Westlife Foodworld (NSE:WESTLIFE) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to WESTLIFE FOODWORLD LIMITED Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. We would like to remind you that certain statements made in the management's today's call may be forward looking statements. These forward looking statements reflect management's best judgment and analysis as of today. The actual results may differ materially from the current expectations based on a number of factors affecting the business. Please refer to the Safe Harbor disclosure in the earnings presentation.

0:50 I now hand the conference over to Mr. Chintan Jajal. Thank you, and over to you, sir. Thank you. Thank you, Neera. Good evening, everyone, and thank you for joining us on WESTLIFE FOODWORLD's earnings conference call for the first quarter ended 06/30/2026. I am Chintan, Head IR at WESTLIFE FOODWORLD. From the management team, I have with me Mr. Akshay Jatya, President and CEO Mr. Saurabh Kaldra, Managing Director and Mr. Shardul Doshi, Chief Financial Officer. As always, we will begin today's session with Akshay sharing his perspective on company's overall strategy and outlook. This will be followed by Saurabh taking us through the key operational and financial highlights. We will then open the forum for question and answer session.

1:38 Throughout the call, we will refer to our earnings presentation and financial releases, which are available on the NSE BSE website as well as the Investors section of our website. With that, I now request Akshay to commence the session. Thank you and over to you, Akshay. Hello and a very good evening to everyone. Thank you for joining us today and I hope you have had the opportunity to review our Q1 FY 'twenty seven results. Q1 FY 'twenty seven marks our strongest top line growth, highest same store sales growth and fastest guest count growth in the recent past. Most importantly, every one of those numbers is being led by more people walking into McDonald's more often.

2:24 We delivered healthy double digit top line growth, positive same store sales growth in each of the three months and robust digital double digit footfall led momentum across our markets. May and June were particularly strong with mid single digit SSSG and encouragingly we are carrying that exit velocity into July as well. Our focus remains firmly on driving sustainable volume led through our value platform and operational excellence volume led growth, sorry. The everyday value meal continues to see strong traction and remains a key driver of dine in footfalls. We have always believed that McDonald's wins when our value proposition is trusted, predictable and habit forming, and that is exactly what we are building.

3:20 The building footfall momentum reinforces our conviction that our strategy is working. We are acquiring more consumers, driving repeat visits and strengthening McDonald's' relevance across everyday consumption occasions. I'm also pleased with the progress we are seeing in The South. In Q1 last year, we had highlighted our efforts on strengthening execution in the region and that the agenda has steadily moved from intent to impact. Our work around on ground execution, including local consumer relevance and network expansion is now beginning to reflect in the outcomes. The South ended the quarter with positive same store sales growth, a meaningful improvement that gives us confidence in the region's potential.

4:12 On operations, we continue to take strategic steps to get closer to the consumer. As part of this, we are realigning our operating structure from three divisions to five, building a sharper and more agile organization that is closer to every market that enables faster observation and action and is better placed to scale as we grow. Alongside this, we are empowering teams with better data and sharper decision making tools and reinforcing the disciplines that matter most, quality, service, cleanliness and value. These are the building blocks that convert football momentum into repeat visits and repeat visits into long term consumer trust.

5:01 During the quarter, we also continued to strengthen brand relevance and stay top of mind with consumers. As many of you would have seen, we launched our new brand campaign and anthem, Let's Family at McDonald's, celebrating McDonald's' thirtieth year in India. The campaign defines family beyond traditional boundaries and celebrates everyday McDonald's moments that we share with our different families, including friends, colleagues, and communities. As we look ahead, we remain committed to being a place where everyone feels that they belong and where many more memories will continue to be made. India's eating out market continues to offer significant headroom and with our strong brand, our modernized restaurant network, our digital capabilities and disciplined execution, we are well positioned to capture this opportunity and scale the business meaningfully over time.

5:59 I'm also pleased to share that our Board of Directors has approved an interim dividend of 40 per se equity share, underscoring our commitment to creating value for shareholders. Sorry, that's Rs. 0.4. We are on track to open over 60 new restaurants in FY 2027, in line with our guidance. On that note, I'm delighted to share that we have also received the Global Breaking Ground Development Award from McDonald's Corporation. This award recognizes development excellence in our network expansion journey and is a global award given to an developmental excellence market.

6:46 To sum it up, last quarter has been an inflection point. Our on ground execution excellence is helping us deliver strong momentum, which we believe will continue to play out. We are confident about the future and the road ahead. Thank you for your continued trust and support. I will now hand it over to Saurabh to take you through the operational and financial highlights for the quarter. Thank you, Asiya, and good evening, ladies and gentlemen. Our patience and commitment on getting the fundamentals right, which we have been speaking about from the last two, three quarters have finally started to begin to deliver our results. Q1 FY 'twenty seven actually reflects a very strong performance across the system. Consolidated revenue came in at a record INR 7,360,000,000, up 12% year on year and our highest quarterly growth in the recent past.

