India-Pakistan conflict: Indian QSR stock with Turkey operations in crossfire amid boycott calls and diplomatic strain

Jubilant FoodWorks finds itself caught in the crossfire of escalating tensions between India and Pakistan, amid growing calls for a boycott of Türkiye following the country’s implicit support for Pakistan in the ongoing conflict. The company had acquired DP Eurasia, the master franchisee of Domino’s Pizza in Turkey, Azerbaijan, and Georgia, in early 2024.

There are reports emerging that overall India’s trade relations with Turkey and Azerbaijan are expected to come under strain due to Ankara and Baku backing Islamabad and condemning India’s recent strikes on terror camps in Pakistan. Indian traders too have started boycotting Turkish products such as apples and marble.

India launched Operation Sindoor on May 7 to destroy nine terror infrastructures in Pakistan and Pakistan-occupied-Kashmir in retaliation for the Kashmir’s Pahalgam terror attack on April 22. During the conflict, Pakistan used Turkish drones in its failed attempt to target Indian military installations.

Jubilant FoodWorks is a QSR chain that holds franchise rights for global brands like Domino’s, Popeyes, and Dunkin’, in addition to its own brands, Hong’s Kitchen in India and COFFY in Turkey.

In the latest fourth quarter, consolidated revenue from operations rose 34% YoY to Rs 2,107 crore with Turkey’s Domino’s showing a modest 0.9% LFL growth.

DP Eurasia contributed 31% of the group’s system sales in Q3FY25, making its financial performance a key factor for Jubilant.Domino’s Pizza operates 746 stores in Turkey as of March 2025, with 8 new stores added in Q4FY25. Turkey accounts for over 90% of DP Eurasia’s stores. Domino’s holds the top market share in the Turkish pizza market, and COFFY being the seventh largest coffee brand aspires to be in the Top 5 brands.Jubilant is already going through a tough period in terms of demand in the last nine quarters, according to analysts. Domino’s implemented various initiatives to maintain market share, including delivery fee waivers, higher food costs on new launches, and sharper discounts to capture order growth.

However, these efforts led to a reduction in margins, as gross margins for 9MFY25 fell. Additionally, EBITDA margins were weaker due to continued investments in technology, advertising, and an operational shift from a four region to a seven-region model.

India’s exports to Turkey stood at $5.2 billion during Apr-Feb 2024-25 as against $6.65 billion in 2023-24. It accounts for only about 1.5% of India’s total exports of $437 billion.