India Consumer Sector Check – Relishing The QSR Buffet: Dolat Capital


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The Indian quick service restaurant segment has, over the years, emerged from the shadows to position itself as a staple consumption theme rather than discretionary.

The availability of long term risk capital and food delivery are, in our view, the biggest of the tailwinds that will help gain momentum along with-

  1. broadening of cuisine formats leading to more choices for the consumer and hence rising propensity to consume,

  2. post Covid re opening up of workspaces, tourism and leisure segments,

  3. rising urbanisation and expansion into the tier two/three/four territories.

Recent headwinds around the food inflation have raised concerns over growth and margin defense for the space. Inadequate price pass-on, consumer wallet shift towards other categories, low same-store-sales-growth, margin pressure and delayed expansion plans are the major concerns hovering around the sector – these are very similar to FY13-17, time when major disruption impacted multiples.

However, we found many dissimilarities versus similarities compared FY13-17 period while drawing parallels.

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