7:40 Same store sales growth stood at 4.3% and was positive all three months. Let me walk you through operating and financial performance in a little bit more detail. The WEST continued to deliver a very strong performance and South actually showed significant improvement, driven by double digit guest count across all three months. From a channel lens, on premise and off premise grew broadly in line, up 1211% year on year, respectively, reflecting the broad based momentum. Within Optimize, McDelivery continued to deliver and remains a key engine for growth for us. Our focus remains on strong execution, leading to sustainable growth while maintaining margin discipline and unit economics. Our everyday value platform supported by strong brand affinity continues to see healthy traction and remains central driver of footfall growth.

8:33 Now let me turn to profitability. Our operating EBITDA margin was broadly stable versus last year despite the inflationary headwind, particularly across fuel, food and packaging. I want to acknowledge the resilience shown by our brand and business model and our teams in navigating this environment. It reflects the impact of the structural work we have done over the last several decades last several quarters across supply chain, efficiencies, restaurant operations improvement and disciplined cost governance. In fact, we saw over 200 basis points of inflation across different line items, which were largely absorbed by cost governance and operating leverage. We remain optimistic of our P and L and expect some of the cost pressures to ease as geopolitical conditions improve.

9:18 Our focus will remain on disciplined P and L governance and execution. Gross margin at 67.6% was stable compared to last year. Restaurant operating margin stood at around 1,400,000,000, up 5% year on year. Operating EBITDA stood at INR $946,000,000, up 11% year on year. Cash PAT was INR 5,600,000 or 7% of sales. Digital sales contribution stood at 74%, up around 150 basis points year on year supported by higher engagement across digital channel. Cumulative app downloads have now crossed 55,000,000 with approximately 3,700,000 monthly active users. This gives us a powerful base to drive engagement and personalization.

10:07 Our network expansion, our pipeline remains healthy. During the quarter, we opened five new restaurants, taking our total to four eighty two restaurants across 79 cities. We continue to follow a prudent profitability led approach with a sharp focus on-site quality, payback period and long term store economics. Our guidance of over 60 new restaurants in FY 'twenty seven and five eighty to six thirty restaurant by December 2027 remains firmly on track. To summarize, our growth factors are intact and are beginning to yield encouraging green shoots. We remain focused on strengthening what truly matters to the consumer. And everyday value platform combined with iconic McDonald's brand and experiences delivered with consistency and backed by economic discipline.

10:55 Thank you very much for your time. Akshay, Shagun and I are now happy to take your questions. Thank you very much. We will now begin with the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Devanshu Bansal from MK Global. Please go ahead. Yes, sir. Hi. Good evening to the team, and congratulations on a strong FSG pickup.

11:41 Sir, this 30,000,000,000 outlook for FY '27 sort of requires this growth momentum to further accelerate. Right? So I just wanted to check our current trends giving you comfort to achieve this targeted top line in FY 'twenty seven? So the way I would put across is definitely we are building on the momentum. We wanted to lay this out from last year when we changed our strategy and we wanted to work on value as a platform and recruit a lot of people into the category. I think that has played out quite well. October, November, December was the first quarter where we got positive same store sales growth on the guest count front. January, February, March, we made the momentum go further, and it was also visible on same store sales growth in the first Jan third March quarter with April, May, June now consolidating.

12:35 We believe that this momentum is sustainable. And obviously, for Vision 2027, we need to be close to 15% plus of growth. And we believe we are on track to reaching that growth. And that's pretty much our target to at least follow the run rate of the next of the Vision 2027 we have. Understood. Thanks, Harv. And, actually, you mentioned that we are sort of changing the org structure from three units to five units. Checking if you can share some more practical insights which sort of necessitated this move, And what are the key outcomes that we are expecting from this change? So I'll pull this up to a larger strategy because, obviously, operational execution is our day to day job. But the idea behind it, which I also elaborated on, was so that our execution is closer to the customer.

13:32 And while we obviously increase the span of some of our hierarchies, we make sure that every layer is efficient and is as close to the customer as possible. So I think that we are making sure that that allows our WEST region to be closer to the customer because today it's a little more consolidated. So we're widening our number of resources that are closer to the ground there. And we're already doing the same thing in the South. So I think strategically it's important because we're making sure execution is closer to the customer and hence we're able to deliver better value and experience to the customer. Okay. So does that mean that feedback frequency will improve as in from that perspective you can make regular changes based on consumer feedback?

