Synopsis: Indian Railways’ move to allow premium food brands at stations could boost Devyani International, Westlife Foodworld Ltd and Sapphire Foods by giving them access to massive daily footfall, enabling higher-margin expansion, stronger revenue diversification, and deeper urban penetration.
Indian Railways has introduced a new category in its catering policy called “Premium Brand Catering Outlets,” allowing popular global food brands such as McDonald’s, KFC, and Pizza Hut to set up outlets at railway stations nationwide. This move, part of a larger effort to redevelop over 1,200 stations under the Amrit Bharat Station Scheme, aims to elevate passenger amenities by offering branded, hygienic food choices comparable to airport experiences.
The outlets will be allotted through a transparent e-auction system for five-year licenses, ensuring competitive and fair access. These premium outlets are expected to significantly enhance the food options available at busy stations, which serve around 2.3 crore passengers daily, while boosting Indian Railways’ non-fare revenue.
Companies to Benefit
Companies like Devyani International Limited, Westlife Foodworld Ltd and Sapphire Foods India Limited, which operate the McDonald’s, KFC and Pizza Hut franchises in India, stand to benefit greatly from this policy shift.
The railway stations provide a lucrative avenue for these companies to expand their brand presence and revenue streams by tapping into the massive daily footfall at railway stations.
Operating premium outlets at these stations offers high-margin business opportunities beyond their existing presence in malls and standalone restaurants, helping diversify and strengthen their revenue base.
Additionally, access to urban transit hubs supports deeper market penetration, enhancing competitive positioning against local and emerging quick-service restaurant chains.
About Devyani International Ltd
Devyani International Ltd is one of India’s largest quick-service restaurant (QSR) operators and the master franchisee for popular brands like KFC, Pizza Hut, and Costa Coffee in India.
The company is currently delivering modest returns, with a ROCE of 6.42% and a very low ROE of 0.54%, indicating subdued efficiency in generating profits from its capital base.
With market capitalization of Rs. 17,969 cr, the shares of Devyani International Ltd are currently trading at Rs. 145.75 per share, from its previous close of Rs. 148.10 per share.
Devyani International posted a 12.7% YoY growth in revenue, rising to Rs. 1,377 crore in Q2 FY26. EBITDA, however, dipped around 2% to Rs. 192 crore. The company’s net loss widened significantly from Rs. –4.92 crore to Rs. –24.0 crore, reflecting a sharp deterioration in profitability. EPS also slipped from Rs. 0.00 to Rs. –0.18, indicating continued pressure on bottom-line performance.
About Sapphire Foods India Ltd
Sapphire Foods India Ltd is a major quick-service restaurant (QSR) operator and one of the largest franchisees of KFC, Pizza Hut, and Taco Bell in the Indian subcontinent. The company manages a wide and expanding restaurant network across India, Sri Lanka, and the Maldives.
The company is operating with relatively weak return metrics, reporting a ROCE of 5.76% and a ROE of 2.03%. Its debt-to-equity ratio of 0.99 indicates a moderately leveraged balance sheet.
With market capitalization of Rs. 8,486 cr, the shares of Sapphire Foods India Ltd are currently trading at Rs. 264 per share, from its previous close of Rs. 262 per share.
Sapphire Foods delivered about 6.6% YoY growth in revenue to Rs. 742 crore in Q2 FY26, but EBITDA declined around 8.9% to Rs. 102 crore. The company’s net loss deepened from Rs. –6.24 crore to Rs. –12.8 crore, indicating a significant widening of losses. EPS also deteriorated from Rs. –0.10 to Rs. –0.40, reflecting a sharp increase in loss per share.
Also read: Smallcap stock jumps 6% after receiving ₹19 crore order from Indian Railways
About Westlife Foodworld Ltd
Westlife Foodworld Ltd is the Indian master franchisee of McDonald’s, operating its quick-service restaurant outlets across India. The company focuses on providing consistent quality, modern dining experiences, and convenient services, including dine-in, takeaway, and delivery, while driving growth through expansion, digital initiatives, and customer engagement in the highly competitive fast-food sector.
With market capitalization of Rs. 8,740 cr, the shares of Westlife Foodworld Ltd are currently trading at Rs. 560 per share, from its previous close of Rs. 542.25 per share.
The company reported modest revenue growth of about 3.9% YoY to ₹642 crore in Q2 FY26. However, EBITDA declined around 11.6% to ₹67.2 crore. Net profit rose sharply to ₹27.7 crore from ₹0.36 crore last year, marking a massive increase of over 7,600%, while EPS surged to ₹1.78, reflecting a substantial improvement in profitability.
Written by Manideep Appana
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