Macquarie expects demand recovery for India's quick service chain operators

Sapphire Foods India

15/01/2025 05:59

** Macquarie Equity Research anticipates uptick in demand
for KFC in India, expects a turnaround for Pizza Hut, and a
value-based recovery for McDonald's chains
    ** Devyani International  DEVY.NS  and Sapphire Foods
 SAPI.NS  operate KFC and Pizza Hut chains in India, while
Westlife Foodworld  WEST.NS  operates McDonald's
    ** Macquarie initiates coverage on DEVY and SAPI with
"outperform" while reiterating the same on WEST
    ** There is near-term risk for KFC's same-store sales
growth, but focus on value, strong competitive position in
chicken, favorable base are expected to drive steady recovery -
Macquarie
    ** Adds, pace of KFC store additions likely to be slower in
SAPI vs DEVY due to longer gestation for chicken adoption in
SAPI's KFC geographies
    ** Expects healthy EBITDA growth for DEVY in KFC given
competitive position in chicken category
    ** For WEST, expects continued growth in footfalls buoyed by
focus on value and launch of McCrispy chicken platform
    ** DEVY up 4.5% currently, while WEST up 0.2%; SAPI down
0.5%
    ** SAPI gained 16% in 2024, while DEVY and WEST shed 6% and
3%, respectively 


 (Reporting by Ashna Teresa Britto in Bengaluru)
 ((AshnaTeresa.Britto@thomsonreuters.com ; ( +91 8078332441))