Ladies and gentlemen, good day and welcome to the Westlife Foodworld Limited Q4 FY24 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. We would like to remind you that certain statements made by the management in today's call may be forward-looking statements. These forward-looking statements reflect management's best judgment and analysis as of today. The actual results may differ materially from current expectations based on a number of factors affecting the business. Please refer to the Safe Harbor disclosure in the earnings presentation. I now hand the conference over to Mr. Chintan Jajal. Thank you, and over to you, sir. Thanks. Welcome, everyone, and thank you for joining us on Westlife Foodworld Earnings Conference Call for the Q4 and Full Year Ending 31st March 2024. I am Chintan Jajal, lead IR at Westlife. From the management team, I have with me Mr. Amit Jatia, Chairperson; Ms. Smita Jatia, Vice Chairperson; Mr. Saurabh Kalra, Managing Director; Mr. Akshay Jatia, Executive Director; and Mr. Hrushit Shah, Chief Financial Officer. We will kick off today's conversation with Akshay sharing his thoughts on overall business progress and outlook. This will be followed by Saurabh taking us through operational, financial, and strategic highlights. Post that, we can open the forum for questions and answers. We will be referring to the earnings presentation and financial releases available on the BSE, NSE, and investors page of our website. With that, I now request Akshay to commence this session. Thank you, and over to you, Akshay. Thank you. Good evening, everyone. I extend a warm welcome to all of you, and thank you for joining us today as we review the annual performance of Westlife Foodworld for the fiscal year 2024. Despite a backdrop of significant macroeconomic challenges, including inflation and subdued consumer spending, our company has shown remarkable resilience and adaptability. The past fiscal year was challenging, but it also highlighted the strength and strategic acumen of our team. While the last quarter was softer due to external pressures, we continued to push forward. We remained steadfast in our mission and successfully opened 41 new stores. This expansion not only underscores our commitment to growth but also enhances our market presence, ensuring that we are well-positioned for the future. Our effective consumer engagement strategies and our ability to align with changing consumer preferences are reflected in the increase of guest counts. The surge in our optimized business segments, particularly delivery and drive-thru services, stood out, propelled by our relentless focus on digital innovation and operational excellence. These efforts have ensured that we not only meet but exceed our customers' expectations regarding service and convenience. As we adapt to the changing landscape, we are not merely reacting to challenges but proactively shaping our future. Our long-term Vision 2027 remains firmly intact. We are refining our operational efficiency and continuously focusing on improving our financial performance to address operating leverage. Turning to our leadership team, I would like to take a moment to acknowledge the contribution of our CFO, Mr. Saurabh Bhudolia, who is moving on to pursue new opportunities. We thank him for his contributions, and we wish him the very best in his future endeavors. Stepping into this role, we welcome Mr. Hrushit Shah, who brings extensive experience from his previous roles. I'm certain that his expertise in strategic planning and financial analysis will be invaluable as we continue to grow and innovate. Looking ahead to FY25, we plan to further accelerate our expansion with even more store openings than this year. This commitment reflects our confidence in the strength of our company and the opportunities that lie ahead. In conclusion, as we move forward, Westlife Foodworld's focus will remain on delivering long-term value through continuous innovation, strategic growth, and steadfast commitment to excellence. Thank you once again for your trust and commitment to our journey. I will now pass it on to Saurabh to share the operational and financial specifics of the past quarter. Thank you, Akshay. Ladies and gentlemen, good evening. Thank you for joining us to discuss our Q4 and Full Year Results. Allow me to begin by reflecting on the business environment. After several consecutive quarters of decline, our out-of-home consumption trends in Q4 remained relatively stable on a sequential basis. However, on a year-to-year basis, eating-out frequency continues to be lower. Having said that, I believe that easing pressures on consumer wallets due to improving macros and moderating retail inflation will positively impact discretionary consumption, and we anticipate progressive improvement in coming quarters. Furthermore, I am pleased to highlight that our comparable guest count growth for the full year of FY2024 was positive, indicating an increase in market share across all our geographies. Now turning to our performance in quarter four, our top line grew by 1% year-over-year, same-store sales at -5%, progressed sequentially despite