallycomefrom

the introductionofnewproducts.Soasandwhen letussay theCompany introduces

newproducts inthefuturewewillhaveabasesamestoresalesgrowthforourbread

andbutterbusinessofpizzaandsowewillbe inabetterpositiontoputanumberfor

newproductsaswell,soifyoucansharethat,itwouldbereallyhelpful?

AjayKaul:Idefinitelywillnotbeabletosharethosenumberswithyou.ManavVijay: Okaygreat,howmanynewcitiesweaddedinthisquarter.RaviS.Gupta:Inthisyearsofarwehaveadded10citiesand5 cities in this quarter.ManavVijay:Fiveinthisquarterandfiveinlastquarter.RaviS.Gupta:Yesthatsright.ManavVijay: We have done close to 40% kind of same store sales growth. Nowconsideringthefactthatthethirdquarterincludesapartfromlotsoffestiveseasonand

periodsanddays,woulditbepossibletoactuallybeatthisnumberinQ3.Wouldyoube

inapositiontocommentanything?

AjayKaul:WewillnotbeabletocommentonhowQ3willunfold,allwecansayisthatgoingby the last twoquarterswhere theconsumerhas respondedverynicely to the

variousstimulithatwehavethrownatthemintermsofnewproductsaswellasexisting

products,ourvariouspromotions,andallotherthingsthatwehavedone for them in

terms of operation, customer services, that is really encouraging for us that the

customerisrespondingtothestimuliandtheyarereallyfindingthevaluepropositionof

Domino'smeetingtheirstandardsandrequirements.

Moderator:Thankyou.Thenextquestion is from the lineofMadhuchandaDey from

Kotak.Pleasegoahead.

MadhuchandaDey:Myquestionpertainstothesamestoresalesgrowth,whichiskindofdeviated fromyourerstwhile trajectorygiven that thishashappened forwhatever

measuresthatyouhavetaken,theremustbeakindof physicalcapacityutilizationalso

ofyourstoreswhichwouldatsomepointintimegetexhausted,soIjustwantedsome

senseonthatastowhatkindofgrowthcanbesustainedwithoutcreatinganewstore

in the vicinity or adding physical storesjust by addingmanpower as you have been

doinginthelasttwoquarters?

AjayKaul:Evenaswespeak,wehaveletussaya44%samestoregrowthinaquarter,ifIweretopickupalloursamestores,youknowthereisafairlysizable200plusstores

sitting they are spread inacontinuum,therearethesereallyhighvolumestores,tothe


13/21

13

mediumsizedstoresandtothesmallerstoresandallofthemaregrowingaswesaid

earlieratanequallystupendousrate,44%beingtheaverage. Soas farascapacity is

concerned that isalreadygetting testedas faras the largestoresareconcerned.And

clearlythe largestoresaredoingwellandtherearenosuchbigvisibleconstraintsfor

us;howeverhavingsaidthatweonourownrealizedthatasastorestartsbecomingbig

intermsofvolumehandledwhenyou lookatthecustomerservice indicators interms

ofhowfastwereachtothecustomersdoorstepwehaveacommitmentofreachingin

30minutesor less,but the internalnorm is far lower than that sohowoftenarewe

delivering late inthosekindofstoresorattheperipheryofthedeliveryareaofthose

storesourcustomerservicesmaystartfallingordroppingandwhichsometimeshasa

clearbearingontherepeatpurchaseorderofpeople,sogivenallthatisthetimewhen

they realize that someof thesebig storesneed tobe split. So it isnot asmuch the

capacity,

the

capacities

do

not

come

up

as

a

constraint,

it

is

our

own

indicators

in

terms

ofcustomerservice,customerexperienceandtherebyrepeatpurchase,whichdriveus

tosplitstoresandcreatenewstoresoutofthem.

MadhuchandaDey:Sohowmanyofyourstoresareabouttoreachthatstage,Imean,ifyoucouldjustgiveusasenseofthat?