14:26 Is that... That's exactly so that's exactly the reason why we are obviously making sure we're closer to the customers so that we can respond faster and we can efficiently across layers deliver them the best experience. Okay. Got it. Actually, just last bit from my end, McDonald's recently held their global franchisee meet, right, so in The US. Any key insights which you can share maybe which were interesting from Indian context would be very helpful. Sure. So some of us were there, so it was a very powerful event. And I think every time you do go there, kind of appreciate the power of the brand. I mean, it's a brand at the consumer end, which is still one of the best brands in the world despite so much disruption in the consumer space, right? So I think that's obviously one thing that keeps energizing us. Number two, obviously, there's a lot of guidance in terms of the long term vision.

15:24 And I think it revolves around very similar levers that we continue to focus on. So obviously ensuring that we get value for money, we give consumers the best experience and we use technology to improve productivity and efficiency as well as experience for our customers. Got it, sir. Thanks for taking my questions. Thank you. Next question is from the line of Kai Valia from IFL Capital. This is Parsi Pansaki here. So I just wanted to understand both this quarter as well as sort of next two to three year kind of margins.

16:15 So this quarter, we've had a flat gross margin and a decent SSFG. And despite that, we have seen a minor decline in the EBITDA margin. So... And we already have EBITDA margins at fairly low levels versus long term historical average. So if 4.5%, 5% SSSD can't result in EBITDA margin expansion, then what will really drive it going ahead? And also, just wanted to understand, again, on a pre index basis, we are somewhere in the region of about 7.5% to 8% kind of EBITDA margin currently. What do we sort of target, let's say, by FY twenty twenty nine or something like that?

17:09 And what would be the way to reach there? Parshish, thank you very much for the question. Actually, like I explained, right, I think operating leverage is one of the biggest tools we have in our industry. And what we were able to do is there is some amount of unbudgeted, unprecedented inflation, which crept into our system. Some of the protocols hit at the time where all this everything was at a high. So I don't think it is structural in nature. I think this is passing in nature because most of the protocols also we have done is when the market even comes, the prices will go back again to where they were. So I think about it in a manner saying the operating leverage will play out. There is no worries on that front. Right now, because from the last two, three quarters, we have ensured that market spend is a little higher than what it is expected.

17:59 Some of the inflation had crept into various line items, primarily due to oil, both in terms of petrol, diesel and vegetable oil packaging costs went up due to crude going up. So all those costs have all of a sudden hit, which were not budgeted for, and that took us a little by surprise somewhat. But I think we are fully in control. And we did not actually wanted to take random price increases because we do price increases in a structured manner. So we've got enough and more windows to play with profitability and EBITDA. So I would like to assure you, like I said, also in my commentary, we are absolutely optimistic about our P and L, which if this momentum continues, we should see tremendous gains coming in due to flow through and other levers which we have on pricing, like pricing.

18:50 So if we maintain 5% to 6% kind of SSSG, what do you think we should expect EBITDA margins to be at by FY twenty twenty nine over a two, three year period? I would not give two to three year period because we are living in a VUCA world. We don't know what happens every year. But normal guidance, even in our vision we have given is we would like to remove 100,150 basis point improvement year on year. That's what I would look at it. We are and there is enough and more headroom for us to grow profitability. So that's what I would give as a long term guidance for us internally, that's how we look at it. How do we remove 100,150 bps every year and improve our profitability by that. So just wanted to understand this a little better. So at a normal inflation in the economy, even when it's not a very high inflationary level, but let's say just a normal inflation in the economy for all costs would be in the region of about three to 4%. So three to 4% SSG would be required just to even maintain the margins.

19:59 So at a five to 6%, how would you get such a high leverage of hundred hundred and fifty basis points? Is there some other sort of low hanging fruit in terms of cost reengineering that you are thinking? And if so, if you can shine some light on what those measures are? I'll give you details out here. But if you look at our track record, we've always gotten better than operating leverage year on year on cost. I think that's been one of our big strengths over the years if you look at our track record. And needless to say, there are many levers to play it out. One of those levers is product mix. Second lever is to be able to look at cost engineering. Third lever is looking at restaurant by restaurant and working on bottom performing restaurants. Then there is a lever of pricing. So there are many levers at play. Like I said, I would look at it and say the guidance from our side would be 100,150 basis points. You can think about that that much improvement should come if we performed well and we are disciplined around cost and P and L execution.

21:00 That is each year you are saying 100,150 basis points? Correct. Okay, got it. That's all from me. Thanks and all the best. Thank you, Kashyir. Thank you. Next question is from the line of Rohit from iPod PMS. Please go ahead. Yes. Thank you very much. Good evening, everybody. So just not so much in... For the near term quarter, etcetera. But, sir, just if I look at maybe the last six, seven years, let's say, prior to COVID, I think we've been probably in terms of store additions, we've been at the lower end in terms of growth rates. So we've been more measured in terms of store additions. So... However, in terms of the the drag in terms of economics for store, etcetera, that we've been probably one of the worst hits. So can you probably... And this is despite, like, some of the other peers have actually grown the results much more at a much faster rate so that cannibalization, etcetera, would have hit them or new store, etcetera, would have hit this overall economics.

