Jubilant FoodWorks Shares Slips on LPG Supply Disruption

Jubilant FoodWorks shares were down by almost 3% to ₹442.60 on Monday morning, after the company announced that it is experiencing shortages in liquefied petroleum gas (LPG) cylinder supply in certain parts of its store network.

The problem came to light following the events in the Middle East, where the area's instability has impacted the main trade routes and has led to a lack of certainty about fuel supply.

The company, which operates Domino’s Pizza and Dunkin’ outlets in India, has started taking steps to manage the situation.

It is working overtime to conserve LPG and gradually shift some outlets to electricity and piped natural gas (PNG). It is also in regular contact with oil marketing companies (OMCs) to stay updated on supply conditions and plan its response.

At 10:19 am, the Jubilant FoodWorks shares were trading at ₹437.6 on the National Stock Exchange (NSE).

What Is Driving The Supply Disruption?

The problem is linked to disruptions in the Gulf region, particularly around the Strait of Hormuz. A large portion of India’s LPG imports passes through this route.

Any disturbance in this corridor tends to affect supply across the country. India imports more than 60% of its LPG requirements, and around 85–90% of these imports move through this route.

In FY 2025, the country consumed 31.3 million tonnes of LPG; however, only 12.8 million tonnes of this were domestically produced.

Depending heavily on importing such a significant quantity of LPG can put the supply at risk, especially when geopolitical situations worsen.

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How Is The Stock Being Impacted?

Quick service restaurant (QSR) chains are one of the top few sectors which are most drastically affected because LPG is one of the major fuels used in their everyday activities.

An interruption in supply or an increase in prices can have a direct effect on the profit margins and day-to-day operations at the store level.

Jubilant FoodWorks has witnessed a drop in its stock price by over 10% in the last one month and almost 18% so far this year; however, it has rallied by slightly over 2% in the last five days. Currently, the company's market capitalisation is more than ₹30,022 crore.

Other QSR players have also experienced pressure during the month of March as supply concerns and geopolitical risks were the major factors that caused negative sentiment.

At the same time, there are signs of some relief on the supply front. Two LPG carriers carrying about 94,000 metric tonnes have safely moved towards India, while several Indian vessels remain in the region.

The government has indicated that steps are being taken to ensure steady availability of fuel across the country.

Sources:

MSN

News18