Congratulations on the revival in KFC. I wanted to double-click on KFC and had a very quick question on Pizza Hut. I will pose both questions together, so you can answer them. On KFC, would you help us understand this SSSG that you have seen, what part of it is higher average order value (AOV), and higher incremental transactions? Which is a bigger share and what gives you the confidence of sustaining that irrespective of what happens in macro? And I think on Pizza Hut, the last time you mentioned that we will have a more detailed answer to what is the approach going to be to revive the brand. So, when should we expect to see that?
Questions across 18 calls
Jignanshu Gor
Bernstein
Devyani International Limited
I just had one question on KFC. First, a lot of the new promos that you are seeing or the menu items that you are seeing, this seem to be special initiatives for driving walk-ins because for example, Chana Burger, only a combination of two is available online, not individual , right? Masala rice, I can't find even in Hyderabad, etc. Our dine-in has reduced considerably, right, Year-on-Year. So how are you seeing your efforts in driving demand? Like what is your primary focus? Is it either demand? Is it dine-in demand? Or how are you optimizing for that?
But have you seen a trend there that your existing customers are preferring delivery and only new customers are predominantly dine -in. So, are you swimming against the tide in a way by trying to do that? So just want to get a sense of whether you see this shift towards delivery stabilizing at some point?
Manish, just one question. I think a lot of it has been discussed already. On KFC and Pizza Hut, I hear the argument and the logic behind the marketing investments or the promotional investments to bring transaction growth. So, 2 parts to this question. (a) For the current quarter in the Y-o-Y or sequential improvement in SSSG that we have seen, would you be able to share what kind of transaction growth have you seen in both these brands? (b) Do you have a particular ADS number in mind at which you will sort of start to taper these specific investments in growing transactions, if at all?
Okay. Great. Just a clarification. These promotions or campaigns were done across all stores/ cities? Or was it selected clusters for KFC and Pizza Hut?
Manish, one question on Pizza Hut. So, what do we think is our plan for reviving that brand? Because I think it seems to have stabilized at these ADS levels and they are not levels at which we can generate returns for us. So, what are our plans for that? And I think there was some conversation in your sister concern’s investor call also regarding this. So, would love to hear your perspective, please.
And the second question was on Thailand. So, any specific details we can share about what is the shape of the business there and what is your outlook for going forward there in terms of either growth or profitability?
Congratulations on improving performance trajectory. I wanted to double down on one question on Pizza Hut. You said that any further growth in terms of store network or investments in marketing will be dependent on performance. So , can you guide us what performance markers you are looking for to get convinced of a turnaround?
Okay. Is there any specific ADS number that you have in your mind or a brand contribution margin number?
Swiggy Limited
My question is on Food Delivery. So we've had phenomenal growth in Food Delivery. So one just clarification, all our new experiments on Food Delivery, whether it is Toing, 99, etc., they are all included in the financials for Food Delivery and both growth as well as margins. Is that fair?
Okay. Fair. All right. Going ahead, how do we think of interplay between Toing and Food Delivery, right? We've discussed why we needed different apps. I think that's fair. But even on Food Delivery, we have 99 store and other parts, which are creating a different brand identity or addressing a different customer profile, right? So how do we think of that? And are we seeing a shift of consumers from Swiggy to Toing?
My question is on Food Delivery. So we've had phenomenal growth in Food Delivery. So one just clarification, all our new experiments on Food Delivery, whether it is Toing, 99, etc., they are all included in the financials for Food Delivery and both growth as well as margins. Is that fair?
Okay. Fair. All right. Going ahead, how do we think of interplay between Toing and Food Delivery, right? We've discussed why we needed different apps. I think that's fair. But even on Food Delivery, we have 99 store and other parts, which are creating a different brand identity or addressing a different customer profile, right? So how do we think of that? And are we seeing a shift of consumers from Swiggy to Toing?
I wanted to check on the quick commerce business and the reiteration of the guidance for the contribution margin. So just wanted to check whether -- and you've talked about the competitive scenario changing a lot. So is this guidance sort of completely or largely dependent on what we do internally as a company? Or do you incorporate any change in competitive dynamics for this guidance to materialize?
That's very helpful, Amitesh. My second question is on the balance sheet. So I'm trying to understand two numbers. One is that the capex seems high, despite that we've not added a lot of stores. So that's one, how do I square that circle? And second is working capital infusion into the business also seems a little volatile. So how do we think of this number in the context of a 3P business model? So those two are my last questions. Thanks.
I wanted to check on the quick commerce business and the reiteration of the guidance for the contribution margin. So just wanted to check whether -- and you've talked about the competitive scenario changing a lot. So is this guidance sort of completely or largely dependent on what we do internally as a company? Or do you incorporate any change in competitive dynamics for this guidance to materialize?
That's very helpful, Amitesh. My second question is on the balance sheet. So I'm trying to understand two numbers. One is that the capex seems high, despite that we've not added a lot of stores. So that's one, how do I square that circle? And second is working capital infusion into the business also seems a little volatile. So how do we think of this number in the context of a 3P business model? So those two are my last questions. Thanks.
Aditya Birla Lifestyle Brands Limited
Hi. Thank you for the opportunity. Just a quick question on the P&L structure. So, I understand on a full year basis ‘25 versus ‘26, right? While we have grown, we have plowed back a lot of that growth into probably marketing or into COGS, right? Because both the gross margins is down and other expenses have increased materially. What would you say is the shape of these marketing money that we are putting in, right? So, how do we figure out the margin expansion opportunity from here? Like is it a variable expense going forward or do we think that it's a fixed expense?
