Revenue momentum real, but profitability collapse masks margin risk

Revenue +11.9% YoY to ₹735.6 Cr; SSSG 4.3%, positive all three months

Gross margin 67.6% vs prior year stable; claimed operational leverage and cost actions absorbed inflation

Operating EBITDA ₹946 million, +11% YoY; margin stable on reported basis

Q1 delivered +11.9% revenue, but PAT collapsed -52% YoY to ₹0.6 Cr; profitability deteriorated sharply

South ended quarter with positive SSSG (improvement from prior year negative), footfall-driven

Prior call (Q4 FY26) noted South struggles; Q1 FY27 delivered positive SSSG in region for first time in extended period. Execution improvements and value platform working.

Restructure announced to push execution closer to customer; expected to improve feedback loops and tactical response speed, particularly in West and South clusters.

PAT -52% YoY (₹0.6 Cr) vs prior Q1 FY26 of ~₹1.26 Cr. Despite strong topline, profitability deteriorated sharply due to unbudgeted inflation and cost headwinds.

No formal guidance lowered. Vision 2027 targets (60+ stores, 15%+ growth) reaffirmed. 100-150 bps annual EBITDA expansion confirmed as internal aspiration, pending execution.

Building on momentum from value platform launch. Need 15%+ growth for Vision 2027. Positive SSSG all three months and carrying into July. On track.

Operating leverage is primary tool. Track record shows consistent cost leverage. Product mix, unit optimization, restaurant-by-restaurant improvement, pricing. No detailed breakdown offered.

Past is past. Current and future are extremely positive. Unit economics stable over long term.

Yes, at highest possible level. Should see improvements from here on. Inflation likely peak; most impactful months were April-May.

Everyday value platform (strong traction on guest counts). Brand campaign ('Let's Family') resonance across regions. Sharp focus on on-ground execution, QSC&V discipline.

Vision 2027 vision statement, internal accountability. Hopeful from current trajectory, but not formal quarterly guidance. Depends on execution.

Good store presence (60+ Bangalore, 35+ Hyderabad, 20+ Chennai). Seen West playbook work; South 10 years behind but now deploying same levers. Confident South will reach West levels soon.

Momentum building. Delivered 4.5% quarter. Mid-single digit confident. Won't forecast by region specifically.

No. Value platform is core competency, not margin dilutive. We have cost pipeline to support it. Pricing and product mix ensure viability.

None taken yet. Typically 3% annual (50% of inflation pass-through) via behind-the-scenes optimizations, not upfront. Will do after consumer research to avoid disruption.

Drops are 2-3 days, limited. Win-win with consumers; costs passed through. Margin accretive focus on burger, fries, Coke sales.

Q1 opened 5 stores (inventory gap due to LPG conversion); pipeline healthy. On track for annual 60+ run rate. Long-term store count confirmed.

Saurabh stated need for 15%+ growth to reach Vision 2027 goals. Q1 delivered 11.9%; suggests FY27 full year requires acceleration. Not formally stated as ₹30B target.

4.3% Q1, positive all months. May/June mid-single digit. Momentum carrying into July. But no specific FY27 quarterly breakdown given.

Food, paper, utilities, distribution most impacted. Geopolitical normalization (lower oil, commodities) expected to ease pressure. Management confident in further improvement.

Saurabh clarified this is internal Vision 2027 aspiration, not formal quarterly commitment. Depends on operating leverage, cost controls, pricing. Q1 margin flat/negative, so execution risk high.

Management assumes commodity cost normalization. But pricing not yet taken; consumer resistance risk. Timing uncertain.

Q1 PAT -52% YoY despite 12% revenue growth. 200+ bps unbudgeted inflation (fuel, food, packaging, labor) absorbed via cost actions; no pricing taken yet.

South inflection (positive SSSG) is early-stage and depends on sustained on-ground execution, brand relevance, value perception. Reversal risk if execution falters.

No price increases taken in Q1 despite inflation. Annual guidance is ~3% pricing. Risk if consumer resists price hikes or value platform loses elasticity as pricing implemented.

PAT collapse signals underlying unit-level stress. If unit economics worsened, 60+ annual store additions and Vision 2027 (580–630 stores) ROI targets at risk.

Fuel and commodity inflation tied to geopolitical tensions (Russia-Ukraine, Middle East). If conflicts persist or escalate, normalization delayed, inflation sustained.