22:08 But for us, that was not the case. But still, we've had a very sharp decline in the overall margins. I'm saying over the last five, seven years. So, I mean, can you maybe please explain that and if there's been any shift in the unit level economics of a store? So that was my first question. Okay. So to me, I don't know what data and how are you looking at it. Maybe we will have to understand a little better, and you can do a detailed deep dive with Chetan and team. However, from the zoomed out level, I think one of the things we pride ourselves is the unit economics over the long period of time has remained stable. I would not like to respond on what competition does or does not do because we would be worried about McDonald's system and McDonald's business. We are very proud of the fact that our average unit volume is almost 80% higher than any other competitor.

23:04 If you look at it from a profitability standpoint, there's a model which McDonald's has, which help us create an omnichannel, only usage brand. And there is a cost attached to it. So how I would look at it is what is our future going to be in India. I think as far as that is concerned, like I've said, we are very, very actually motivated with what we are seeing of what we can create as a business going forward. So just to add to that, I think in terms of store additions, we've done what's right for the market. We've been measured, as you rightly said. And I think as we've seen momentum play out, even in this year itself, we're opening around 60 plus new restaurants. So, I think we've moved very systematically and I think these are very aggressive numbers for the average unit volume that we deliver.

23:58 And while we are doing this, we're also keeping unit economics in check. We're working on improving profitability year on year. And I think our job is to explain the current and talk about the future. I think the past is the past. I don't understand the view that's being taken in terms of five, seven years because there have been years where our profitability has probably been one of the highest in the category along with strong growth. So let's forget that. We're talking about the current and we're talking about the future. I think both are extremely positive now and we're very encouraged with the momentum that we're seeing. And I would like you to look at the operating profit like you said over a period of ten years because whatever little data I remember is 2015 we were 2.5% operating margin. And from that time, except the twenty twenty three, twenty twenty four year where after that we lost a lot of operating leverage because of negative growth.

24:51 We've actually been stable and improving all the time. And that's why if you look at our track record, it's been from 2016 to twenty two, twenty twenty three, it's been strong, robust, and that's what I was pointing out when I said that's our track record. So maybe you can take offline a little detailed discussion on... Maybe I'll I'll probably yes, no, no, I probably will do that. So other question was sort of in terms of South, I mean, you alluded to some changes that you've been trying to make to do better there. So maybe if you can share that in a bit more detail, that will be really helpful. Sure. So I think we've called it out as a region of opportunity. Obviously, our brand has lagged a little bit over there, both in terms of value consumer perception as well as execution.

25:39 I think we've immediately solved the value for money part by ensuring that we have the right product, right proposition, we have the right portfolio of products. Now we're also simultaneously ensuring that our on ground execution only gets better because that's exactly what McDonald's does best. And I think we've been able to display that over the last six to eight months as we first announced it and have now moved towards impact. Our regions have all moved towards positive same store sales growth, which is a big improvement from where we were one year ago. So it revolves around ensuring that our everyday value meal continues building, our brand love and our brand relatability keeps building through our brand campaigns and our on ground execution gets better and better through our operational hierarchy.

26:28 So what I discussed earlier in terms of being closer to the customer, we've already been doing that in the South for the last six to eight months. And we've now done that even more so in the West. So I think this is giving us a lot of confidence moving forward in terms of the region's potential. Thank you very much and all the best. Thank you. Thank you. Next question is from the line of Avi Mehta from Macquarie Capital. Please go ahead. Yes. Hi, sir. Thanks a lot for this. Just wanted to check on the gross margin better. I understand that. Would you would it be fair to say that this quarter has represents or kind of reflects the peak of the impact? And hence, from here onwards, things should at least kind of remain at the current level sequentially or improve? Or how should I at that profile, the gross margin profile on the adjusted EBITDA? That's exactly what I also called out in my when I was talking about it, that for us, it is at the highest possible level, and we should see improvements from here on. Even if nothing improves, then it should not go any bad for this.

27:40 I think Got it. Just to add to that, Ravi, as we've always maintained, it's about operating margins because line items keep going up and down. I think we've done fantastic work though on Food Paper and gross profit. I think there are other line items that have also gotten impacted adversely due to the inflationary environment. I think they keep going up and down, but our endeavor is to continue to drive operating margin profitability, which Saurabh rightly said, can only get better from here on. Got it. So, Akshay, the way to see this is that as leverage gains currently have been kind of utilized to offset this inflationary pressures, There from where we are, operating leverage fees incrementally should kind of flow through the margins. If not, is how I should kind of flow to see this. Right? Is that the right? Yeah. That's right.