multiple external challenges in our key markets. Strategic communication and tactical menu intervention are helping us tackle external issues. I take immense pride in the way our entire organization proactively addressed and dispelled misinformation, limiting any further impact to the business or the brand. Personally, I would also like to thank you all for standing by us in the wake of multiple external challenges which were beyond our control. Based on the faith you have reposed on us, we are taking active steps to augment our trust-building efforts both in the communities and on the ingredient side. While our value platform continues to drive incremental footfall and setting us up for the Vision 2027 objectives, during the quarter we also collaborated with Lotus Biscoff for a limited-time dessert and frappe offering, which has been very well received by our customers. Over the last two years, we have harnessed the power of digital technology to enhance customer engagement and frequency. Our aggressive investment in user interface and backend improvements across platforms like McDonald's app, self-ordering kiosk, or the MyMcDonald's Rewards app have started to deliver great results and exceptional customer experiences. As a result, digital sales contribution grew by a massive 15 percentage points to 70% in the last two years, surpassing our Vision 2027 target of 65%-70%. As we are able to identify the majority of our customers, we are in the bargain building a solid platform to deliver personalized and consistent experiences to our customers. Moving on to business challenges, our optimized business grew by 8% year-over-year, contributing 43% to overall sales. On-premise business declined by 2%. Our average sales per store on a trailing 12-month basis was at INR 63 million. For the full year ending March 2024, sales grew by 5% year-over-year. Same-store sales decline was limited to -1.5% on a base of 36% of growth last year, despite external challenges. Optimized contribution was broadly stable at 41% compared to FY 2023. Profitability during the quarter was muted, largely on account of unfavorable operating leverage arising from the sales de-leverage and the nascency of new stores. Gross margin in Q4 was broadly stable on a sequential basis. Restaurant operating margins and operating EBITDA margins were lower by 510 basis points year-over-year and 280 basis points year-over-year, respectively. Other operating expenses were higher on account of increased marketing spend and utility. Depreciation was higher due to the new stores, but it is likely to normalize at a 7.5%-8% of sales in the coming quarters. Over the past year, we have really pushed the pedal across cost optimization projects, unlocking over INR 40 crores' worth of incremental cost savings across various P&L line items like food, distribution, utilities, crew, etc. For example, gross margin for the year improved by around 40 basis points despite us doing the value platform play. Similarly, cost lines like maintenance, operating supplies, etc. have seen year-over-year decline. All this work resulted in improved like-to-like contribution margins and lower sales break-even points, which will support our accelerated pace of network expansion. On the network expansion bit, we added 17 new restaurants in quarter four. We closed the year with a record-breaking store addition of 41 restaurants, taking the total to 397 restaurants across 64 cities as of March 2024. 91% of these restaurants have got McCafe. 84% of these restaurants are modern and Experience of the Future enabled stores, and 20% are drive-thrus. Despite the challenging operating environment, our network expansion plan remains unchanged. We will add 45-50 restaurants in FY25 as we remain highly optimistic about the long-term structural opportunity. To conclude, I think it's quite evident that it has been a challenging year for the entire industry as well as larger discretionary consumption space. We also had multiple external challenges to prioritize and address in the last six months. Despite that, we have strengthened our market positioning by investing in growth and putting the customer at the center of decisions we make. We set up strong governance forums to manage risks and maximize profits. We fortified our teams with the best people, talent, and processes. We created and deployed new technologies which created efficiencies and enhanced digital experience. We augmented our value platform, leading to much higher affordability scores. We innovated our core menu to make it relevant for ever-evolving consumer use cases. And finally, we emphasized on brand trust through a remarkable campaign like Real Food, Real Good, Eat Equal, and Truly Indian. With all of this groundwork, our foundation has only become stronger. We're confident that as macro consumption picks up, we will deliver differentiated performance. We remain committed to 2027 targets. And thank you very much for your time. I now hand over the call to the moderator and open the forum for all your questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. An operator will take your name and announce your turn in the question queue. