Westlife Foodworld, the company operating McDonald’s restaurants in western and southern India, has reported signs of early demand recovery in its latest quarterly results, despite a sharp drop in net profit.For the three months to December 2025 (Q3 FY26), revenue rose modestly by 2.6% year-on-year to Rs 6,707 million (£ about 62 million).
However, consolidated net profit fell 85% to Rs 1.02 crore, mainly due to a one-time exceptional charge of around Rs 97 million linked to new labour code implementations.Same-store sales growth (SSSG) remained negative at -3.2%, compared with positive 2.8% a year earlier. Yet management highlighted improving underlying trends: guest counts stabilised in November, turned flat-to-positive in December, and showed mid-single-digit growth in January — the first notable uptick in several quarters.
This recovery appears driven by company-specific initiatives rather than a broader economic rebound, as informal dining demand stayed largely flat. Key efforts included a sharper focus on everyday value offers (such as the INR99 platform), enhanced in-restaurant experience, stronger digital engagement, and targeted local marketing.The McDelivery app saw monthly active users rise to 3.5 million, with cumulative downloads exceeding 50 million. Digital-led sales remained robust, while on-premise business grew 6% year-on-year.
The company added a net 8 stores (10 openings, 2 closures), reaching 458 outlets across 73 cities.Profitability held up better at the operating level: gross margins improved to 67.5% (up 262 basis points) thanks to lower input costs, restaurant operating margins reached 22.1%, and EBITDA margins expanded to 14.5% (up 71-100 basis points in various reports), supported by cost controls despite higher advertising spend.Analysts noted the results point to the early stages of a guest-count-led turnaround, with margin discipline intact.
Some maintained a positive outlook, with one brokerage recommending “Buy” and a target price of Rs 602, valuing the stock at 22 times EV/EBITDA on December 2027 estimates, expecting revenue and EBITDA to grow at 14% and 21.3% CAGR over FY26-28.Westlife Foodworld shares rose sharply — up to 13% in early trading — reflecting market optimism about the recovery signals amid ongoing competition and muted consumer spending.