28:30 That's right. Just small clarification, Adi. It's a mix of two. We've obviously done a decent amount of work on cost also because the inflation has been quite unprecedented. But most of it kind of obviously the operating leverage has also helped with. Moving forward, we feel operating leverage will continue to play out and cost is something that we can control quite well, especially as times get better, which we are quite confident they will because obviously April, May were probably some of the worst months in terms of geopolitical impact on inflation. Got it. Got it. And just a follow-up, kind of disclosing that loop, way from a which are the line items or which are the key things that have hit us because you highlighted three line items, the fuel, packaging as well as in food.

29:20 So from a quantum perspective, the largest chunk would be what? So fuel, the three that you have said is impacting largely the food, paper and distribution, which is gross margin. There was impact on labor line item because of minimum wages. Also, we are spending more money on advertising and promotion. So the combination of all these are the ones which we are calling out as high inflation. Okay. Got it. Got it. That's all from my side. Thank you very And utilities also because of gas impact, which has happened because of gas increasing. Yes. That utility was another one. So that's why we are saying that probably at the peak, it should only get better from now. And so it's... And so in that, the highest one would be... It's like it's at food. The the ordering was in the matter of materiality. Right? That's how we were essentially also shared. Yes.

30:09 So so food, paper, distribution utilities would be the two higher ones. Rest of them were moderate, but inflation was there actually across line item because diesel also went up. So that also costed us a little bit, which where we are distributed network from our distribution center. More line items got impacted because of that. But I'm not, like I said, not worried even if the diesel remains at this price, we are okay, we have found a way to how to manage it. So we should be seeing improvement from here on. Perfect. That's very clear. Thank you. That's all from my side. Thank you very much. Next question is from the line of Krishnan Samamurti from Aashir Concentration Equities. Please go ahead. Okay. Congratulations on a good set of numbers.

30:57 Harking back to what Saurabh as well as said on the first part of the strategy, which led to recovery in South India. Can you elaborate on the value and the portfolio aspects? What exactly did you do? What worked? And what is continuing to work here? So number one, obviously, our everyday value platform, we continue to market it across regions. And I think that has given us sustainable increase or substantial, sorry, increase in guest counts entering our restaurants. Number two, in Q1, we launched our brand campaign, which is one that's having a great impact in terms of relatability to the brand across consumers.

31:42 So whether it's your Gen Zs, your families, I think a lot of that has resonated across regions. And lastly, in the South, I think we focused very strongly in our key cities and markets on on ground execution. So in terms of being closer to the customer, in terms of our operational hierarchy, in terms of how we are auditing quality, service, cleanliness and value like we said, I think that's been extremely sharp in the South versus the past. And we've learned from everything that we've gone through in the region to continue to build on this positive momentum that we've been working on since the last six to eight months. Thanks,. Did this strategy also entail that until you got this... The the execution right? Was it also curtailment in terms of store openings? And now that you believe that you've turned the corner, would South also receive its fair share of store openings in the 60 stores that you highlighted for the current year?

32:45 So, you know, it has been quite broad based if you take an average of the last, maybe three years. In the last year, perhaps, we did open a few more stores in the West because obviously we've been trying to solve this value perception as well as consumer sorry, this consumer value proposition as well as on ground execution in the South. So we have kind of tapered it a little. But again, I think we are seeing the momentum because obviously unit economics play out as leverage comes into play. And for the South, we are definitely a lot more confident and, you know, you will see more store openings there as well. Okay. And just like you highlighted at a broader level, is the momentum in May and June better than what it was in the preceding months and so on in South India? Yes, definitely.

33:38 I think we've already highlighted that throughout our commentary. We've seen a gradual build from Q3 of last year, and we've seen that play out in q four and q one, the momentum of this year is extremely encouraging. Okay. My question actually was specifically to South India. That that is visible in South India as well. Right? Just like the rest of the Definitely. Because, I mean, we have more than half of our store base there. So if we're seeing that momentum, it will be broad based because if the South was not growing, it would drag us down. Very clear. Thanks, Akshay. Thanks, Ara. Thank you. You. Request to all the participants, kindly limit yourself to two questions per participant, and rejoin for a follow-up. Next question is from line of Jayadoshi from Kotak Securities. Just a quick clarification.

34:34 Saurabh, did you sort of when you guided for 100,150 basis point margin expansion at a pre index level, should we expect that starting FY twenty seven, so like your last year's pre index margins were 7.6%. So do you think that this year itself, we'll see 100 bps plus margin expansion? That's what we are working towards. That's why I said I remain optimistic on the P and L. Right now, whatever is there, we feel that there are enough levers for us to be able to expand over last year to this year and keep on building that momentum from here on. Understood. And sorry, but is this a formal guidance? Or is this an aspiration? Let me put it this way. In Vision 2027, we have put this as our vision statement.