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, if you wish to ask questions, you may press star and one. Our first question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes. Hi. Thanks for the opportunity, and congratulations on opening 40 stores in FY 2024. Sir, what is the SSG in the cohort of stores, excluding the 30% network that has been impacted due to the negative Israel sentiment? Last quarter, this number was -3%. It would be helpful if you can call out this number for Q4. So I would give you a ballpark number that we were trending a little positively on the stores which were impacted by community. However, we had additional impact of another challenge which we faced around cheese, in which we were slightly more impacted in the western region. So I can't really give you the breakup at this point in time. What I can tell you is the impact hasn't gone away completely. We have had marginal improvement on stores which were impacted by issues beyond our control. Saurabh, I was checking on stores which were not impacted. Last time around, it was -3% decline in those stores. Any qualitative comment on the cohort of stores that were not impacted will be helpful. If it's more than -3% or less than -3%, even that will be helpful. Yeah. There are a couple of markets which have not been impacted by anything. And out there, we see flat comps to marginal positive comps. But that's limited to a couple of markets because there were two challenges back to back on us, and that's why it's extensively difficult for us to remove. Like last time, we had given you a guidance that we might be impacted close to 400-500 basis points negative on the comp side of it, in which what you are telling is -3% was the number. The -4.5% has come down marginally, but that impact still remains. Got it. Got it. Got it. And Saurabh, second question, I wanted to check on Drive-Thru stores. The proportion for this cohort of stores has been increasing in our new store addition mix. I wanted to check if you could help us explain the differential between payback for a Drive-Thru store versus a normal store, or maybe the difference in value generated by a Drive-Thru store over its lifetime compared to other store formats. So any qualitative thing here will be helpful. Let me answer you this question in two different ways. One is if you look at our stores which are really very well matured. All of you know the example of Kalamboli, which has been a drive-thru for the longest time we have had before. That was our first drive-thru. So you see there is always a drive-thru queue. For us, it was also about an opportunity which is right there in the market which has not been capitalized on. And McDonald's globally does a fantastic job on drive-thru. So right now, what we are focusing on is to be able to build drive-thrus. What we have seen is drive-thrus, after four to five years, really, really unlock a tremendous amount of returns in comparison to any other cohorts of stores. So we are committed to Drive-Thru, and we believe that when the use case emerges and we are able to go to 300, 400 cars a day, it would be a real, real differentiator in the marketplace, as we see in years to come. There is no immediate guidance as far as Drive-Thru for today's concern. We believe that, first of all, our task to be done, like in any business, is to be able to democratize more and more Drive-Thrus. So what you will see in the next couple of years is the number of stores we add as Drive-Thru will increase substantially as a percentage. And then we will start talking about Drive-Thru numbers, etc. For now, it's about a strategy which we are fully committed to, that 30%-35% store over a period of the next 5-6 years will become Drive-Thru restaurants. Got it. Last question from my end. Among channels, dining channel decline was higher at about 8% versus 3% last quarter. Anything to read here in terms of lower footfalls in the market versus the previous quarter? Anything you can help us understand? No. I would not read too much into anything right now because, like I said, there were a cohort of restaurants we had talked about it, around 70-80 restaurants which were impacted beyond our control in the last quarter. That has continued. Beyond that, there was a little bit of impact in the western region due to the challenges we faced because of cheese, etc. So I wouldn't read too much into it. I feel transient things which keep happening. Trust is always a long-term game as far as we, as a brand, is concerned. And we are committed to spending more on our brand trust, resourcing it more, spending more time, energy on building the brand trust back. Got it. Saurabh, thank you so much. I'll get back in the queue. Thanks for answering the question. