Congratulations on a strong pickup in KFC. Manish, we have made multiple leadership announcements in the recent times. Maybe if you could highlight how these leadership changes across some of the key roles can help us in growth augmentation in the subsequent quarters would be helpful?

Thanks, Devanshu. So, when we drew the blueprint in terms of where we want to go as a company, we analysed and the skill sets that were missing. So that was one piece. And the other piece was this whole impending merger with Sapphire Foods, because if you put the two companies together, we are going to be almost a USD1 billion top line by the time we complete the merger. And hence, the exercise was to kind of evaluate what are the skill gaps, where is that we need to go and how is that we need to reach there. As part of the entire exercise, what we thought that we lacked was one strong technology leader and we have hired Neeraj Tiwari, who is going to be the CTO for the company going forward. We have already made this announcement as you know. We also identified that with our own brands coming in and with some of the other franchise brands where we are going to take the lead on marketing - and at the same time, as we have announced in the past that Pizza Hut marketing will come to us as part of the merger, we wanted to enhance our marketing o verall portfolio and hence, we have hired Sandeep Anand. So, Sandeep has joined us as Chief Marketing Officer and he will also be looking after Pizza Hut operations. Sandeep's background is a combination of QSR and technology. And therefore, all of the relevant experience will help us as we move forward in our journey. We have also made a couple of other announcements like Robinder, who is going to be leading our portfolio on the Costa side and some of the smaller brands that we have like New York Fries and Sanook Kitchen. We have also made an announcement for the COO today. I do not know whether you have seen that or not. So therefore, this gentleman also will be joining us in the next couple of weeks. He comes with a very strong background from FMCG and technology with companies like Unilever and Amazon. So with that, we are becoming a future forward organization and also transform ourselves from people practices point of view, we want to bring in lot more automation and technology -led operations transformation so that we are able to ride the next wave. So that has been the broad hypothesis in terms of the people changes that we are looking at.

Okay. So, if we have to summarize this , one is from a marketing perspective, right? And the other one is from maybe our own delivery capabilities as well as from a customer acquisition perspective. And thirdly, from a COO perspective, obviously, that will be from an on-ground sort of growth focus. Is that the right way to look at it, Manish?

Yes, absolutely. Because if you remember, we announced in the last call that we have kind of tied up with one of the leading I T companies as a technology partner. And therefore, we will be developing our own apps. We will be developing our entire technology stack. And therefore, we wanted to build that capability in -house as well because we will have to manage the technology as we go along within the company.

Secondly, Manish, the broader commentary that we have come across QSR players post Q4, the dine-in footfalls have definitely improved after a fairly long period of time. So I wanted to check if you could shar e your thought process on the sustainability of this trend, right? So what all company-specific initiatives have we taken and what is the confidence on sustainability of these trends?

See, Devanshu, as I mentioned in the past we need to give a reason to the consumer to come into the store, right. And for example, if you are able to give the same offering to a consumer inside the home with zero incentives to come to the store, nobody will walk into t he store. And therefore, that meant that you have to kind of reimagine the business from the point of view of what is your pricing in the two channels, what is the innovation and so on and so forth. So, we have done some experiments to treat the two channels as two different businesses, which is what again I have alluded in the past. And therefore, that is showing some results. It is just the start of the journey. We have to cover a lot of gaps from there, but we are encouraged with what we have done and th e response that we have seen from the consumers. So, therefore, it kind of reiterates our belief that , if you give a reason to the consumer to come into the store, they will come into the store. And that is how we are kind of now approaching the entire business.

So, at least for now, we can assume this trend will continue, right? Obviously, geopolitical tensions and other uncertainties remain, but so far, things look good, right?

See macro levels, Devanshu, none of us can control, right. And we have seen a number of macro issues over the last 3, 4 years. So, it started from COVID and since the time of COVID, there has been some event or the other which is regularly kind of coming along. So, I think the way we look at it, I mean, we have to accept this as a reality. And therefore, we continue to chug along in terms of whatever we need to do, whatever is under our control, do that to the best of your capability and carry the business along. Because remember that any of such geopolitical situations, they put more pressure on the small-scale players, which kind of helps us consolidate further.