35:22 That's what we want to do. That's what we hold internally ourselves accountable to. And right now from where I see the year panning out, I feel quite optimistic about it. That's very helpful. Thank you so much and wish you the very best. Thank you. Thank you very much. Next question is from the line of Harish Advani from Axos Capital. Please go ahead. Hi. Thank you for the opportunity. I just wanted to double click on the South comments that you made, particularly because you said we have been focusing on the top cities in that region. So how much more of a improvement are we expecting? Because now we can go more broadly? So how far along are we in that journey of improving the South performance is what I want to talk.

36:10 Okay. First, I don't want anybody to feel like we are lagging behind in South. We've got great number of restaurants in each of the cities. We have got 60 plus restaurants in Bangalore. We have got almost 35 plus restaurants in Hyderabad and 20 plus in Chennai along with some of the key cities like Wisek, Coimbatore, good number of stores. So what we wanted was to be to have a lead like what we have in WEST in South. And I think, like Akshay said, we are seeing green shoots by doing absolute basics of our business, which is strengthening value, going talking about the brand, including in vernacular language, and finally, making sure the execution of the restaurant is top notch. So those are the three levers, and we are expecting how to improve considerably and we're reaching a certain level. See the advantage we have is we have seen how WEST played out.

37:04 South, we went also almost ten years later. So we already know what playbook we have to work on. And I think we are far more confident of South turning around strongly and then reaching where WEST is sooner than later, while we continue to consolidate WEST, including breaking down the regions with Akshay. And we've given this guidance in our vision document as well, if that helps give more flavor. It's just that in terms of execution of the levers, these are our focus areas and we're trying to be more specific about them now. Perfect. So very clear. And second and last question. So the comment on growth being driven by double digit footfall growth, right? And last quarter, it was mid single digit footfall growth. So the question is, as the customer acquisition and repeat visits improve, when do you see the ticket growth also coming in? And with that, the mix improving as well, both contributing to the.

38:07 Yes. We already started to see the green shoots of ticket improving last quarter itself. We were far higher in terms of or far lower in terms of ticket in January, February, March. So the first job was to make sure the momentum of a lot of customers coming in the restaurant, which we've not seen for a long time, make that happen. And I think December was the inflection point where we started to see that momentum. It got carried in January, February, March and April, May, June also it played out quite well. And April, May, June for us was because we had reached double digit plus. We were very excited and happy and we thought we could share with you all that the strategic levers are actually playing out quite well the way we had thought about it and we communicated in the last one or two investor calls in the past.

38:55 Okay, sir. Thank you. Those are my questions. All the best. Thank you. Thank you very much. Thank you. Next question is from the line of Anuj from Antik Stockbroking. Please go ahead. Hi, team. Thanks for the opportunity. So just one question on South. So say the exit areas that we have clocked with the positive SSSG near the end of the quarter, if it were to hold for the remaining part of the year, where would we sort of land in terms of SSSG in the South? In say, high single digit or mid single digit? So like we've maintained, right, the momentum is building. We have delivered close to 4.5% this quarter. I think mid single digit is something that we are confident about. And I think we expect the growth to be broad based. I don't think that we can build out each region's performance for the rest of the year as that would be significant forward guidance in terms of our numbers. But I think we've given a lot of flavor in terms of what could be possible.

40:01 Thank you. And secondly, on general and administrative expenses, I think we saw a sharp decline this quarter of 6.5. How would the run rate look like for the remaining part of the year given that most of our restructuring is now complete? So again, I think, Saurabh had already given you the EBITDA guidance as such. And let's not look at expense rate, but G and A as a head, we should be in the range of 6% to 6.5%. And let's look at the bottom line. I think that's what we are focused on and we will continue to remain focused there. Thank you. Thank you for your time.

40:47 Thank you. Next question is from the line of Sakshi from Old Bridge Capital. Please go ahead. Hi, team. Thanks for taking my questions. Just two questions. Firstly, on SSH Actually, you're not properly audible to us. Hello? Okay. Just a minute. Am I audible now? Yes, better. Yes, okay. So just two questions. Firstly, on the SSH, it has been discussed already. So you mentioned 4.3% for the quarter, and I'm assuming WEST should be much higher. And we also have seen a broad based improvement in the strategy for the entire industry as a whole. Just wanted to pick your vein on if anything has structurally improved because we have seen this improvement for the past two, two and a half quarters now.

41:45 So what are what are... What is your reading from the ground? What is leading to this? Is it more that, you know, all of you from the industry have been doing a lot of interventions? Is it only because of that or you see something else also driving this? That's one. Secondly, I heard you saying that you want to go closer to the customer result and and invest. So does it have any impact on the store economics or probably the store size or the payback period? So just those two questions. Okay. So let me answer both of them one by one. First is, I think our strategy was very clear when we laid it out.

