🧾 At a Glance
McDonald’s in India may taste familiar, but the franchise math behind it is anything but. Westlife Foodworld, the master franchisee in West and South India, has gone from ₹740 Cr in FY14 revenue to nearly ₹2,500 Cr in FY25. With 319 stores, 223 McCafés, 10,000+ employees, and zero chill in its valuation, this is fast food for fast capital. But is it digestible for investors? Let’s dig in.
🍟 1. From Maharaja Mac to Market Cap: The Story So Far
- Westlife Foodworld owns Hardcastle Restaurants Pvt Ltd, the master franchisee of McDonald’s in West and South India.
- Started as a JV in 1995 with McDonald’s Corp, it became 100% owned by Hardcastle in 2011.
- Now operates 319 McDonald’s stores + 223 McCafés across malls, highways, high-streets, and airports.
- Employs ~10,000 staff and boasts 75% of orders from digital platforms.
💥 So technically, Zomato delivers it. But Westlife makes the margin.
📈 2. Financials: Growth Happy Meal or Margin McScam?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 986 | 1,576 | 2,278 | 2,392 | 2,491 |
| EBITDA (₹ Cr) | 61 | 197 | 382 | 377 | 320 |
| EBITDA Margin | 6% | 13% | 17% | 16% | 13% |
| Net Profit (₹ Cr) | -99 | -2 | 112 | 69 | 12 |
| Net Profit Margin | -10% | -0.1% | 5% | 2.9% | 0.5% |
| ROE | -22% | -0.5% | 13% | 7% | 2% |
| Debt (₹ Cr) | 968 | 1,055 | 1,203 | 1,363 | 1,623 |
⚠️ Key Insight:
The company looks like it hit peak efficiency in FY23. Post that, margins dipped, profit fell, and debt ballooned by over ₹400 Cr in just two years. FY25 net profit is a meagre ₹12 Cr on ₹2,491 Cr revenue. That’s a net margin of… drumroll… 0.48%.
🧃 3. Quarterly Trends: Flat Fries, Soggy Margins
Westlife’s FY25 quarterly breakdown:
| Quarter | Revenue (₹ Cr) | OPM | Net Profit (₹ Cr) |
|---|---|---|---|
| Q1 FY25 | 616 | 12.8% | ₹3.25 |
| Q2 FY25 | 618 | 12.3% | ₹0.36 |
| Q3 FY25 | 654 | 13.5% | ₹7.01 |
| Q4 FY25 | 603 | 12.8% | ₹1.52 |
- Flat revenues quarter after quarter.
- OPM falling compared to previous years.
- Profits nosedived 83% YoY in Q4.
🧠 Expansion without operating leverage = margin meltdown.
💰 4. Why Is the P/E 892? Who Ordered This?
At ₹696/share, Westlife is trading at:
- Market cap: ₹10,849 Cr
- TTM PAT: ₹12 Cr
- P/E Ratio: 892x
Let that sink in. The stock price is nearly 900 times its earnings.
For comparison:
- Jubilant FoodWorks (Domino’s): 198x
- Sapphire Foods (KFC/Taco Bell): 376x
- Devyani Intl (Pizza Hut/KFC): Loss-making, but still lower EV/Sales.
So why is Westlife this expensive?
- “Premium consumption” tag.
- McDonald’s brand power.
- Expansion into tier-2/3 towns with lower CAC.
- Analysts expect operating leverage to kick in by FY26–27.
📉 But the current fundamentals just don’t support it.
🔄 5. Capex, Debt & Store Expansion — Too Fast, Too Franchised?
- Westlife added 47 stores in FY25, total now at 319.
- Capex = ₹221 Cr in FY25, funded largely via debt.
- Total borrowings have now hit ₹1,623 Cr.
- Interest expense jumped to ₹127 Cr in FY25, up 37% YoY.
🍔 Here’s the issue: They’re expanding aggressively… but profits aren’t keeping up.
This isn’t a classic “build now, profit later” story. It’s more like “build more, bleed more”.
📊 6. Peer Comparison: Who’s the Real Burger King?
| Company | Revenue (FY25) | Net Profit | ROCE | P/E | Stores |
|---|---|---|---|---|---|
| Westlife | ₹2,491 Cr | ₹12 Cr | 7% | 892x | 319 |
| Jubilant Food (Domino’s) | ₹5,201 Cr | ₹328 Cr | 13% | 198x | 1,920+ |
| Sapphire (KFC) | ₹3,010 Cr | ₹35 Cr | 5.8% | 376x | 799 |
| Devyani Intl (KFC/Pizza Hut) | ₹2,957 Cr | Loss | 6.3% | — | 1,500+ |
🍕 Verdict: Westlife has the lowest ROCE, highest P/E, and second-lowest net profit — yet one of the most aggressive valuations.
🏦 7. Shareholding & Promoter Moves
- Promoter holding: 56.25% (stable)
- FIIs: Increased from 9.4% (2022) → 12.9% (2025)
- DIIs: Slight dip from 24% → 22.3%
- Public: Only 8.2%
💼 FIIs are still nibbling — maybe for the long-term McFlation play?
🧠 Fair Value Calculation
Let’s not justify 892x earnings. Let’s normalize.
Assume:
- FY26 Net Profit grows to ₹60 Cr (a 5x jump — generous).
- P/E: 50x (still high, but for a “premium” QSR name)
Fair Value = ₹60 Cr × 50 = ₹3,000 Cr market cap
→ Per Share: ~₹193 (vs ₹696 now)
✅ EduInvesting FV Range: ₹180–220
Any higher requires faith-based investing… or fries-induced euphoria.
TL;DR: Can You Digest This Valuation?
- Westlife runs McDonald’s in South+West India. That’s powerful.
- 319 stores and 223 McCafés — solid presence, 75% digital sales.
- Revenues growing, but profits stagnating, margins slipping.
- Debt high, interest rising, ROE just 2%.
- And it trades at… 892x P/E.
🍟 Unless you’re bullish on FY30 dreams and calorie compounding, this may be better consumed with caution.
Tags:
Westlife Foodworld, McDonald’s India, QSR Stocks, Jubilant FoodWorks, Sapphire Foods, EduInvesting, Restaurant Stocks, Overvalued Stocks, High P/E India, McCafe, Franchise Stock, Indian Equities
✍️ Written by Prashant | 📅 June 20, 2025
EduInvesting — because markets need memes too.