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Yeah. Hi, team. Thanks for the opportunity. Just wanted to clarify one point. You said that the impact from the external issues is something that is still continuing. Would you be and you also had the cheese kind of concern. Could you help us understand, A, where we are as of now, and by when do you see these headwinds kind of normalizing or going out of the? So Avi, like Saurabh just said, we've seen marginal improvement. Building trust back is a long-term game. Obviously, the impact we had was beyond our control, and it escalated quite fast. What we have done, like he said, even in his commentary, is that we've done a very good job in spreading the right information within the communities, representing our brand in the way it truly stands, which is a truly Indian company and a truly Indian brand. And as a result, we are seeing headway over there. We've seen a marginal improvement. But because, obviously, the issue was larger than expected, we do anticipate a quarter or two more in terms of getting back to the growth trajectory that we've been talking about. At the GID structure, Avi, I would look at it as you've got to be able to see one, obviously, we know it's a transient impact. Second is what are the inputs which we are ready and committing? So if you look at it, the first campaign which we did was, "Yeah, India comes on me," and Truly Indian to dispel some of the myths which were going around for us as Westlife. And then when the cheese challenge came through, we have come out very, very strongly with Real Food, Real Good. In fact, we have collaborated now with Sanjeev Kapoor, and you guys would have already seen what we are doing in terms of, "Yeh Hai Mera McDonald's" in which we are talking about Real Food, Real Good, real ingredients, etc., etc., so that all these issues and sometimes these issues are also opportunities for us to strengthen our brand image, etc. We are fully committed. We are spending more on brand building right now than we ever have in order to make sure we come out of it stronger. That's why the confidence around being able to bounce back for Vision 2027. Now, what will happen this quarter, next quarter? Honestly, we are putting all in all our efforts. The inputs are all in there. What it will be, it's all conjecture at this point in time. We would like it to go away ASAP. We do see at least the next quarter or two will be softer in regards to these two issues as far as these two issues are concerned. Got it. Very clear on this. The second question I had was on margins. Now, it was heartening to see you have reiterated the focus on getting to that 18%-20% kind of level. Could you give us a sense on is this likely to be a little back-ended because near-term could have some pressures? And maybe even in the near term, is it likely to go second up? Just some sense on how do you see this number? How are you internally framing it in your thought process would be useful to understand. So Avi, like you know, our target is 15%-18% pre-Ind AS margin, which means an 18%-20% post-Ind AS margin in terms of profitability. Obviously, this quarter, we've seen an impact, one, due to some operating deleverage that's set in because of the decrease in volumes. And number two, despite this tough macro environment, we've continued to invest into, number one, building the brand. Like Saurabh said, the inputs are extremely strong. And number two, opening new stores. We've opened a record number of stores in this financial year despite the second half being challenging. So the endeavor is to get back to this margin profile that I spoke about in the beginning. We even spoke about a cost improvement program that we ran internally that has removed significant costs from the system. So our main focus is bringing volumes back. That's what we're here for in the long term as well. And as we see that coming back, the margin profile we shared is exactly what our target is. And we don't see a challenge over there. In fact, this is an opportunity for us to remove costs from the system, to double down on our strengths by building brand trust. And we feel that we can come out even stronger as we tide through this time. Okay, Akshay. So just to clarify, the reason why I asked is we are blocking this year is probably and I look at it more from an annual basis. We've probably done, what, 15, 15.5% in this year. And that's on a reported basis. And the trajectory is 300-500 basis points expansion. So which is why I was just trying to understand how do you think given there are too many things happening, and it's not something which we can anticipate, obviously, it's external. Yeah. So what I was trying to say, right, if you saw the first half of last year and the year before that, when volumes were where they needed to reach, our margin was, in fact, almost 18%, right? So our entire focus is on bringing volumes back. As you see that coming in, profitability just follows. That's the beauty of our business model. And that's why that's our main focus. And we're talking more about that because we're already doing what's required from a profitability point of view. So as we see it come back, we may even emerge stronger than we anticipate, which is why I don't want to give any set timelines or tell you exactly when that will come in. I think you should monitor the volumes and look at our SSG trajectory and kind of build that out. Avi, in my commentary also, I just mentioned that we have improved our break-even points. So that should give you a