POTENTIAL RISK - Restaurants active with Zomato have increased to 48 times the total branded QSR stores in FY24. This number was 22 times in FY19. “With more restaurants partnering with food delivery platforms, we think consumers now have more options, leading to fragmented sales. This is likely playing a part in the weakness in ADS of the QSR industry besides the general weakness in demand due to elevated inflation,” said Kunal Vora, Head of India Equity Research at BNP Paribas in a report.
GUIDANCE - The local out-of-home consumption in Thailand is eight to nine times a week. This is way higher than in India, where out-of-home consumption is once every 35-40 days, said the company’s management in its Q3 FY24 conference call. KFC is the market leader in Thailand with 1,000 stores, it added.
The newly acquired 283 KFC stores in Thailand albeit have lower EBITDA margins now at around 15 percent and Devyani expects to turn it around to the 20-22 percent which is seen in India, said Abraham. Considering the average Thai citizen eats out once a day, while the average Indian eats out once a month, the overall fried chicken market seems larger in the former, thereby boosting Devyani’s overall performance, said the analyst.
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