So, I am looking at the overall expense line on the consol P&L and specifically other expenses which have grown much ahead of revenue growth and trying to understand what that line item might include and what of it is variable or fixed to figure out the margin expansion opportunity ahead.
ETERNAL LIMITED
Hi, thank you for the opportunity. I have two questions. One is, as a large part of our growth narrative from here on depends in some sense on either growing the non-grocery assortment and going outside of the metro cities. Two questions related to these. One, is it possible to give some quantitative understanding of how some of the non-metro cities are doing in terms of size of business per store? I understand the profitability margin metric, which was in the letter, but in terms of size, either revenue or order per day, what kind of ratio can we expect in metro versus tier 1 or a tier 2 town? That's question one. Let me ask the second one if there is any interdependence. The second is we see that inventory days seem to have gone up over the last few quarters after the transition as well, to 1P. What would be the driver for this and where would we feel comfortable, not from a working capital deployment, but just from a risk perspective, what would be comforting for us?
Okay, cool. Just then maybe a follow-up. If you look at the standalone business, my understanding is that specifically looking at ad spends, it includes basically food delivery plus District ad spends. Is that the right assumption?
Hi, congratulations to Albinder again on the position. I had one question on understanding the growth that you've seen in MTUs, especially on a per store basis. Our ad spends, when I look at the consol versus standalone numbers, we don't really seem to have spent a lot more on ads despite the competition, and so we seem to be getting a lot more organic users. What do you think is attributable to this, on a per store basis, continuing to get more users and not just AOVs?
But that should ideally then translate, and that's the second question actually, into higher frequency of orders per customer, right? But that seems to have gone down. Is there a replacement happening? That's the circle I wasn't able to square off, frankly.
Sapphire Foods India Limited
Congratulations to both the teams for successfully crossing this threshold. I had a couple of points I wanted to check. One is the overall transaction mentions a combination of share swap for most of the shareholders. And a specific sort of paid-up capital, which will be bought by a group company. Is there any more color that can be shared on the terms? Are they similar for share swap versus the onetime purchase of the group company? How will that transaction sort of work together? Is there s ome more color that can be shared here?
Understood. So if I were to rephrase for my understanding, it will be disclosed in due course when it is finalized. Is that the right approach? Is that the right conclusion?
Vishal Mega Mart Limited
Hi. Congratulations on a great set of numbers, GK and Amit. And thank you for taking my question. I wanted to just ask two questions. One is regarding what we call, what we are seeing as a quick commerce initiative. So, what is our strategic objective in launching this year? So, are we seeing a lot of demand for delivery of items and hence we launched it? Do we see it as a mechanism to get more customers? Is it a defensive approach to protect customers who might be shifting? So, what's the thought process behind it and how should we look at it? That's my first question?
This is very helpful, GK. Just a very small follow-up. So, our north star here is transactions and not margins, right? And hence, do we keep pricing sort of same across our store and online or is there a delta there?
Hi. Thank you for the opportunity. Hi, GK. Congratulations on a good set of numbers. I had two questions, one macro and one micro. So the macro question is, given we have a very spread out network in terms of Tier-1/2 and 3 , I wanted to understand, while you mentioned all the four regions are doing broadly similar, is there a difference in their demand environment , maybe especially for apparel that we are seeing, which is different in let's say the larger cities which are Tier-1 versus Tier-3. I think that's question one.
Okay. Alright. Then the second question is, over the last three years we have seen a reduction in the size of new stores which we are opening, right. As a result, the network average of stores has also reduced. So, how should we read this trend and think about it in the future?
Jubilant Foodworks Limited
Hi Sameer, congratulations, on the fantastic results for the stand-alone business. I wanted to check regarding Turkey and continuing with the previous conversation. How do we structurally think about that business and its margins? It has been volatile at least on a quarterly basis in the past few quarters. So do you think this is a sort of a stable view, which we can take forward at least on an annual basis? Or do you think it is still evolving?
Sameer, moving back to the India business and focusing on Domino's. I think we've had a fantastic performance on both online and now, on-premise. Do you see related to all the discussions which are happening by a lot of other players in the industry, any difference in growth and demand environment that you are seeing, let's say, in the larger cities or maybe the top-tier cities versus the smaller cities since I think you are one of the most spread across company with the deepest distribution. So is there any color that you can give us on the demand side that will be helpful.
Hi, Sameer. Congratulations on a strong quarter. I think I had one question on the gross margins. So, what has contributed to that? And do you expect improvement in gross margin as we go forward, either in the form of price increases or in terms of premiu mization of installed customers? So, how would you think about that?
Okay, fair. I think the second question was in a way similar to the previous one on Popeyes, right, that we had a medium-term target for 250. So, is it fair to say we are figuring out our product market fit there? Or do you think like what drivers are you looking for to determine that this is now a growth story versus still trying to find where is our positioning within the QSR space?
Aditya Birla Fashion and Retail Limited
I wanted to check regarding the margin profile for 3 of our largest businesses, which is Lifestyle, Pantaloons, and Ethnic. The margins are all close to 20% for this quarter. So how s hould we think about these going forward? Do we expect them -- is there any expansion possible? Or do you think we are broadly near the peak and we should maintain that?
Okay. That's extremely helpful. I think the second thing I wanted to check, and apologies if this has been covered earlier, is where do we see our strongest sort of growth if we were to aim for a double-digit growth in the Lifestyle, the ABLBL part of the business? How is the management thinking about that? Because it has been a little bit tepid in the last few years now.