lot of comfort that because of the work which we have done around cost, we've improved our break-even point. That's first and foremost. Now, on the temporary basis, like I said, there might be higher marketing costs, etc., etc., to build the brand back. But we are in a better space than what we were one year back. If the volume is exactly same as one year back, our profitability will be more than what it was one year back. So it is about now getting back to our volumes. And you will see there won't be any issue as far as the profitability is concerned because at the unit level, the break-even has improved if I was to remove all exceptions. Yeah? Got it. Got it. Got it. I have a couple of more questions. I'll come back in with you for that. But I got this. It's basically the break-even time is coming. Thank you. Thank you. The next question is from the line of Dhiraj Mistry from Antique. Please go ahead. Yeah. Hi. Good, Amit. Good evening, sir. So my first question on SSG guidance, right, looking at the external event which has been getting prolonged beyond our expectation, what kind of SSG guidance you would like to give in near term for FY25 and over the medium to long-term basis? So Dhiraj, like we've maintained in our Vision 2027 document, we give SSG guidance for the vision that we've set, which is high single digits, taking us to INR 4,000-INR 4,500 crores of sales. And that's what we will maintain. Like Saurabh said, these are transient, cyclical kind of events that impact the retail environment. And you're seeing that play out right now. We will get back to where we were right before this, which was allowing us to move towards this vision that we had set. So rather than giving any guidance for the coming year, we're sticking to the guidance that we've given for Vision 2027. And that will require us, obviously, in the coming years to deliver a higher SSSG than where we're at right now. Got it. Second question on store addition, you have mentioned that you would be looking for more addition in the South market and in the smaller cities. What is stopping us from expanding? Why there is a skew towards South India versus West India? So Dhiraj, I'll ask Saurabh also to add on. But as we mentioned in our Vision 2027 document, right, we have a huge opportunity in front of us in terms of adding stores. And that's why we bumped up our guidance next year to 45-50 stores. The south is a market that's a little more underpenetrated and a market that we're starting to kind of win in terms of market leadership, whether it's through our meal proposition, our chicken proposition, or our store format proposition. So south is an area where we can penetrate fast and with the business model that we have and position that we have. We're confident that we can bring in both the volumes as well as the returns. Secondly, with drive-throughs, right, that's another area of focus for our development strategy. It's what Saurabh also mentioned earlier on the call, a business model that allows us to bring in large amounts of volume and hence large returns moving forward. So that's another area that we are committed to in terms of our development journey. So taking both of them together, I think the South is an area of focus, number one, because it's underpenetrated. We have a stronger value proposition than we did earlier. And thirdly, even from a real estate point of view, even the drive-through landscape over there is more feasible. So this is our approach moving forward. So Dhiraj, if you look at it, we have just now started giving a guidance of 45-50 restaurants. By no means are we saying we are going to reduce our store opening in West. What we're saying is the additional augmentation which we are doing will come out of large unpenetrated markets of South. However, we will continue to open in West as we have always done in the last 10 years. Okay. Got it. And just to continue on that, what would be the CAPEX guidance for this coming year? It would be similar. It would be to the range of around INR 200- 250 crores. Okay. Okay. Sir, last question, if I may, that how do you see that raw material price trending? Is there any what margin we have been building over medium to long-term basis, what kind of price increase we can expect on an annualized basis going forward? Yeah. So again, I will answer in two parts. One is if you look at it historically, we've always believed 3%-5% is a price increase we take every year. This year, we did take price increases but got negated by the value proposition which we had taken. Right now, the market is soft. So we are not taking any price increase as of now. But our guidance will always remain that we would like to take annual price increases as low as possible in order to cover up for the inflation which we get after all the work which we have done so that we pass the maximum value to the consumer. Got it. And current raw material trends remain stable? Yeah. So as you saw, even in Saurabh's commentary, we've done a great job in terms of removing costs from the system. So despite whatever may be happening from an inflation point of view through strategic sourcing as well as strong