QSR Firms: Food Delivery Firms Thrive as QSRs Struggle with Margin Pressures, ET HospitalityWorld
Advt
Advt
Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis.
Download ETHospitalityWorld App Get Realtime updates
Save your favourite articles
The Quick Service Restaurants (QSRs) are facing pressure on margins due to factors like inflation, while the food delivery firms have seen improvement in their margins, according to a report. QSR firms have also slowed the pace of store expansion, the report from banking firm BNP Paribas said.Further, the report mentioned that now food aggregators such as Swiggy and Zomato have become larger over the last few years and provided reach to the restaurants smaller than QSR chains."This, we believe, has resulted in increased competition for the listed QSR companies. Over the last four years, margins of food delivery firms have increased, while QSR margins have remained under pressure," it said.Moreover, online food aggregators have launched their own dark kitchen brands , Bistro and Snacc, respectively, offering 10-15 minute food delivery through dedicated apps."This intensifies competition in the Indian QSR market , compelling existing players to innovate on speed, menu and delivery efficiency to maintain market share and remain profitable," it said.Amidst continued demand slowdown, QSR companies are refraining from taking any major price hike and focusing on value propositions for customers."Though discounts are now being customised to target specific customers, the pressure on margins remains due to lower ADS (average daily sales) and rising delivery mix," it said.Moreover, rapid store expansion, coupled with higher operating costs, has kept EBITDA margin expansion at bay."However, aggregators continue to improve their margins, even as margin pressure on QSR companies persists," it said.Though QSR firms have "incremental positives" such as reduction in income tax and lowering bank interests, which will help to trigger the demand, however, they "have been reluctant to raise prices due to weak demand"."Aggregate sales of Indian listed QSR chains increased by 10 per cent in FY25 vs 9 per cent in FY24. This was well below food delivery firms' gross order value (GOV) growth at 19 per cent in FY24 and 18 per cent in FY25," it said.QSR companies, such as Jubilant Foods, are facing raw material inflation, but due to weak demand, they have been reluctant to raise prices.However, " food delivery margins have improved sharply over FY22-25, indicating better pricing power," it added.In Q4FY25, the QSR companies continued their double-digit revenue growth momentum. Three of the top five listed QSR players delivered double-digit revenue growth, with Jubilant Foods leading at 19 per cent year-on-year."However, growth was still below the 13 per cent CAGR (compound annual growth rate) achieved over FY20-25. The companies attribute it to a tougher urban consumer demand environment and reduced outside food consumption, but expect it to rebound, led by income tax rate cuts and other government initiatives," it said. PTI
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
an hour ago
- Economic Times
Air India plane crash: At $120 million+, insurance claim to be costliest for Indian aviation
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The catastrophic crash of an Air India flight in Ahmedabad on Thursday is likely to trigger the costliest aviation insurance claim involving an Indian airline, with claims estimated to exceed $120 million, people familiar with the matter the estimated payout, the hull loss—the insured value of the aircraft— alone could be around $80 million, while passenger liability compensation could add between $30-50 total liability payout could be significantly higher, with one estimate pegging potential passenger-related claims at over $100 million, given the presence of several high-networth individuals AIG was the lead insurer and others including New India Assurance had written part of the policy. The aircraft was covered under a global reinsurance programme, placed in the London market, whereby most of the risk is ceded to international insurers like Tata AIG, New India Assurance, National Insurance, United India, Oriental and ICICI Lombard General have retained less than 10% of the risk, market participants said. State-owned reinsurer GIC Re has 5% on the reinsurance treaty and will see a claim of about $4.1 million, they said.'Today's incident… is expected to trigger claims under both the hull and liability sections due to the total loss of the aircraft and the fatalities. Such losses generally affect multiple reinsurers, as airline fleet policies are often placed on a facultative basis involving several participants. Since liability claims take time to quantify, it is currently difficult to assess the impact on future pricing," said Ramaswamy Narayanan, CMD of GIC Re.'This would be one of the biggestever claims involving an Indian airline,' said Sourav Biswas, aviation business head at Alliance Insurance Indian carriers have witnessed few major accidents. In 2010, a Boeing 737 operating from Dubai crashed on landing at Mangalore, killing 158. Another crash at Kozhikode in 2020 claimed 21 these two incidents led to insurance payouts of about $60–70 million, including hull and liability, insurance industry insiders said. A Tata AIG spokesperson said as the lead insurer for Air India, the company is closely monitoring the situation. Air India's liability limit is up to $1.5 billion, an inurance executive aware of the subject said. There could be around $250,000 per passenger potential liability for bodily injury or bodily injury leading to death, added the person who did not want to be named. The crash is likely to harden reinsurance rates across the board. Aviation insurance is a global pool, and any large loss in one part of the world impacts pricing everywhere.'This will affect renewals next year,' a senior reinsurance executive said.'Aviation rates may go up globally, and more so in markets like India where loss ratios have otherwise been benign.' Tata Group-owned Air India's aviation insurance policy is typically renewed on April 1 each year, with a panel of insurers led by global brokers in New India Assurance had traditionally led the placement for the national carrier, Tata AIG is understood to have taken over that role since the airline's privatisation. New India and other Indian insurers now hold supporting roles, industry executives said.