The next question is from the line of Gaurav Jogani from JM Financial.

My question is with regards to the store openings. Basically, we have seen that there have been store closures across formats. So, is this a deliberate strategy wherein as a part of this exercise of reorganization, we are kind of chucking out the loss -making or the nonprofitable stores and then start on a cleaner slate for the next year? And if so, is there any change in the guidance for the store expansion?

So, Gaurav, on the guidance, first, as I said in my address that we are planning to open about 200 to 225 new stores duri ng the year, of which KFC will account for about 100 to 110, 120 kinds of store levels. At the same time, we have communicated in the past that for 2026, I am talking about calendar year 2026 here, we are not planning to add any net new stores for Pizza Hu t - the idea is to consolidate and realign the portfolio for Pizza Hut. So, therefore, the remainder addition up to 200 - 225 will come from Costa, Vaango, Biryani By Kilo and so on and so forth. Having said that, I know that you have seen negative numbers in Q4, which is primarily because we are resetting our strategy from a BD perspective in terms of better -quality stores and a better pipeline. That is the reason this quarter has negative store count. And the focus, as you said, is to kind of shut the loss-making stores, which are there in the portfolio and open better-quality stores. While let us say, our new strategy is kind of build the pipeline as per our new guidelines and what we have discussed internally, that is the reason the store count is looking negative. But again, as I said, for the entire year, you will be able to see 110 to 120 new KFC stores and with the overall store count of about 200 to 225 stores.

Manish, thanks for this. Just a follow up , you’ve also been highlighting that you’ll be undertaking a lot more tech-driven initiatives. So, would you be tinkering with the store size or making any changes to the capex per store? Do you see any changes on this front?

Not so much, Gaurav. As I said during the call where we announced the merger, we will be able to manage all the tech -related changes within our existing budgets, including whatever charges we pay to the Yum!. So therefore, that is how we have tailored ourselves in terms of the new investments also. And plus, given the current optionalities on AI and all of that, we will be able to use our current infrastructure better with the help of some overlaying AI technology, and that is what we are focusing on.

Sure. And just one last question from my end, Manish, regarding the KFC revival that you have seen. So, we have also seen the macroeconomic situation also kind of improving, plus we have also taken initiatives in terms of the interventions we have done. So, for the SSSG that you have reported , how much you would accord to the overall macro changes and how much would be your own initiative? And how sustainable is this going ahead?

See it is difficult to quantify factor by factor, as I have said in the past. But again, we feel confident that we will be able to sustain the initiatives that you have seen. If at all , in the quarter, almost 45 days have gone by, we have seen that we are able to maintain the current SSSG trends in line with the previous quarter. So therefore, that is encouraging. We are monitoring it. Obviously, it will take another couple of quarters by the time we are firmly able to say that the worst is behind us. And we are not too sure about the macroeconomic situation either. But as per the current trajectory, we think we will be able to maintain the SSSG trends that you have seen. Moderator The next question is from the line of Percy Panthaki from IIFL Securities.

Just wanted to understand the gross margin expansion on KFC, it is a pretty big number. What has really driven that?

See, Percy, there are many things that would go into the gross margin line. So, one is, whatever raw materials and packing materials that we buy, at the same time, how we handle the promotions and discounting structure and the multiple deals that we offer, what are the timings of the deals. So, it is a combination of all of that. The raw material and packing material environment have been favourable. And at the same time, we tweaked the deals in favo ur of the dine -in customers more where we were lacking initially, and that has helped us to kind of improve the gross margins a little bit and drive the customers in the stores to deliver the SSSG.

So, for the in -store, part of the business, you have reduced your promotions. Is that what you are saying?