AjayKaul: It is a smallminisculenumber aswe speak rightnow, sinceourbasehasbecome fairly large,wehavenow339stores, thisnumber is fairlysmallcompared to

thewholebase.

MadhuchandaDey:Butthatnumberwouldcontributetowhatpercentageofyourtotalsales?

AjayKaul:Iwon'tabletoreflectonthat,butwhatthesenumbersdo,Iwouldsaytheydoforexample,the44%samestoregrowthincludesthesplitstores,whichmeansifyou

were to takeaway thesplitstoresoutand lookat the restof theuniverse, thesame

storegrowth isprobablyevenhigherthanthisnumber.Sothis44% includesthesales

shareofthesesplitstoresalso.

MadhuchandaDey:Iamjusthypotheticallyaskingyouthisquestion,shouldyourFY'11same

store

sale

growth

turn

out

to

be

similar

to

H1,

would

you

have

to

rework

on

your

capacityadditionplans?

AjayKaul: Justcannot comment, it isahypotheticalquestion,wewillnotbeable toanswerthisquestionatall.

MadhuchandaDey:Butinyourassessmentifthistrajectoryofsamestoresalegrowthcontinues,youhavetocontinueaddingemployeeintherateyouhavebeendoinginthe

lasttwoquarters?


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14

AjayKaul: In fact ifoursamestoregrowth is44%,ouremployeegrowth in thesamestoreincreasesatafarlowerbaseandtherebyyouareabletoleverageandimprove on

our marginssotheoreticallyifoursamestoregrowthweretocontinueatthesamepace

our employee growthwill only be a subset of them, itwill be far lesser than that

number.

MadhuchandaDey:Attheendoftheday,youwillbeabletoimproveuponthis18.5%kindofamargin?

Ajay Kaul: That is something which we will not talk about right now because it isdependent on several other factors. Lot of things can be leveraged to look at your

margins or have a bearing on your margins. This is one of the levers which cancontribute

to

that

EBITDA

margin.

MadhuchandaDey: Somyunderstanding iswhat you suggested is you stillhave theleverwith youof addingproportionateamountof employee andmaintain the same

storesalegrowthtrajectory,right.

RaviS.Gupta:No, I thinkwe need to rephrase that completely, if the sales growthrequires thenwe can add employees; employee addition cannot bring a same store

growth.Wecanaddemployeesthatwillbetherightphrasingactually.

AjayKaul:OnethingwhichwehavedoneandIwanttosayhereisthatinthemonthofSeptemberwe tooka salary increase forall thekey setofemployeesworking in the

store for us. To startwith the teammemberswe increased their salary significantly

becausewe realized thatwehad toattract lotof thistalentandalloverthecountry.

Similarlyat themanager levelwithin the storeagainwe increased their salaries.The

ideawastoimproveretentionratesthereandmakesurethatalltheseemployeesare

readyforthebigmonthslikeDecemberandanyothersuchgrowththatmayhappenin

thefuture.

MadhuchandaDey:YouhavealreadycreatedthebufferinyoursysteminQ2.AjayKaul: Iwouldnotcall itabufferbutwehavedoneourpreparations for thebigmonthslikeDecemberandwearehavingarecruitmentstrategyaccordingly.

Moderator: The next question is from the line of Jaibir Sethi from CLSA. Please goahead.

JaibirSethi:Ijustwantedtogetasenseofthemovementseeninyourworkingcapital,particularly the liability figure seems to have goneup a lot aswell as the loans and

advancesfigure,couldyougiveussomecoloronwhatisgoingonthere?


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15

RaviS.Gupta:Loansandadvancesbasically reflect the securitydepositwhichwegivefor thenew siteandwheneverwe relocateasite.Soall thosesecuritydeposits form

partoftheloansandadvancessothatisthereasonyouwillthatthiskeepsonmoving.

