Westlife Foodworld Ltd (WESTLIFE) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to the Westlife Foodworld Limited Q2 FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. We would like to remind you that the certain statements made by the management in today's call may be forward-looking statements. These forward-looking statements reflect management's best judgment and analysis as of today. The actual results may differ materially from current expectations based on the number of factors affecting the business. Please refer to the safe harbor disclosure in the earnings presentation. I now hand the conference over to Mr. Chintan Jaju. Thank you and over to you, sir.
Chintan Jaju (Westlife Foodworld Limited): Thank you. Good evening everyone and thank you for joining us on Westlife Foodworld earnings conference call for the second quarter ended 30th September, 2026. I am Chintan, Head IR at Westlife Foodworld. From the management team, I have with me Mr. Akshay Jatia, President and CEO; Mr. Saurabh Kalra, Managing Director; and Mr. Shardul Doshi, Chief Financial Officer. As always, we will begin today's session with Akshay sharing his perspective on company's overall strategy and outlook. This will be followed by Saurabh taking us through the key operational and financial highlights. We will then open the forum for question-and-answers session. Throughout the call, we will refer to earnings presentation and financial releases which are available on the NSE, BSE, as well as Investor section of our website. With that, I now request Akshay to commence the session. Thank you and over to you Akshay.
Akshay Jatia (Westlife Foodworld Limited): Good evening everyone and thank you for joining us.
Akshay Jatia (Westlife Foodworld Limited): South in India. And next week we'll be opening our 500th restaurant. These milestones are a reminder of how far we've come. But more importantly they reinforce our confidence in the opportunity the market presents ahead. This quarter we delivered our strongest performance in 13 quarters with double digit growth in both guest count and same-store sales. Revenue grew 16% reflecting broad-based strength across markets and channels. What is particularly encouraging is that this growth was driven by more customers choosing McDonald's more often. At the heart of this performance is a strategy that remains simple and consistent. We are focused on strengthening our value leadership, staying relevant to customers and delivering a great restaurant experience every time they visit us. Our Everyday Value platform continues to resonate strongly, helping drive guest growth and frequency. Through our Let's Family at McDonald's platform, we continue to strengthen the emotional and cultural relevance of the brand reinforcing McDonald's place in the lives of consumers across generations. The consistency of these results reinforces our belief that value, relevance, and execution remain the right levers to drive long-term growth. Importantly, we are also growing responsibly. Strong same-store sales growth translated into healthy margin expansion with operating EBITDA growing 29% year-on-year during the quarter. Our focus remains on building a business that can deliver sustainable growth while creating long-term value for all stakeholders. We continue to see significant opportunities ahead. Our restaurant expansion strategy remains disciplined, and we remain focused on building presence in the right markets through the right formats while maintaining prudent capital allocation. As we celebrate 30 years in India, our focus is firmly on the future. The momentum we saw through the quarter has continued into October, giving us confidence as we enter the festive season. Our priorities remain unchanged. Strengthen our value leadership, grow guest counts, run great restaurants, and expand profitably. With a strong brand, a growing restaurant network, and significant runway ahead, we remain excited about the next phase of growth. Thank you. And with that, let me hand it over to our Managing Director, Saurabh Kalra, to take you through the quarter in great detail.
