Westlife Foodworld (505533) investor relations material

Executive summary

• Q2 FY26 revenue grew 3.8% YoY to ₹6,419 million, despite a 4-6% decline in out-of-home food consumption frequency, indicating market share gains.

• On-premise sales increased 5% YoY, off-premise remained stable; digital sales contributed ~75% of revenue, up over 300 bps YoY.

• Store network expanded to 450 restaurants across 72 cities, with 8 new stores opened and 2 closed in Q2 FY26, focusing on modern formats and drive-thru services.

• Launched Protein Plus Slice in collaboration with CFTRI, which sold out in one day, and reinforced value offerings through McSavers Combo and themed campaigns.

• Net profit after tax for Q2 FY26 was ₹2,770.94 lakh, driven by an exceptional gain from a property redevelopment.

Financial highlights

• Consolidated revenue for the quarter was INR 6.42 billion (₹6,419 million), up 3.8% YoY.

• Gross margin reached an all-time high of 72.4%, up 270 bps YoY, driven by supply chain efficiency and GST rate cut benefits.

• Restaurant operating margin improved by 60 bps YoY to 19.2%.

• Cash PAT was ₹809 million (12.6% margin); adjusted for exceptional items, Cash PAT was ₹421 million (6.6% margin).

• SSSG was -2.8% YoY.

Outlook and guidance

• Management expects gradual improvement in the operating environment, with optimism for December and the festive season.

• Vision 2027 targets 580-630 restaurants by December 2027, with potential for over 1,000 in the long term.

• Ambitious target to double McDelivery sales in the next two years, potentially adding 3%-5% to system-wide same-store sales growth.

• Guidance for sustainable gross margins in the 70% range and continued focus on operating margin improvement.