Time of India
an hour ago
- Time of India
Indian inventors set patent records
Bengaluru: Anil Agiwal, an alumnus of IIT Kharagpur, rose as one of India's prominent inventors, filing an impressive 2,010 patents in the country. This milestone was highlighted through a GreyB research study, a consultancy known for its expertise in innovation intelligence, which ranked him among the Top 50 Indian inventors driving patent filings in India. Agiwal's work centres on breakthroughs in cellular communication, notably in 4G, 5G, and 5G Advanced radio access technologies. Agiwal, associated with Samsung Research America, is noted not only for his 2,010 Indian patents but also for holding 471 US patents. His journey began with a campus placement at Samsung R&D Institute Bangalore following his graduation from IIT Kharagpur in 2002. GreyB's assessment considered patents published between 2016 and 2023 within each inventor's portfolio. Kapil Bhattad, an IIT Madras graduate who now serves as senior director of engineering at Qualcomm in Bangalore, holds 1,647 patents. He completed a BTech in electrical engineering from IIT Madras in 2002 and went on to receive a PhD from Texas A&M University. Jaidev Rajnikant Shroff, Chairman and Group CEO of UPL, and Vikram Rajnikant Shroff, a director in the company, ranked third and fourth with 1,195 and 998 patents, respectively. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo Venkateswarlu Jasti, chairman and managing director of Suven Life Sciences, took the fifth ranking with 788 patents. The GreyB listing aims to spotlight the notable achievements of Indian inventors by analysing the Top 50 in the country. Ajit Manocha, president and CEO of SEMI, a microelectronics industry group, said: "Semiconductor companies honour and reward employees for their patents, recognising this as the lifeblood of innovation. Employee inventors are typically rewarded with a combination of financial incentives and recognition. These may include cash bonuses, plaques, and public acknowledgment, often tied to milestones in the patent process, like application filing or patent issuance. Early in my career at AT&T Bell Labs, my patents helped me advance my career. I put a premium on rewarding my employees for their patents at every stop in my career." According to Satya Gupta, president of the VLSI Society of India, an increase in the number of patents often leads to a drop in quality. "Out of 1,000 patents filed globally, only 10 may be impactful. This is the story not just with Indian companies but also multinationals. They want to accumulate patents," he said. Gupta also highlighted that patents are generally registered to company names, not individual employees, due to standard intellectual property clauses in employment agreements that assign ownership of such creations to the employer. GreyB's findings showed that inventors and researchers working at Qualcomm, Microsoft, Apple, Google, and several Asian firms including Samsung, Huawei, Oppo, and Xiaomi, made the largest number of patent submissions in India. This underscores India's growing importance as a market for global technology firms. In 2025, 3,520 patents were approved from 9,000 applications. Indian inventors received over 1 lakh patents in 2024. IESA president Ashok Chandak noted that both Indian and global technology companies have started viewing intellectual property as a vital strategic resource. They use it to stand apart in the market, accrue economic benefits, create enduring business models, attract investors, raise company evaluations, and strengthen their positions in international negotiations. Follow more information on Air India plane crash in Ahmedabad here . Get real-time live updates on rescue operations and check full list of passengers onboard AI 171 .
Time of India
an hour ago
- Time of India
Orkla India files for IPO, no fresh issue
Representative image BENGALURU: Orkla India, formerly known as MTR Foods, filed its draft red herring prospectus (DRHP) with Sebi for an initial public offer (IPO) consisting entirely of an offer for sale of up to 2.2 crore equity shares. There is no fresh issue component in the proposed IPO. Its heritage brand, MTR Foods, spans 100 years of serving authentic Indian cuisine. According to the DRHP filed, the offering will consist of secondary share sales by the company's promoter and shareholders. The promoter entity, Orkla Asia-Pacific, will offload up to 2 crore shares, while existing shareholders Navas Meeran and Feroz Meeran will each sell up to 11.4 lakh shares. Orkla India was rebranded from MTR Foods following restructuring and internal mergers. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