Saurabh Kalra (Westlife Foodworld Limited): Thank you, Akshay. And good evening, everyone. Also wishes for Dussehra and the upcoming festive season. Q2 marked expected acceleration in our business performance. The revenue grew 16% year-on-year to 7.47 billion rupees, our strongest topline growth in the last 13 quarters. While same-store sales grew also grew at a double digit, 10.1%. Most encouraging, guest count grew in double digits in each month of this quarter, demonstrating the strength of consumer demand and effectiveness of our Brand Plus Value strategy. Our Let's Family at McDonald's and Everyday Value platform continued to be the key driver of consumer traffic, helping us strengthen frequency and drive higher restaurant sales. Both on-premise and off-premise channels delivered a healthy growth of 17% and 15%, respectively. These results reinforced our belief that the customers continued to respond positively to a combination of brand, value, convenience, and consistently strong restaurant experiences. Digital also continued to play an important role in our business. Digital channels contributed over 75% of sales during the quarter, increasing by around 60 basis points year-on-year. We now have more than 58 million cumulative app downloads and approximately 4.2 million monthly active users. As we have said before, we view digital not simply as a channel, but as an important enabler of convenience, frequency, and customer loyalty. The strong topline growth also translated into meaningful profit expansion. Operating EBITDA grew 29% year-on-year, with margins expanding by 130 basis points to 13.1%. This was achieved despite absorbing over 190 basis
Saurabh Kalra (Westlife Foodworld Limited): topic inflationary less pressure across commodities, utilities, and employee costs. The quarter once again demonstrated the strength of our business model. With higher sales flowing through to the profitability, through operating leverage and disciplined cost management. Restaurant operating margin remained healthy at 19.3%, while cash PAT stood at 52 526 million rupees, representing 7% of the sale. We also continued to expand our restaurant net work during the quarter, opening 11 new restaurants, taking a total footprint to 492 across 80 cities now. As we approach our 500th restaurant milestone, our expansion strategy remains disciplined and focused on long-term value creation. We continue to see significant opportunity across existing and emerging markets and remain on track for our target of 580 plus restaurants by March 2028. Overall, we are pleased with the progress we have made this quarter. Strong guest count, double-digit same-store sales growth, margin expansion, and continued network development reinforces our confidence in the business. While operating environment remains dynamic, our strategy remains unchanged. Drive guest count growth through value and relevance, obviously having with us with a strong brand, execute consistently, and deliver sustainable profitable growth. With that, thank you. Now, Akshay, Shardul, who is our CFO, and myself will be happy to take your questions. Over to you.
Moderator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. An operator will take your name and announce your turn in the question queue. Participants are requested to only use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sudarshan Deshmukh from IIFL Capital. Please go ahead.
Percy Panthaki (IIFL Capital): Yeah, hi. This is Percy Panthaki here. So, just wanted to understand this quarter what has been the YoY movement in promotional intensity as a percentage of sales, which probably gets captured either in the COGS or the sales, as well as the movement in the ad spends?
Saurabh Kalra (Westlife Foodworld Limited): Thank you very much for the question. But I don't think we operated like that. For us, value is actually a strategy and a platform which has got various aspects, and we have only strengthened the value platform without giving any extra discount over any of the previous quarters. So, we we have got the 99 rupees meal, if you see. We've got GMA Light, and we have also got discounts which we do with the partners. I would argue we have actually reduced a lot of discounting. And and and that's helped us you know improve some of the the inflationary pressures we had without touching too much on the prices. So, that's how we have looked at it. I don't think any discounts have increased, but value remains a platform for us, and you will see us continually continually improving and enhancing the strength of the value platform.
Percy Panthaki (IIFL Capital): Got it. And secondly, would you be able to call out the impact of inflation either in terms of food cost in or in terms of power and fuel, or any other of the line items, wages, etcetera? The endeavor here being that if this were a normal inflation quarter rather than the high inflation that we are seeing in the economy right now, how much of extra EBITDA margin we would have been able to garner?
Saurabh Kalra (Westlife Foodworld Limited): Okay, the inflationary pressure, like I spoke in my when I was speaking, was around 190 bps. Needless to say say, it was across line items. But when I look at inflation, we are always been living in India. In the last 30 years, 6% to 7% inflation is a given across commodities, line items, etcetera. While there were a few extraordinary inflation which came in, specially around employee cost, around one or two commodities which were hugely spiked, I wouldn't bother too much. What if everything if inflation wouldn't have hit and would have been working what it was last quarter, 190 basis points means we would have been better by 190 basis points. So, that's what it is.
87 more turns of this transcript: log in to Stocksigma to read the full call.