SoinSeptember2009,thisnumberwasaboutRs.27crore,byMarchitwasRs.36crore

andnowRs.48crore.Intermsofliability,liabilitypertainstoallkindofexpenseswhich

alsoperiodicallykeepongoingup.Althoughwearenotdelayinganybodyspayment,

sincewebuyoncreditandselloncash,asmorethesalesaccrued,the liabilitygrows

andthat ishowwegeta leverage inourworkingcapitalcontinuously. Inpastalsowe

haveindicatedthatwewillcontinueto leverageourworkingcapital,this isoneofthe

strengthsofourmodelthatwebuyoncreditandsellonthecash.

JaibirSethi:Wewillseethisnegativeworkingcapitalnumberkeepexpanding.onthestore

basis

as

the

number

grows?

RaviS.Gupta:As thenumberofstoreskeepsongrowing thiswillkeeponexpanding.Althoughitwillmoveslightlyhereandtherebetweenquartertoquarterorsomething

butoveralltrendwillbepositive.

Moderator:Thenextquestion isfromthe lineofAmnishAgarwalfromMotilalOswal.Pleasegoahead.

Amnish Agarwal: My first question is regarding the employee cost, where you areindicatingthatyouhaveraisedthesalariesofthekeypeople invariousstores.Socan

weassumethatthesekeypeoplearetheusualdeliveryboysandallthose involved in

thestoreoronlyafewselectsetofpeople.

AjayKaul:Nothis iseverybody insidethestore;wehavedonetwodifferenttypesofsalaryincreases.Onefortheteammembers,whichincludeseverybodywhoisinvolved

inoperationsother than the supervisorswhichmeans the frontendpeople,delivery

boys,peoplewhomakepizza,whotakeordersandeverythingandthisisafairlysizable

numberofpeoplethisis likearound70008000employees.Thenwehavealsodonea

salary increase for our associate assistant managers, store managers and store

managers sowe have also done some sort of a correction there, so there are two

different

sets

of

people

but

all

pertaining

to

the

store.

AmnishAgarwal:Canyouquantifythathowmuchcouldbethequantumofincrease?AjayKaul: Iamafraidwewillnotbeabletotellyouthequantumof increase,butwecansafelysaythatweareattheteammemberleveloneofthebestpayingcompanyin

linewithourphilosophythatwewanttobecomeoneofthebestemployers.Weasitis

aretheninthbestemployerbyHewittSurvey;weareoneofthegreatplacestoworkas

pertheGreatPlaceToWorkSurvey,sokeepinginlinewiththatwehavetakensomeof

thesesteps.


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16

AmnishAgarwal:Mysecondquestionregardingthesameis,canyousharewithusthenumberofemployeeswehaveparticularlyatthestorelevel?

AjayKaul:Atthestorelevel,Ireckonwewillbehavingaround9800employees.AmnishAgarwal:Mysecondquestion isregardingthesamestoresalesgrowthwhichhas been accelerating from past 34 quarters. And we actually were operating in

quarterswherethebasewasvery low, forexample, lastyearfirstandsecondquarter

wewereroughlyatsay1314%kindoflevel,whichhasincreasedsignificantlyduringthe

thirdandfourthquarterandsubsequentlythefirstquarterofthisyear,sonowwiththe

same store sales growth at 43%during thisquarter, as earlier themanagementwas

sayingthatsomethinglikeyourmidteensorhighteenskindofagrowthwouldbethe

one

they

would

be

comfortable

with

but

looking

at

the

situation

now

do

you

think

that

despitehighbaseeffectthethirdandfourthquartercangiveussomemoresurprise?

AjayKaul:Wewillnotbeabletoreflectonthe futurequartersbuthavingsaidthat Imust admit that 44% same store growth, 40% for the first half of the year are

unprecedented,theyareverygoodnumbers,evenbyourownstandards.Ifyoulookat

ouraveragesamestoregrowthforfiveyearsbeforethisitwasaround18%.Ithinkthe

first half performance is reflective of the response of the consumers to the various

stimuli thatwe provide them in terms of the products, promotions, advertising, our

customerservice,ourtrainingwhichreflectsinthewaywehandlecustomersandsoon

andweareverypleasedthatthecustomersarerespondingverywelltoallthestimuli

thatwearethrowing.