vendor partnerships, we've been able to shed cost from the system over there. So our food paper lineup is sequentially trending even better than before. Okay. Thank you. Thank you very much. Thank you. The next question is from the line of Palash Sawade from Nuvama Wealth. Please go ahead. Yeah. Thank you, sir, for the opportunity. Congratulations on the 40 store openings for the whole year. Sir, as you mentioned in your remark that the whole industry has been facing demand headwinds since last four or five quarters. When do you see those normalized SSG levels? In terms of store openings, would we be going slower in H1 in terms of store openings? So I think in terms of SSSG guidance, we've covered it multiple times already. We're focused on the inputs like Saurabh said. The volumes will follow. These are times where, in fact, we can strengthen our brand further. We're not too concerned. The ultimate goal is Vision 2027, which is high single digit SSSG over this four-year period. Secondly, in terms of new stores, we plan to evenly distribute our openings. That's our endeavor. You will see some movement here and there from a quarter-on-quarter point of view. But there's no, what do you call it? - direct initiative to backload the new store openings. Okay. So thank you for that. So my next question is on optimized growth, which is the growth has been 8% in the quarter. So do you see this trend continuing going forward, that optimized going better than the on-premise? So let me answer it in two different parts. As you know, most of the digital growth is more predictable. So offline channels are all around digital and hence more predictable. Things sometimes in so digital-led sale is already 70%. So we have got far more predictability on the 70% of the sale. Now, unfortunately, the remaining 30% happens to be dining. I wouldn't break it up as off-channel and on-premise and off-premise because there is a lot of work which we have done even on loyalty points, etc. And we are seeing frequency gain coming from there. However, we are still not 100% on digital. And hence, we have got 30% unidentified. Now, where this cohort is coming, our hypothesis is very clear that a lot of it is coming out of the falling trust for the brand as far as a couple of challenges which we have faced. We feel sequentially, over a period of time, this has to come back. Like your last question, I don't think we have ever grown in India in a straight line year- on- year. It's always been every five years we face some challenge or the other. Then we cover it up in the subsequent year. So these are all part of life. Immediate guidance for this quarter, next quarter, this year, I have no idea. But what's most important is I think we are very committed to the inputs required at this point in time. We have calibrated and we feel quite confident about the inputs which we are giving and hence a very strong belief in coming back on track for the Vision 2027. Sir, last question, if I may. Sir, you mentioned that there's a focus on value meal. So going forward, if the raw material prices remain stable, how do you see gross margins panning out? So could there be any pressure, or do you see any room for expansion there also? No. As far as we are concerned, we have always maintained and we have always you would have seen our track record. We've always improved Gross Margin. We do see continued work happening on Gross Margin. At least on the percentage side, you won't see a deterioration for sure. Yes. Thank you, sir. That's it from my side. Thank you for your answers. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have follow-up questions, you may rejoin the queue. The next question is from the line of Saurabh Kundan from Goldman Sachs. Please go ahead. Yeah. Hi. My My question is that in the 2-3 markets that you mentioned were unimpacted by either of the external issues, what was the SSSG trend month-over-month? Maybe if you could also share how it was coming into April. So Saurabh, we don't break out these numbers. I think Saurabh Kalra was just trying to share some flavor to the question that was asked in terms of how the brand is trending generally. And these were kind of green shoots that we were seeing even before the second challenge hit us. The whole idea is around the inputs, which is what we're focusing on, which is ensuring that we strengthen our brand trust, we continue to press down on our digital levers and grow our optimized business, and we continue to open new stores. So I think the idea is that by doing these three, we'll continue to increase penetration, build back the volumes, and you'll see SSSG come back to the levels that we need them to be at to deliver our Vision 2027. Sure. Sure. And my last question is on the cost side. Just wanted to understand, there's been an absolute reduction in corporate overheads, if I'm seeing the numbers right, quarter-over-quarter. What's the nature of that? Are these variable salaries? And also, I think the royalty as a percentage of sales is tracking lower than what you shared on the strategy there also. There are probably some benefits there. Will those continue in the next