42:31 I cannot comment on competition because I can share our numbers that our growth has come largely on the back of a double digit footfall guest last guest count growth, so which we are very, very proud of. What we are seeing is structural because what we did was we did a lot of trials before in last year in June, July, August, September before we launched the 99 value platform first in WEST, then systematically did it in South in March. And what we're seeing are the shoots coming out of the structural work, which we started to do last year and deployed it with full focus and clarity of what we wanted to achieve. So that's part one. Sorry, I missed your second question. Closer to the customer. Yeah. So on the second part of closer to the customer, to me, it does not mean store size, but it also means responses.

43:24 Right? So for example, now the geography has become large enough for us, like with Gujarat almost having 100 restaurants, Una has restaurant, Maharashtra having 100 restaurants, Mumbai having 100 restaurants, think about them as this cluster of stores and respond to what is required. For example, a Ganpati festival might impact far more in rest of Maharashtra than, say, in Gujarat. So we remain close to the consumer, do our tactical intervention close to the consumers so that we can optimize on a disciplined P and L improvement starting from top line. Understood. Clear. Thank you. Thank you. Next question is from the line of from.

44:15 Please go ahead. Thank you for the opportunity, and congratulations on the revenue growth you have achieved during this quarter. I would like to ask that the version 27 was to increase the number of stores to five eight three two six forty, and I believe the current stores are at two. And then March 6, we talked about the guidance where 60 plus was the number where we were comfortably profitable. But on the, we have mentioned that we are still on track to receiving the five fifty number and seeing the current quarter growth in the number of states sales. I just wanted to ask is that guidance being revised since we have seen a margin compensation on quarter on quarter basis this quarter as well?

45:11 So honestly, the question was extremely muffled, but what I understood was, are you confirming that we are on track for our guidance of number of stores? And if that is the case, we are opening 60 plus new restaurants this year, and we do plan to continue with that momentum. So we are on track to deliver our guidance of five eighty to six thirty restaurants as per Vision 2027. Okay, sir. Could you give me the pre endless margins? I think I may have missed that. Sorry? Could you give me the pre endless margins? I think I may have missed that. So you can you can take that from our presentation. It's clearly laid out over there. Thank you, sir. That will be all from my side.

46:02 Thank you. Next question is from the line of Anirudh Mukherjee from Julius Baer. Please go ahead. Thank you for the opportunity to ask a question. I just want to ask if aside from just inflation, would you say that a greater shift in focus to value led initiatives and volume led growth in this segment has led to a downward pressure on the margins? And if so, would future sales growth in respect to everyday value platform strategy possibly have a long term effect on margins? No, I don't think so, because we've already called out that most of the pressure has come due to inflation on our P and L. In fact, we have made sure that we have more than enough in our pipeline on cost to ensure we can continue to deliver value for money to our customers. And again, the way we do price and product mix ensures that this is our core competency.

46:59 So if this was something we couldn't afford, then I don't think that McDonald's as a business model would be viable. So I think I want to answer it like this so that everyone understands that funding for everyday value platforms is our core competency and is not something that dilutes margin. Okay. Thank you. Thank you. Next follow-up question is from the line of Devanshu Bansal from MK Global. Please go ahead. Yes, sir. Hi. Thanks for the opportunity. Sir, our delivery business growth has accelerated in this quarter. Right? So I just wanted to check what has... Even this, we were working... We were having some issues with one of the aggregators.

47:46 So is that also behind now? And subpart to this is because that delivery growth has accelerated, is that also the reason why the other expenses have seen an increase? So if you could throw some light there. So number one, the good news was, as you saw, delivery as a percentage actually was flat to a little marginally down by 1%. So I would not look at it that way. In fact, the growth was absolutely broad based. But to your point, I don't think I think we've always maintained with all our 3PO partners, we have worked in the spirit of partnership, and we've always had long term great relationship with them to grow and move the business forward. As far as digital is concerned, I think the world is moving to digital. Data is also a currency. So when we talk digital, if you look at a lot of drops we have done in terms of our promotions happened on our Mittalis app, including our McDelivery. So that's contributed also to a long term success. We're also anchoring very sharply in terms of loyalty, etcetera, through loyalty points on our McBarnish app.

48:57 And all of it is giving us quite substantial amount of consumer base, like I said, point 7,000,000 monthly active users for us to have an opportunity to think about how to make them come back again, deliver personalization journeys, etcetera. So I think if we will not grow digital, we will really not grow. So that's one of the things which we have ensured that we track and we also communicate to you guys of how that's moving. Got it. And lastly, sort of one bookkeeping question. Over the last three, four months, if you could call out the collective price increases, if we would have done, what is the amount that we have taken, price hike? We haven't done any price increase yet.

