Global brokerage CLSA has highlighted a challenging competitive landscape in India’s quick service restaurant (QSR) sector, particularly in high-frequency categories like pizzas and burgers.
In its latest report, CLSA has maintained an ‘Underperform’ rating on Jubilant Foodworks and Westlife Development, citing concerns over increasing competition and brand positioning struggles. Jubilant operates the Domino’s pizza chain in India, while Westlife manages McDonald’s outlets in the western and southern regions.
CLSA observes that McDonald’s continues to lose ground to local restaurants, while KFC and Burger King are gaining share, both in consumer preference and sales growth. The report notes that KFC’s chained foodservice market share is now on par with McDonald’s, signaling a shift in brand momentum.
In contrast, CLSA remains optimistic on Devyani International and Restaurant Brands Asia (RBA). Devyani operates KFC, Pizza Hut, and Costa Coffee, while RBA runs Burger King in India. Both brands have shown greater resilience and strategic expansion amid market shifts, according to the brokerage.
Overall, CLSA believes that rising input costs, changing consumer preferences, and tighter discretionary spending are creating a more competitive QSR landscape, where only agile and innovative players are likely to sustain momentum.
Disclaimer: The views are those of the brokerage and do not reflect the opinion of Business Upturn. Investors should consult certified professionals before making investment decisions.