year? And what are these benefits exactly, if at all? As far as our royalties are concerned, if you look at it, for the Q4, it's 5.1%. We've already given a guidance which is there uploaded in our investor website. However, we had last time mentioned that we had gotten some one-time benefits which we had closed in the month of December. And last quarter, we had also given why this one-time had happened. So beyond that, as far as the other line items are concerned, like I've said earlier, I think we are on pace at all. A lot of it is due to average unit volume and excess spend on marketing and brand which we are doing right now. If I remove all the exceptions out, our breakevens are better. And as you will see the volumes coming back, you will see that flow-through also happening. Great. Thank you. Thank you. The next question is from the line of Harit Kapoor from Investec. Please go ahead. Yeah. Hi. Good evening. I just had two questions. One was on the value segment. I mean, FY24 has been a year where the share of the value meal went up for everybody. Competitive intensity was higher. I was just wondering, as you had exited quarter four and into quarter one of 2025, how do you see how do you see that share moving for the industry as a whole and for you as well? My question, obviously, is in the context of average checks and gross margins. Okay. Let me answer it in two parts. Value share increasing is a good thing because we have to provide value even at the highest possible burger level. As far as affordable menu is concerned, I think there are two, three parts to it. If you look at it, we are not going with a McAloo Tikki strategy of INR 20. Right now, we're talking about a meal strategy of INR 149, which we feel is a good price point for a single person's meal. And it's in line with what we used to have as spending on an average single person, right? So we don't see an average check drag coming through it. GM, through our cost, we have been able to manage. We will continue to you will continue to see that there is no percentage drag on the gross margin coming ahead in the quarters also. Got it. Got it. And the second part was on product innovation. I mean, over the last 4, 5 years, our product innovation has been kind of bedrock of the strategy. I was just wondering, in the context of the next two quarters, demand also being a bit just recovering now as well as some of the externalities just not yet fully recovered, whether some of these product innovation factors also get pushed into the second half of the year. Just wanted your sense on how that pipeline will go. Yeah. We keep on recalibrating. See, at the end of the day, there is always an annual plan with us. We're recalibrating the plan quarter on quarter depending on what the demands of the market and the consumers are. For example, last year, in the Q3 onwards, we decided that it was always long overdue that in the meal, at some point in time, we will have to go with affordable meal strategy. We felt Q3 was the right time, and we launched the meal proposition at that point in time. And since then, to that. If you look at product innovation, on the meal itself, this quarter, in April, May, June, we are coming with exciting, different, little limited-time offer on the McVeggie and McChicken, which is the McVeggie Fiesta and McChicken Fiesta. So we keep adding excitement on the things which are a strategic priority. Right now, the affordable INR 149 meal is a part of our strategic priority. So you will see the work happening on that. And you will not find us lacking behind as far as the innovation is concerned, even in the coming quarters. Got it. Wish you all the best, sir. Thank you. Thank you. The next question is from the line of Krishnan Sambamoorthy from Nirmal Bang Institutional Equities. Please go ahead. Hi. Congrats on a good set of numbers in this challenging environment. Two questions. One on the drive-throughs. Did I hear Saurabh say correctly that by 2027, the number of drive-throughs will be 30%-35%? Or is it to mean that 30%-35% of incremental store openings will be drive-throughs? Yeah. So that's what Saurabh was saying, that 30%-35% of our new store openings now will be drive-throughs. Okay. That seems to be substantially larger than what was earlier. What was the guidance earlier, which was about 20%-25%? I understand your global expertise as well as your execution strength here in India as well. Is it also to do with, say, escalating high street cost in places like Western India, which is also something that an earlier participant had asked? So if you look at it, the drive-through premise is far bigger premise than a high street premise required to operate the business. And if you look at it in the last quarter also, we haven't opened outside the city and highways only. We have opened in Nashik, Uttar Pradesh, bang in the middle of the city. So we are talking about drive-throughs not only as highway use cases but a use case for you to pick up in relatively suburban stores and be able to use the drive-through use case there. So for us, I don't think this is a compromise to not do high street, not do drive-through. To me, if