49:43 Like we've always maintained, we typically do 50% of the inflation to 3% broadly is the price increase guidance we give every year, but we do it very slowly. We do it by working behind the back rather than making it upfront in consumer space. So right now, we haven't done any price increase, but we don't declare when we are going to do it, but we will do it after due process of consumer research, etcetera, etcetera, to ensure that the price increase isn't something which disrupts our momentum or margins. So is anything due for current year or that's not under consideration as of now? Like I said, on an annual basis, we take around 3% price increase. So we haven't taken anything yet. So obviously, at some point in time, we will take Got it, sir. Thank you.

50:34 Thank you. Next question is from the line of Vishal Panamia from YES Securities. Please go ahead. Yeah. Hi, Tim. Am I audible? Yes. Yeah. So good to see a strong, just strong growth, in the business. And I've also seen a lot of sales from merchandising have also increased quite a bit. Is there any impact or is there higher cost from the merchandise that you have been offering in the last two quarters? Our business actually is about selling burgers, fries and Coke. I think like I spoke about, we need a very strong McDonald's brand along with affordability and value and both of them combined are a potent powerful combination for us to recruit consumers and make them come back again and again. So this recipe of merchandising, we're not overtly doing it. We do drops, which are actually lasting only two to three days and we get out of it. So while it might look a lot of activity, we are actually doing far lesser than ever and being focused on what our real agenda is, which is to be able to grow burger, fries and Coke sales.

51:49 Okay. So basically, I'm trying to understand. So if the inflation kind of settles down across line item COGS and other overheads, so the merchandising cost will not act as a barrier for the pull through of margins, right? No. So we do not give anything for free. It is all taken from the consumers. So in a manner in which it is a win win for us and the consumer both. So these are drops where we get the benefit of scale. We do it for two to three days, charge that cost to the consumer, but our focus is to sell burger, fries and beverages at a margin accretive number. Understood. And lastly, correct me if I'm wrong.

52:34 So I've seen that there are two applications which a consumer has to download. One is a Mac delivery and then there is an in store offer application. Is that right? And if yes, are we looking to integrate both the application? So right now, we have got two different application for two two different use case. One is primarily dine in with a lot of offers and loyalty. The other one is an e commerce app if you want to order something at home. At a later point in time, at some point in time, we'll definitely integrate. But for now, we see both of them having a clear purpose and both of them actually having significant amount of growth over what were averages. So we see role of growth right now as we see in the shorter term.

53:24 Okay. So the number of dollars is not a cumulative of both the application, right? It's just the delivery. Is It's cumulative. It's cumulative of both, but it is because it's not three active users. Both... If some customers are common, they wouldn't feature like this. Okay. Understood. Understood. And then lastly, so next quarter, obviously, we have a low base in terms of same store sales growth. There is a decline on a Y o Y basis. Does that give you confidence to and with the current momentum, does that give you confidence to deliver a high single digit kind of same to same growth? And with that kind of SSG, the margin improvement will also be there because operating leverage, which kind of was missing this quarter, will also come into play next from for the next two quarters.

54:17 So will that whole process be right? So Vishal, I'll not give you any forward looking statement. Like I said, we remain confident to be able to deliver the mid single digit for sure. That momentum looks like staying. We also are confident in order to for us to mitigate. I think it's last year has happened. We are working on a new base starting this year. The momentum has started coming in the business back from December, like I said. I think it's even it's only grown from thereon. We are confident about how the year will look like, which means we should be able to hold on to the current momentum and build from here on if not more. Okay. Okay. Thank you, sir.

55:02 Best of luck to Sanjay. Thank you. You. I remind that to all the participants, you may press star and one to ask a question. Next question is from line of from Renolia Financial Service. Please go ahead. Thank you. Thanks for the opportunity. Sir, as you have guided for 60 plus store opening in FY 'twenty seven, that quarter one saw only five net addition, right? So is there any changes through to store opening? Or should we expect the broad ramp up from quarter two onwards? Shruti, on this one, actually, we had some of the LPG restaurants. So we had inventory of a lot of fryers, which were electric. So we used that to convert our existing store due to LVT crisis.

55:50 So we had a little bit of inventory gap. So it is just about time line. So while five stores have opened, we remain confident of being able to deliver the 60 stores, which we have talked about in this financial year. Okay. Thank you and all the best. Thank you, Shruti. Thank you very much. As there are no further questions, I'll now hand the conference over to the management for closing comments. Thank you so much for joining us this quarter, and we look forward to seeing you next quarter. Thank you. Have a good day. Thank you. You very much, members of the management. On behalf of WESTLIFE FOODWORLD LIMITED, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.