No, I have reduced the promotions for the online format. It is the other way round.

Okay. Understood. Also, I just wanted to understand, in light of the fact that promotions have actually been reduced, what is really driving this SSSG? We h ave seen this across both Sapphire and yourselves. So, is it simply that after two to three years of negative SSSG, only the loyal customers are left, and they are now driving normal growth while whoever had to leave has already left? Or could you highlight two or three very specific actions that, in your opinion, have driven the SSSG for KFC?

So, Percy, as I mentioned to Devanshu, that end of the day, you need to give a reason to the consumers to come into the stores. And that is what we have increased the intensity which is where we were not kind of as active. Our entire focus used to be on the online format. And we have shifted the focus now more to dine -in and more to the dine-in customers. And therefore, we are tailoring the offers and the price points and the promotions to make sure that the dine-in customers are attracted, and that is what has predominantly helped us.

But at the same time, the reduction in the offline promotions, hasn’t that had a negative effect on that part of the business?

No, I am not saying that we have reduced the offline. I said we have reduced the online promotions.

Yes, yes. Online, the online promotion reduction.

I see, I see. Understood. Also, have you taken any menu price increases in KFC either in the past quarter or very recently?

There was a very small correction. So, on a portfolio basis, I would say it was maybe less than 0.5 percentage point. It was only to tweak some bits of mismatches, which were here and there. That is a continuous process.

And given the inflationary macro scenario that we are seeing, do you foresee any price increases in the near future?

If you can help me foresee the inflation in the near future, I will be able to tell you that.

The next question is from the line of Jignanshu Gor from Bernstein.

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?

Sure. Thanks, Jignanshu. So, let me answer your question on the KFC first. I think it is basically going down to the online and offline. So, if you see our past trends when we were losing SSSGs, we were losing more on dine-in versus the online channels. While, let us say, the SSSG was negative, in the sam e quarter, we had seen that the online channel was positive and the offline channel was negative. And that negativity was overlapping the positivity on the online channel. And that is what we have tried to reverse in the last quarter by focusing more on th e offline channel and so let us say, online SSSG has come down, but the offline has taken over more. And, again, it is basically, as I said, you need to give right reasons for the consumers to come into the stores, because it cannot happen that, let us say, for example, if a consumer is ordering at home and at times, they are able to get cheaper pricing sitting at home rather than coming into the store, where the expense is higher and at the same time, where the customer gets the convenience. So that is what we have started to monitor much more closely and we have taken steps that for any customer, the best deals will always be at the store level, and that is basically where you experience the brand at its best, not only from a freshness point of view, but also from a customer experience point of view. And we have seen that the customers have responded very positively to that and that is helping us. To your other sub-question in terms of the tickets versus the AOV, it is a combination of both. We have seen the tickets also grow, because what we have seen over a period of time that, there were a lot of new consumers who were coming in, but there were a lot of lapses also, which were happening. So, the new consumers were coming in, the old ones were lapsing out. So, we have tried to address through multiple ways in terms of how do we get back the consumers who have lapsed out, while we continue to recruit the new consumers. So, therefore, that strategy we have seen and has played out well in the current quarter. We need to ensure that we are able to run with it for the next few quarters to be able to call out that our strategy is working. So, the start has been good. Let us see how it shapes up. On Pizza Hut, to your other question, as I said, we have hired a new gentleman by the name of Sandeep. He is going to be focusing on Pizza Hut. He is basically a marketeer all through his career with a strong FMCG background, QSR background and technology background . So basically, we are going back to basics as far as Pizza Hut is concerned, in terms of identifying the gaps in the portfolio from a product standpoint, identifying the pricing layers that are missing in our portfolio, and reassessing quality on a de novo basis for Pizza Hut pizzas. And not just from one an gle, because with pizza, you typically have to evaluate the dough, cheese and toppings. So, we are trying to revisit all of those things. Internally, we have seen some good work, which is happening. And I think it will take maybe a couple of months by the time we actually launched that in the market. We are seeing how the technology is working. We are actually starting to retrain all of our store staff both from a product quality perspective, as well as the CX training. So, Pizza Hut is back to basics, so m aybe during the course of the year, as I said in my comments, that we will come back to you with the complete strategy in terms of how we are trying to approach various brands. Maybe we can fix an Analyst Day in the next couple of quarters, and we can take you guys through in detail on what our plans are and what is that we are trying to do brand by brand once the entire new management team or the leadership team is in place.

