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Macquarie raises QSR targets, names Devyani and Sapphire as preferred picks

Our read

Devyani and Sapphire outperform if Indian QSR traffic recovery converts into operating leverage before competitive discounting erodes margin gains.

For operators

Macquarie’s call signals improving Indian QSR demand and margin potential, favoring operators with scale, strong brands and disciplined store expansion.

Watch

Quarterly same-store sales growth and transaction versus average-ticket contribution

The report,

Macquarie sees improving Indian QSR demand and upgraded targets across major franchise operators. Devyani and Sapphire are its preferred picks, supported by KFC and McDonald's momentum; Westlife remains positive, while Jubilant is upgraded to Neutral amid limited upside and Turkey-related volatility.

Newer report , , Financial Express : Macquarie sees Q2 QSR recovery, with Devyani offering up to 27% upside

Read next

  1. Devyani and Sapphire revise merger scheme to unite Yum! India franchise operations, , Financial Express
  2. India’s QSR chains lean on value meals and festive demand as Q1 recovery remains uneven, , Mint
  • wudhomes: +Rs 2.5 crore pre-seed
  • DealShare: -95% vs peak valuation

Reported figures

From the report. Source details below

Devyani target price Rs 190, raised from Rs 130; 27.5% implied upside from Rs 149
Sapphire target price Rs 300, raised from Rs 200; 20% implied upside from Rs 250
Westlife target price Rs 730, raised from Rs 520; about 25% implied upside from Rs 583
Jubilant target price Rs 520, raised from Rs 375; about 2.4% implied upside from Rs 508

Also in the report

  • Macquarie forecasts 20%+ FY26-29E EBITDA CAGR

Why it matters to operators and investors

The recovery thesis strengthens the strategic value of scalable QSR platforms, brand partnerships and expansion assets, with Devyani and Sapphire positioned as the sector’s preferred consolidators.

What to watch next

  • Restaurant-level margin trend, especially food inflation, wage costs and delivery commissions
  • Net new-store additions, store closures and payback-period commentary from Devyani, Sapphire and Westlife
  • Consumer discretionary indicators, urban footfall data and delivery-order growth
  • Competitive pricing actions from McDonald's, KFC, Pizza Hut, Domino's and local value-QSR formats
  • FY26-FY29 consensus EBITDA revisions relative to the projected 20%+ CAGR
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  • Any slowdown in franchise partner expansion or deterioration in new-store ramp-up performance

Likely next moves

Our read of what comes next — analysis, not reported by the source.

  • Devyani and Sapphire may accelerate store-opening pipelines, concentrating expansion in underpenetrated tier-2 and tier-3 catchments where payback periods remain attractive.
  • Management teams are likely to emphasize value platforms, menu innovation and digital ordering to convert improving traffic into repeat visits without excessive discounting.
  • Competitors may respond with promotions and faster expansion, increasing pressure on food costs, labor productivity and prime-location rentals.
  • Brokerage upgrades could broaden institutional interest in the QSR basket, increasing scrutiny of quarterly same-store sales growth, new-store maturity curves and restaurant-level EBITDA margins.

The counter-case

The case against this reading — not reported by the source.

The target increases rely on a sustained QSR demand recovery, margin normalization and aggressive store-led growth through FY29. Those assumptions could fail if value-conscious consumers remain weak, competition intensifies, discounting persists, food and labor inflation rises, or new stores deliver lower-than-expected sales productivity. A 20%+ EBITDA CAGR forecast also leaves limited room for execution misses, especially for franchise-heavy operators exposed to royalty, rental and brand-owner terms.

The source

Source Read the source at NDTV Profit Published

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