Jubilant Foods, from Sushil Kedia

September 28, 2011 |

 Funny thing, did you know Domino Pizza's subsidiary in India is called Jubilant Foodworks. It's listed. It does about 1/6th the revenues and profits of the original US based Dominos. Yet the market cap of Indian Dominos is more than the US Dominos!

What does this say? Scarcity of stock? Cornered position in a few strong hands? Does the many times larger P/E of Indian Dominos than the parent imply in any way that Indians will provide greater growth to Dominos than Americans?

I would say, the story unfolds as the price does, and all logical/fundamental explanations are determined by the colour of the pit.





Speak your mind

2 Comments so far

  1. vinvestor2010 on September 28, 2011 8:34 am

    In India consumption stocks based on domestic demand are pretty much the only safe bet right now. This is because
    -Exporters are dependent on the US / EU / China trade
    -Local Infrastructure and other firms are dependent on government business which is paralyzed due to corruption issues
    -that leaves only domestic pharma and consumption stocks. also the same store growth rate for some brands is growing at double digits on a quarterly basis :-) .
    net net the stock has a solid story but is headed for bubble land.

  2. steve on September 28, 2011 11:51 pm

    knowing nothing about India I speculate on an answer. here is a thought how about a less crowded pizza market. US has Papa John’s Domino’s Pizza Hut, Godfather’s and numerous mom and pop pizza parlors in the country.

    Does India have as crowded a pizza market.

    I remember when Wal Mart introduced their first store into Mexico and Wall Street embraced the idea. When McDonalds broke into China.


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