The next question is from the line of Naman Maheshwari from Shanghvi Family office.

Just one quick clarification. So, we mentioned about 225 new store additions. That is taking into account the merger scenario, or is it on standalone basis at DIL level?

It is on a standalone ba sis, but considering all our brands. So, therefore, that would include KFC, Costa, Vaango, Biryani By Kilo, all the brands put together.

Okay, and second clarification. In Mumbai, I think you started with this new KFCs stores around the m etros. Do you think that channel as a whole is giving us a very good visibility and showing encouraging trends?

See, Mumbai territory is with Sapphire, not with us. And, therefore, your specific question on Mumbai will have to be addressed by Sapphire. But in general, I have mentioned, I think probably a few quarters back, that we see a big momentum on the travel side, and that is the reason we were focusing on multiple brands. That was the reason we were focusing on opening food courts at the highways and the malls and the food courts and so on and so forth. So that is part of that overall strategy. We are bullish on the travel segment. But Mumbai question, you need to check with Sapphire.

The next question is a follow up from the line of Devanshu Bansal from Emkay Global.

Just a couple of book -keeping questions. This gas cost , is this a small 1.5 % - 2% of sales, or is it a sizable part of your portfolio, if you could just specify this?

So, I will not be able to give you the exact number, Devanshu, but it is a small cost. And at the same time, as a result of gas crisis, we have started evaluating electrical equipment across our portfolio. For example, in Biryani By Kilo, we have managed t o switch our equipment to electrical. At the same time, we are also exploring, if the equipment can work on both gas as well as electricity. So there are multiple initiatives, which we have taken, so that in future, we are able to mitigate the impact better.

Sure, and secondly, Biryani By Kilo , while we do not get the individual brand -wise profitability numbers, this India portio n, excluding KFC and Pizza Hut, has done well from a profitability perspective, right? So, is there anything you could highlight from a next-year perspective on how we should think about this particular brand?

So, Biryani By Kilo, as I said, we have managed to turn the brand around. As, you know, it was a loss-making brand. There is further potential because right now, we have basically brought the negative to positive, and we have to grow from a profitability perspective. At the same time, we started experimenting with the brand on an offline basis. So, we have opened a few express outlets in our food courts to see how the brand performs. Wherever we have opened , the stores have been profitable . So, therefore, we are very bullish on Biryani By Kilo, and it can do wonders once we are able to stabilize the performance.

Understood. One last from balance sheet perspective, Manish. There is some increase in debt, as well as some increase in intangible assets as well. So, anything to look into it? Or how should we read these two numbers in FY26?

So, it is predominantly Biryani By Kilo consolidation Devanshu, because the consideration that we paid, obviously, will go and sit predominantly on the intangible side. So, if you want the details, we can connect offline, and we’ll be able to share them with you then. But it is predominantly Biryani By Kilo that is reflected in the goodwill, along with the brands.

So that was only temporary, we raised some debt because there was some equity infusion required in Thailand . It has got already squared off by the second week of April.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to management for closing comments.

Thank you very much. We hope, we have been able to answer all your questions satisfactorily. Should you need any further clarifications , or would like to know more about the company, please feel free to contact our Investor Relations team. Thank you once again for your interest and support, and for taking the time out to join us on this call. Thank you very much, once again.

This is a transcription and may contain transcription errors. The transcript has been edited for clarity. The Company takes no responsibility for such errors, although an effort has been made to ensure a high level of accuracy.