{"id":29433,"date":"2023-04-24T13:33:58","date_gmt":"2023-04-24T08:03:58","guid":{"rendered":"https:\/\/flattrade.in\/kosh\/?p=29433"},"modified":"2023-04-24T13:42:11","modified_gmt":"2023-04-24T08:12:11","slug":"qsr-industry-to-see-20-25-sales-growth-in-fy24-report","status":"publish","type":"post","link":"https:\/\/flattrade.in\/kosh\/qsr-industry-to-see-20-25-sales-growth-in-fy24-report\/","title":{"rendered":"QSR industry to see 20-25% sales growth in FY24 on store expansion: Report"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"29433\" class=\"elementor elementor-29433\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-710dc29 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"710dc29\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3f8833b5\" data-id=\"3f8833b5\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-23f4cb9b elementor-widget elementor-widget-text-editor\" data-id=\"23f4cb9b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The domestic quick-service restaurant (QSR) industry is likely to see a revenue growth rate of 20-25% in FY2024 on account of continued demand uptick and increasing penetration of restaurants, driven by a rapid expansion of stores, according to rating agency ICRA.\u00a0<span style=\"font-size: 16px;\">These numbers are, however, slightly less than revenue growth of about 30-35% in YoY terms estimated for FY2023, the report added.<\/span><\/p><p>ICRA expects the top five listed companies in the domestic QSR industry are likely to add about 2,300 stores between FY2023-FY2025 with an estimated capex of about Rs 5,800 crore (excluding refurbishment) for this period.<\/p><p>The domestic QSR industry is looking at aggressive store capex over the medium term, helped by favourable demand outlook, the rating agency noted. ICRA also stated that majority of the capex is expected to be funded through internal accruals and cash on the books, having raised money through the pre-IPO \/IPO route in the last two fiscals to support the planned capex in the near to medium term.<\/p><p>Suprio Banerjee, Vice President &amp; Sector Head \u2013 Corporate Ratings, ICRA Limited, said, \u201cThe capex spree in the QSR industry is likely to be driven by favourable demographics, steady urbanisation in India, growing per-capita GDP and significant headroom available in terms of QSR penetration, compared to a developed economy like the US.\u201d Banerjee further said that the increasing formalisation of the sector is expected to improve the penetration levels significantly.<\/p><p>In addition, higher technological absorption amidst changing consumer behaviour, wherein delivery as a medium is much more accepted, shall support the increasing penetration. The capex over FY2023-FY2025 is estimated at about Rs 1,800 crore to Rs. 2,000 crore (excluding refurbishment) per annum, which would be 2.5 times that of the levels seen in fiscal 2020.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-70111bc6 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"70111bc6\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-4acca14d\" data-id=\"4acca14d\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-1c7ed4e7 elementor-widget elementor-widget-heading\" data-id=\"1c7ed4e7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Factors driving sales <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-41fe45fd elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"41fe45fd\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3a15881c\" data-id=\"3a15881c\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-5bc76807 elementor-widget elementor-widget-text-editor\" data-id=\"5bc76807\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The domestic QSR industry witnessed a sharp recovery in average daily sales (ADS) and revenues during FY2023, supported by demand drivers like changing food consumption habits, favourable demographics, improving purchasing power, steady urbanisation, and new store additions, the rating agency said. Moreover, factors like better value proposition from QSR players with enhanced product and service offerings, wide adoption of user-friendly and convenient delivery applications, and tech-enabled delivery networks also fuelled growth.<\/p><p>Additionally, the easing of restrictions which was imposed due to the pandemic and increased vaccination coverage, led to the industry witnessing a strong growth<br \/>momentum with notable recovery in the ADS levels at Rs 85,789 in FY2022 compared with Rs 67,479 in FY2021. The ADS further rose to about Rs 97,696 in the first nine months of FY2023 compared to about Rs 85,355 in the corresponding period of FY2022.<\/p><p>In the long run, revenue growth shall be supported by factors like rising QSR penetration levels, a shift from the unorganised segment to the organised segment with a preference for branded QSR players, given the hygiene and convenience factors i.e. delivery over dine-in), etc., according to ICRA.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-3bc52d04 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"3bc52d04\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-58982144\" data-id=\"58982144\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-4adfff56 elementor-widget elementor-widget-heading\" data-id=\"4adfff56\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Operational Performance<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-311c8804 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"311c8804\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6d9487ac\" data-id=\"6d9487ac\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-46ec2445 elementor-widget elementor-widget-text-editor\" data-id=\"46ec2445\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Even though, there has been a healthy recovery in the industry\u2019s operational metrics such as ADS and sales per store in FY2023, gross margins were impacted due to inflation and competition. Gross margins have been sequentially contracting for the sample (five companies) analysed from Q1FY2022 till Q3FY2023, reflecting the partial ability of QSR players to fully pass on the rise in raw material costs, given the tough competition from both the organised and the unorganised segment, ICRA noted.<\/p><p>\u201cIndia\u2019s dependence on imports for edible oils further exposes the players\u2019 margins to geo-political risks and forex fluctuations. The high lease costs, as well as rising overheads related to a growing delivery model, also impacts the cost structure,\u201d Banerjee added.<\/p><p>ICRA said that the operating margin in FY2023 and FY2024 is, therefore, expected to be flattish despite the benefits of scale economies and it is likely to remain in the range of 20-22% compared to 20% in FY2022. However, the coverage metrics are expected to improve in the near-to-medium term, given the limited borrowing levels anticipated for the store expansion and a favourable demand scenario.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1d80c2c4 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1d80c2c4\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2bfcc2ea\" data-id=\"2bfcc2ea\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-693c505c elementor-widget elementor-widget-heading\" data-id=\"693c505c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Stock To Watch <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-419793a9 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"419793a9\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-517e3d44\" data-id=\"517e3d44\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2c317ce4 elementor-widget elementor-widget-text-editor\" data-id=\"2c317ce4\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Companies to watch out for in this industry are as follows: Jubilant Foodworks, Devyani International, Westlife Foodworld, Sapphire Foods India, and Restaurant Brands Asia<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-746efc76 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"746efc76\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-77a9c89d\" data-id=\"77a9c89d\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-d66eaa6 elementor-align-center elementor-widget elementor-widget-button\" data-id=\"d66eaa6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/ekyc.flattrade.in\/openaccount\/?utm_source=Blog&#038;utm_medium=organic&#038;utm_campaign=Demat+Account\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Open a Free 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FY2024&hellip;","protected":false},"author":5,"featured_media":29435,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"csco_display_header_overlay":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"csco_post_video_bg_volume":false,"footnotes":""},"categories":[65],"tags":[100,46,43,95,767,766,78,139,48,26,692,144,769,99,693,97,763,764,77,47,24,23,84,21],"class_list":{"0":"post-29433","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-industry","8":"tag-kfc","9":"tag-market-news","10":"tag-market-update","11":"tag-markets","12":"tag-mc-donalds","13":"tag-mcd","14":"tag-nifty","15":"tag-nifty-futures","16":"tag-nifty-today","17":"tag-nse","18":"tag-opening-bell","19":"tag-options","20":"tag-pizza","21":"tag-pizza-hut","22":"tag-pre-market","23":"tag-qsr","24":"tag-quick-service-restaurants","25":"tag-restaurants","26":"tag-sensex","27":"tag-sensex-today","28":"tag-share-market","29":"tag-stock-market","30":"tag-stocks","31":"tag-trading-account","32":"cs-entry","33":"cs-video-wrap"},"yoast_head":"<!-- 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