Westlife Development Ltd. said its operating margin may expand by 100-200 basis points year-on-year in the ongoing financial year on account of a better product mix.
“We have been able to improve Ebitda margin by 120 basis points a year for last three years,” said Amit Jatia, vice-chairman at the operator of McDonald's outlets in west and south India. “Even this year, the improvement will be primarily driven on product mix and focus on cost structure.”
The company bets on its offerings on online food ordering platforms and expanding its coffee portfolio (McCafe) to achieve margin expansion. “Our strategy is when you have a same-store-sales growth of 7 percent [a quarter], you keep cost growth to 2-3 percent, so the incremental growth directly flows into the bottom line,” Jatia said.
This comes at a time McDonald's global competitor Burger King is in the process to list its domestic unit. The burger chain plans to raise up to Rs 400 crore through the initial public offering and use proceeds to open new stores. The chain plans to expand from 202 outlets as of June to 325 restaurants, including sub-franchised stores, by the end of 2020, according to its IPO filings.
Shares of Westlife Development fell as much as 1 percent to Rs 345 each apiece. That compares with a flat Nifty 50 Index.
Watch | Westlife Development on markets that is expected to drive the company's 60-70 percent growth...
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