1. At a Glance
If McDonald’s burgers were stocks, Westlife Foodworld Ltd would be that over-ambitious outlet that expanded too fast, borrowed heavily, and is now wondering why profits haven’t RSVP’d to the party.
Here’s the quick masala snapshot. Market cap sits around ₹7,440 Cr, while the stock is chilling near ₹477, almost 46% down YoY—which tells you Mr. Market is clearly not loving the Happy Meal right now. Q3 FY26 revenue came in at ₹671 Cr, growing a sleepy 2.6% YoY, while PAT collapsed 63% YoY to a barely-there ₹1.02 Cr. ROCE is stuck at 7.1%, ROE is a tragic 1.3%, and debt has ballooned to ₹1,662 Cr with a Debt/Equity of 2.67.
Yes, the company runs hundreds of McDonald’s outlets. Yes, store additions continue. But profits? They’ve taken a smoke break. The stock is priced at ~25x EV/EBITDA, while returns look more like a PSU canteen than a global QSR giant.
So the real question: is this a temporary indigestion or a structural diet problem?
2. Introduction – Golden Arches, Tin Returns
Westlife Foodworld is the master franchisee of McDonald’s in West and South India through its subsidiary Hardcastle Restaurants. On paper, this sounds like a dream gig. You don’t invent the brand. You don’t market from scratch. You just roll out stores, flip burgers, collect cash, right?
Well… welcome to Indian QSR reality.
Despite running 450+ restaurants, managing McCafés, Drive-Thrus, EOTF stores, and pushing aggressive expansion under Vision 2027, Westlife’s financials are behaving like a teenager with pocket money—lots of spending, little savings.
Over the last decade, revenue CAGR is a respectable ~13%, but profit CAGR is a sad ~8%, and that too helped by a few good years post-COVID. The recent trend? Margins compressing, interest costs rising, depreciation exploding, and PAT turning allergic to growth.
Q3 FY26 was especially telling. Same-store sales growth (SSSG) dipped -3.2%, floods in South India hurt footfalls, eating-out sentiment softened, and suddenly all those shiny new stores started looking
like EMI machines.
So while McDonald’s signboards shine bright, the balance sheet is squinting hard.
3. Business Model – WTF Do They Even Do?
Westlife doesn’t “own” McDonald’s. It rents the dream.
Under a long-term franchise agreement, Hardcastle Restaurants provides the capital, runs operations, hires staff, leases properties, and handles compliance. In return, McDonald’s Corporation provides brand, systems, menu innovation—and sends a royalty bill of 4.5% of sales every year.
The model is simple:
- Build stores (heavy capex)
- Drive volumes (discounts, delivery apps)
- Pay royalties
- Pray margins survive rent, wages, oil, cheese, electricity, and Swiggy commissions
As of recent data:
- ~59% revenue comes from dine-in
- ~41% from off-premise (delivery & takeaway)
- ~67% of orders are digital via apps & kiosks
- App downloads: 30+ million
Sounds modern, right? But here’s the catch: QSR economics work only at scale and with stable margins. Westlife has scale, but margins are being slowly deep-fried by:
- Rising interest costs
- Higher depreciation from continuous store additions
- Royalty escalation
- Discount-led demand revival
Basically, growth is happening—but it’s expensive growth.
4. Financials Overview – Numbers That Need Therapy
Quarterly Comparison (Consolidated, ₹ Crore)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 670.7 | 653.7 | 641.9 | +2.6% | +4.5% |
| EBITDA | 97.5 | 88.1 | 67.2 | +10.7% | +45.2% |
| PAT | 1.0 | 2.6 | 27.7 | -63.0% | -96.3% |
| EPS (₹) | 0.07 | 0.45 | 1.78 | -84% | -96% |
Commentary:
Revenue growth exists, but it’s anaemic. EBITDA improved QoQ thanks to cost tweaks, but PAT got nuked by interest + depreciation.