Amnish Agarwal:My final question is regarding our entry in Bihar,wherewe havelaunchedastore inPatnarecently,sowhat isyourexpectationandhowhasbeenthe

initialresponsetothestoreinPatnaandhowdoyouthinkyourexpansionstrategywill

now be particularly in Eastern India, where we have been relatively weaker in

comparisontootherpartsofthecountry?

AjayKaul:Patnaasacitywithpotentialwasalwaysknown tous Ourentry toPatnawasdelayed for someother reasons;however,Patnahas respondedverywell in the

first

20

odd

days.

It

is

only

20,

25

days

old,

the

consumers

have

responded

very

well,

it

is

veryvisiblethatspeciallyamongtheyouth,theyoungexecutivesandIwouldsayeven

the children and so on. The pentup demand by virtue of having seen Domino's

advertisements,knowingwhatDomino'swasalwaysthere,thereisalsothataspiration,

whichweoftentalkabout.Soallthosefactorshave ledtoaverygoodPatnaopening

andIcannotshareanynumberswithyoubecauseithasopenednotinQ2butinQ3.So

technicallyitbelongstothisquarterandnotthequarterwearetalkingaboutrightnow.

TalkingaboutEasternIndia,Patnadefinitely,kindofmakesusupbeataboutBiharbutas

farasEastern India isconcernedoverthe lastoneyear,oneandahalfyearswehave

consistentlygone intoEasternIndiainvariousdirectionsweareinGangtok,wearein


17/21


18/21

18

vendor requests for by leveraging our volume. That is the reason youwill see that

consistentlyourrawmaterialcostisundercheckandwebelievethatconsideringthat

ourvolumeswillcontinue togrow in futurewewillbeable tokeep the rawmaterial

costundercheckinthefutureaswell.

AmritaBasu:MyotherquestionaboutSriLankaoperation?RaviS.Gupta:AsfarasSriLankaoperationisconcerneda100%subsidiarycompanyhasbeenformed.Wewillbeopeningabout2 3storesthisfinancialyearitself.Theteamis

gettingsetupandwewillbeworkingonsettingupthecommissaryandstores.

AmritaBasu:Thesewillbeownedstores?RaviS.Gupta:Thesewillbeownedstores,throughthesubsidiary.Sothestoresalsowillbeownedbythesubsidiary,wearenotfranchisingorsubfranchisinginSriLanka.

Moderator: ThenextquestionisfromthelineofAakashManghanifromGirikCapital.Pleasegoahead.

AakashManghani: Iwanted to knowwhat is theCapexper storeand secondly yourguidanceonthenumbersofstoresyouplantoaddin34yearsalsothirdlyIwouldlike

to knowwhat is thebreakeven time foraparticular storeandwhendoes the store

achievethelevelthataregularstorehas?

RaviS.Gupta:Thenumberof storeswehaveopened,60 stores, twoyearsback, lastyearweopened65storesandthisyearweplantoopenabout70stores.Wehavenot

workedoutourplansforopeningfornextyearandprobablywillcomebacktoyoufor

thatmaybeearlynextyear. In termsofCapexperstore, it isaboutRs.7millionper

storeandasforbreakevenisconcernedmostofourstoreshaveabreakevenonday

one,theystartgeneratingpositivecashfromthedayoneoftheoperations,exceptfor

thepreoperatingexpenseswecharge,ifwe leaveoutthat,fromthecleanoperations

theyareprofitablefromdayone,soyoucansaythebreakevenisondayone.

AakashManghani:Whendoesthatachievethesametypeofsalesthataregularstorewouldhave?

RaviS.Gupta:Typicallyittakestimetogrowthesalessodifferentstorestakedifferentamountoftime,typicallytheyopenbetween7580%ofthesamestoresalesbutthey

growprettyfast.

