Westlife Foodworld Focuses on Store Expansion and Menu Innovation Amid Positive Outlook

In its recent Ideation Conference, Motilal Oswal hosted Westlife Foodworld (WESTLIFE) management to discuss business trends and future plans. Over the last six months, the company has witnessed a stable demand environment, with signs of slight improvement in the fourth quarter of FY25—despite it being a seasonally weak period.

Growth has also been supported by a favorable base. The management anticipates consumer sentiment to recover from late 1QFY26, helped by potential interest rate cuts and fiscal measures announced in Budget 2025.

Regionally, the western markets continue to lead the recovery, while southern regions, particularly Kerala and Hyderabad, are seeing a steady improvement.

Focus Areas: Menu Innovation and Store Expansion

To capture evolving consumer preferences, Westlife is strengthening its fried chicken portfolio, especially in South India. The company is also emphasizing value-driven offerings and continuous menu innovation to increase footfall.

Expansion remains central to its strategy. With 25 new stores added in FY25 so far, Westlife now operates 421 outlets. It aims to open 45 more stores during the fiscal year and targets 580–600 stores by December 2027. Drive-thru formats now constitute 22% of total outlets (93 restaurants).

McCafé Driving Sales Momentum

McCafé has emerged as a strong contributor, currently accounting for 12–13% of Average Daily Sales (ADS). The brand sees room for further growth, potentially reaching 18–20% by leveraging McDonald’s existing infrastructure.

Motilal Oswal’s Outlook: Neutral with Positive Sector View

Motilal Oswal has shifted its outlook on the quick-service restaurant (QSR) sector from cautious to positive, following tax relief measures in Budget 2025 aimed at the middle-income group. The firm expects this to boost consumption trends in the medium term.

While closely monitoring ADS recovery for its impact on unit-level profitability, Motilal Oswal maintains a Neutral rating on Westlife Foodworld stock, with a target price of INR 800, based on 35x FY27E EV/EBITDA (pre-IND-AS).

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