Westlife Foodworld reported a 16% year-on-year revenue increase to INR 7.6 billion in Q2 FY27, driven by a 10.1% jump in same-store sales growth. Despite the strong quarterly performance, Motilal Oswal has maintained a neutral stance with a price target of ₹600. The brokerage’s outlook remains balanced, considering both the company’s recent operational recovery and current valuation levels in the competitive QSR space.
Westlife Foodworld, which operates McDonald’s restaurants in West and South India, has reported a solid performance for the second quarter of the 2027 fiscal year. The company recorded a 16% increase in revenue compared to the same period last year, reaching INR 7.6 billion. This marks the strongest growth the company has seen in the last 13 quarters, suggesting a potential turnaround in its business momentum.
Strong Q2 Performance
A standout metric in the latest report is the company’s same-store sales growth (SSSG), which measures sales from stores that have been open for at least a year. Westlife posted an SSSG of 10.1%, a significant improvement from the 4.3% growth seen in the previous quarter. This result also beat market expectations, which had estimated growth at around 6.5%.
The company’s strategy of pushing its value platform—offering lower-priced menu items—appears to be working, as it reported a double-digit increase in the number of customers visiting its stores throughout the quarter. Growth was also broad-based, with on-premise dining sales climbing 17% and off-premise channels (delivery and takeaway) growing 15%. Notably, the company’s recovery in the southern market has improved, with regional performance now aligning more closely with its well-established western market operations.
Valuation and Outlook
Following these results, brokerage firm Motilal Oswal maintained a neutral rating on the stock, setting a price target of ₹600. While the operational performance has been strong, the neutral stance reflects a balanced view on the company's valuation. Investors often use such ratings to signal that the stock price is fairly valued relative to its current business prospects, meaning it may not have significant immediate upside or downside based on current data.
For investors, the broader context of the Quick Service Restaurant (QSR) sector remains a critical factor. The industry has recently faced pressure from high inflation, which has impacted how much money consumers are willing to spend on eating out. While Westlife’s growth in guest counts is positive, the company’s future performance will depend on its ability to maintain this momentum amid competitive pressures from peers like Jubilant FoodWorks and Restaurant Brands Asia.
The company has indicated that October trends are consistent with the second quarter. Looking ahead, investors may want to track the performance during the upcoming festive season, where high-single-digit same-store sales growth is expected as a baseline. The key monitorable will be whether the company can continue to drive higher guest counts as inflationary pressures ease and consumer discretionary spending potentially stabilizes.