AakashManghani:CapexfigureforthisquarterwasitisRs.28croreRaviS.Gupta:Yes,Rs.28croreforthishalfyear.


19/21

19

AakashManghani:Andthatwillbeattributedmainlytotheopeningofthenewstores?RaviS.Gupta:Yes,itmainlypertainstoopeningofthenewstores.Moderator: Thenextquestion is from the line ofRajMohan, an Individual Investor.Pleasegoahead.

RajMohan:Mostlymyquestionshavebeenansweredbutagain trying todwellabitdeeperonthesamestorestryingtocomprehendthe longerterm implicationsofyour

strategiesonsamestores,don'tyouthinktherearesomeinternalfactors,whicharein

yourcontrollikeintroductionofnewproductsatperiodicintervals,betterbangforthe

buckkindofmarketingthatyouhaveincreasinglyresortedto,shouldn'tthosetakeyour

same store sales growth range significantly higher than what you have indicated

previouslyof1618%,Iamtalkingaboutgenerallymediumterm,overthemediumterm

theimplicationsofyourstrategyonsamestores.

AjayKaul: Ifyou lookat inthepast,ouraverageseemstohavegrownfornearly fiveyears,before thisyearconcluded itwasaround18%.Other thanoneyear,where the

downturnhappenedalittlebitithasbeenclockingaround20oddpercent,Thisyearso

farithasbeenclearlyhigherthanthatcomingoutofQ4oflastyearwherewedidin30s

and thisyearwhatwehavedone inthe firsthalfhasbeenaround40%. I think ithas

beenacumulativeresponse toourvariousstimulithatwethrowasaconsumer from

ourproductstoourhistoricalsuiteofproductstothevariouspromotionsthatweare

doingandsoonandsoforthandtheresultsareverymuchencouraging.Goingintothe

futurehowthecustomerisgoingtorespondtothestimuliit ishardtopredictbutwe

believethecustomersarefairlyupbeataboutoursuiteofproductsandservicesthatwe

areofferingthem.

RajMohan:Soyouarealsosayingthatyouhaveattributedthe improvement insamestorestoimprovedordersalesandincreaseinnumberoforderswhichobviouslywould

beassociatedwith the generalwellbeingof theeconomy you see that sustainingat

leastintheforeseeablefuture?

AjayKaul:Withoutgivinganynumbersouttheordergrowth isasexciting inthe firsthalf,astherevenuegrowth,which isreflectiveofnewcustomerscoming inaswellas

existingcustomers increasing their frequency.And that is the response to thevarious

initiativesthatwearedoingmarketingandoperational initiativesandthatresponse is

fairlyencouraging.

RajMohan:Siressentiallyyour19%20%growththatyoutrackedtothelast34yearsthat is seriouslyat riskbecause that isobviouslypositive for thecompanybut that is

seriouslyatriskofovershooting?


20/21

20

AjayKaul:Nocomments.RajMohan:Next on theprofitability though youhave refrained talking about futureprofitabilityinthecallyouhavementionedenhancingprofitabilityasyourkeyfocusin

thecomingquarters inyourpresentation.Asyouare intoyourbusyseasonDecember

quartershouldnotwebe inapositiontocapitalizeonthevolumedynamicsmix,cost

efficienciesbecausethesalary increaseshavealreadyhappened inSeptemberandthe

general robustnessof the Indian economy to sortof improveon your EBITDA in the

secondhalf?

AjayKaul:WewillnotbeabletocommentonhowourEBITDAwilltakeshapeinQ3andQ4,butthevolumesinQ3andQ4areobviouslyhigherthantheywereinthefirsttwo

quarters,

there

is

more

volume

in

these

particular

quarters

so

that

sometimes

helps

in

leveraging but having said that we have also taken as recent as first September

substantialsalaryincreaseswhicharealsogoingtoplaytheirroleintermsofaffecting

themargin.Soasasumtotalofallthishowitisgoingtomanifestitisverydifficultto

say.

