Macquarie raises QSR targets, names Devyani and Sapphire as preferred picks
Macquarie sees a recovery in Indian QSR demand and projects 20%+ FY26–29E EBITDA CAGR. It raised target prices for Devyani to Rs 190, Sapphire to Rs 300 and Westlife to Rs 730, while upgrading Jubilant to Neutral with limited upside.
What happened
Devyani International · Macquarie sees improving Indian QSR demand and upgraded targets across major franchise operators. Devyani and Sapphire are its preferred
Key facts
- 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
- Macquarie forecasts 20%+ FY26-29E EBITDA CAGR
Why this matters
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
- Quarterly same-store sales growth and transaction versus average-ticket contribution
- 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
- Any slowdown in franchise partner expansion or deterioration in new-store ramp-up performance
- 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.