Westlife Foodworld (505533) Q2 25/26 earnings summary

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; net profit after tax was ₹2,770.94 lakh, driven by an exceptional gain.

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

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

• Launched Protein Plus Slice and Big Yummy Burgers, with strong consumer response; innovation pipeline remains robust.

• CFO Hrushit Shah stepped down for personal reasons after contributing to key structural initiatives.

Financial highlights

• Consolidated revenue for the quarter was INR 6.42 billion, up 3.8% YoY; net profit after tax was ₹2,770.94 lakh, supported by a one-time gain from a property redevelopment.

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

• Restaurant operating margin improved 60 bps YoY to 19.2%; operating EBITDA margin declined ~100 bps YoY to 11.8%.

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

• Same-store sales growth (SSSG) was -2.8% YoY.

Outlook and guidance

• Expect gradual improvement in operating environment over the next few quarters, with optimism for the December and festive season; October showed early signs of recovery.

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

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

• Margin guidance for Vision 2027 maintained; focus on operating margin improvement.

• All operations considered a single business segment focused on West and South India.