In 2025, India’s Quick Service Restaurant (QSR) sector is facing significant challenges, leading to a weaker financial performance despite efforts to drive revenue growth. Major players like McDonald’s (Westlife Foodworld), Domino’s (Jubilant FoodWorks), and Pizza Hut (Sapphire Foods) are experiencing profit pressures due to a combination of economic factors, shifting consumer behaviours, and intensified competition.
Here are three QSR stocks that have reported a decline in their net profits in the latest quarter:
Jubilant FoodWorks Limited
With a market cap of Rs. 44,453.7 crores, the stock moved down by nearly 2 percent to Rs. 663.4 on BSE, during Thursday’s trading session. The company reported a revenue from operations of Rs. 2,103 crores in Q4 FY25, a fall of around 2.2 percent QoQ but a rise of ~34 percent YoY. Meanwhile, the net profit stood at Rs. 49 crores, representing a growth of nearly 14 percent QoQ but a decline of about 76 percent YoY.
The net profit of Jubilant Foodworks decreased by a CAGR of nearly 20 percent to Rs. 217 crores in FY25, as compared to Rs. 418 crores in FY22. The company is engaged in the wholesale and retail sales of food items through strong international and home-grown brands, addressing different food market segments across six countries – India, Turkey, Bangladesh, Sri Lanka, Azerbaijan and Georgia. International brands include Domino’s, Dunkin’ and Popeyes, while homegrown brands are Hong’s Kitchen and COFFY. Over the last 3 months, Jubilant FoodWorks has shut down three Dunkin’ outlets and two Hong’s Kitchen stores.
Competitive intensity remains high, while inflationary pressures continue to weigh on margins. The management has noted a muted demand environment, which is affecting margin expansion. Additionally, rising delivery costs and aggressive discounting strategies are further challenging profitability.
Westlife Foodworld Limited
With a market cap of Rs. 10,773.6 crores, the stock moved down by nearly 1 percent to Rs. 690.4 on BSE, during Thursday’s trading session. The company reported a revenue from operations of Rs. 603 crores in Q4 FY25, a fall of around 8 percent QoQ but a 7 percent YoY growth. Meanwhile, the net profit stood at Rs. 1.5 crores, representing a decline of nearly 78 percent QoQ but a 100 percent YoY growth.
The company operates QSRs in West and South India, managing a network of McDonald’s restaurants through its subsidiary, Hardcastle Restaurants Private Limited (HRPL). In Q4 FY25, WFL opened 18 new restaurants while shutting down one. The company is aiming to scale its network to 580–630 outlets by 2027. While growth remains positive, the operating environment continues to pose challenges, particularly due to the sluggish recovery in dine-in traffic.
A potential easing of retail inflation and supportive budgetary measures aimed at increasing disposable income could help drive consumption. Management anticipates gross margins to remain stable at around 70 percent in the near term, with continued focus on cost control and improving profitability.
Sapphire Foods India Limited
With a market cap of Rs. 10,248 crores, the stock moved down by nearly 1 percent to Rs. 318.9 on BSE, during Thursday’s trading session. The company reported a revenue from operations of Rs. 711.3 crores in Q4 FY25, a fall of around 6 percent QoQ but a rise of 13 percent YoY. Meanwhile, the net profit stood at Rs. 2 crores, representing a decline of nearly 84 percent QoQ and 1 percent YoY. The net profit of Sapphire Foods decreased by a CAGR of nearly 28 percent to Rs. 17 crores in FY25, as compared to Rs. 46 crores in FY22.
Sapphire Foods is principally engaged in the franchise business of KFC and Pizza Hut, and other branded restaurants. In FY24, the company added 129 restaurants, compared to 164 additions in FY23 and 91 in FY25, with no new stores opened in Q4 FY25. Additionally, restaurant sales declined in Q4 FY25 to ~Rs. 710 crores, down from Rs. 755 crores in Q3 FY25.
The key pressure point continues to be a decline in dine-in footfalls, while delivery is growing but at a slower pace than in previous years. The declining transactions have been partially controlled through value-driven campaigns, particularly for the KFC brand. However, both brands (KFC and Pizza Hut) are still seeing flat or negative SSSG (Same-Store Sales Growth), which is affecting profit margins. Pizza Hut’s performance has also been directly impacted by the inability to run mass media campaigns in areas with overlapping franchisees.
Management does not expect demand to pick up soon, with any improvement depending on factors like tax relief, lower inflation, and reduced competition. Offering more discounts and promotions, particularly at Pizza Hut, has further reduced gross margins.
Written by Shivani Singh
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