RajMohan:But then sinceyouhave takenalreadyyoursalary increase inSeptemberwhichshouldhavebeenreflected,okay,sothatwillbereflectinginthenextquarteris

whatyouaresaying?

AjayKaul: Yesfullquarterinfactwillbethenextquarter.RajMohan:Iamaskingsinceyoumentionedyouwouldnotbeabletospecificallytalkabout talkswithglobalF&Bmajorsgenerallywanted toknowareweanycloser than

whenwewereatthebeginningofthisfinancialyear?AjayKaul:Mostdefinitelywehavemovedforward.Moderator:Thankyou.Thenextquestion isafollowupfromthe lineofHirenDasanifromGoldmanSachsAssetManagement.Pleasegoahead.

HirenDasani:Justontheemployeenumberperstore,asyousaidrightlythesamestoresame sales growth of 43% needs to be supported by may be 15%20% higher

employees,someofthemareoncontractbasis.Socanyoureducetheemployeebaseif

thesalesarenothappeninginthesamefashion?

Ajay Kaul: Most of these employees are actually full time on our roll employeeshowevertheirmixcanbeintermsoffulltimeandparttimers,butthatdoesnotmean

wecanreducethemjustasyouwoulddowiththecontractpeople.Thesearepeople

takenwithastrategyinmind,withaplaninmindasfulltimeemployeeswhoaregoing

tobealignedtothegrowththatweexpectandwhatwearegoingtoachievenowand

alsointhecomingmonths.


21/21

21

HirenDasani:Would itbe fair toassume that initially to takecareofthegrowth, therecruitmentswouldbeontheparttimebasisandthenmaybetheycanbeabsorbedin

thefulltimefashion?

AjayKaul:There isnothing likethatbecause in Indiaparttiming isaconceptstill it isvery,veryprimitive,itisnotlikewhatitisthereinthewesternworldorwhereversoitis

noteasytogetparttimersbutwehaveafairmixofbothparttimersandfulltimersbut

thereareallonourpayrolls,sotheyareouremployees.

RaviS.Gupta:Toadd towhatAjay issayingactually there isneveraneed to reducebecausewearegrowing,weareopening70stores.Eachofthestoresmeans25to30

peopleandwearepresent in79cities,sowheneveryouopenastore inthecitieswe

can

relocate

the

people

also

if

need

be,

so

we

need

the

same

people

all

the

time,

so

this

helpsustorelocatethesamepeopleprettyfast,sopracticallythereisneveraneedto

reducethemanpowerstrength.

HirenDasani:Sureaslongasyouareopeningmorestoresinthesamecity,okaythatisitthankyou.

Moderator:Thankyou.AswehavenofurtherquestionsIwould liketohandthefloorbacktoMr.AjayKaulforclosingcomments.PleasegoaheadSir.

AjayKaul:Ladiesandgentlemenitwasgreattalkingtoallofyou.Youhavebeenpatientlistenersandsomereallyexcitingquestionscameourway,whichweweremorethan

happy toanswer.Wehavehadanencouraginghalfyearand remainoptimisticabout

the remainderof the year.Shouldyouhaveanymorequeriesathand,pleaseget in

touchwithusandwewouldbehappytoaddressthem.OnbehalfofJubilantFoodworks

Ravi,HariandmyselfwewishyouallaveryhappyDiwaliandagreatsuccessfulyear

ahead.Thankyouverymuch.

Moderator:Thankyougentlemenofthemanagement.Ladiesandgentlemenonbehalf

ofJubilantFoodworksLimitedthatconcludesthisconferencecall.Thankyouforjoining

usandyoumaynowdisconnectyourlines.

_____________________________________________________________________Thisisatranscriptionandmaycontaintranscriptionerrors.TheCompanyorsendertakesnoresponsibilityforsucherrors,althoughanefforthasbeenmadetoensurehighlevelofaccuracy.

analyst call - nov 2010

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