we are able to get a drive-through anywhere, we would first try to do a drive-through. If we don't get a Drive-Thru, then we would go and say, "Can we open a street store here?" That's how at least we are thinking about the next phase of growth of stores. Yeah. So just adding on to that, as we even mentioned in our Vision 2027 session as well as document drive-throughs, have the ability to generate large volumes and hence even better returns. McDonald's, as a brand, has a strategic advantage because we know how to do drive-throughs, and no one does it better than us. So like Saurabh said, if we can put up a drive-through in the center of Mumbai also, we would. So the whole objective behind drive-throughs is to drive volumes as well as increase our strength in the brand as well as increase penetration. So because of the competitive advantage, it is a business model that we prefer. Like he said, it's a bigger premise. So it's not about rentals. Understood. Just for clarification, just also wanted a comment on the rental inflation in high street. Is it still significant currently? So rental inflation as a word, obviously, there is always rental inflation. But we've got to do the deal with the landlord, which works as a win-win for both. So for us, we work through each deal separately. Some deals might be high. Some deals might be low. Some deals might even be a low percentage of sales. So as a basket of it, we manage. I don't think there is huge rental inflation which is hitting us. In the new store, we have to make a decision of what will this store yield for the next 20, 25 years. And that's the decision we go by. And then over a period, we know it's a huge competitive advantage when you do a 25-year-old deal. After 10 years, the rentals look fantastic even on a fixed deal, which might look high today. We are taking a long-term view of looking at the property, saying, "What can we do in the next 25 years with the rental which we are starting with? Understood. My final question is on the loyalty program. What have been the key learnings here? And And what have been the areas where you've been proud of in your initiatives on this front so far? I'm quite impressed with the amount of people who are already using the app converting into loyalty members. Now, what loyalty gives you is the way it's designed for the first one year is after every four visits, you will be able to get something complimentary from McDonald's. Or you can burn it through your points which you get out of your four visits, which is exciting because it's value on top of high value which already McDonald's drives. We are very excited about the behaviors which we are seeing in the restaurant right now. But very clearly, we are working on the guidance from the global team because loyalty is a global program. For the first one year, we are accumulating data. This will become more and more exciting as more and more data starts to flow in and more and more customers enroll into loyalty. Our immediate goal is to have more and more people enroll into loyalty programs. Understood. Thanks a lot. Thank you. The next question is from the line of Manish Poddar from Invesco Asset Management. Please go ahead. Yeah. Hi. Thanks for taking our question. So just one question. Probably, can you highlight, in, let's say, for the full year, how our market shares would be in, let's say, this aggregator channel? I'm just trying to see the emergence of which are a lot of regional or local players emerging. Is that really having any dent on the entire revenue capability? See, we do not get the entire breakup. What we do get is I can tell you that we are one of the best retention brands available on the platform with a very, very high organic reach, which means we don't have to spend the amount of money which others have to in order to get the consumers on an aggregator channel. So we feel good about our relationship with the aggregator channels. We work with them to formalize a win-win situation where with both Swiggy and Zomato, we work on a quarterly plan. And then we do a quarterly review also with them to be able to say, "What else can we do?" But I think market share from a QSR standpoint, we have pretty much been stable to growing as far as the last year is concerned. Would it be right inference, let's say, if the entire if I look at the entire year, whatever revenue delivery which we've seen is largely because of, let's say, broader macros and this country issue which is in place and not really like the market share? Would that be right understand? Sorry. Your voice was breaking. We couldn't get what you said. I'm just trying to understand. Let's say, when I look at the full year 2024, the revenue delivery, it's largely led by an external environment which is macros and, let's say, the intercountry issue which is going across, not really led by any market share as per your internal data which you do tabulating across. Yeah. Yeah. Sorry. We got it now. So, like Saurabh mentioned, right, from an input point of view, we don't see any structural issues or challenges. We've doubled down on areas where we saw opportunities like value and brand trust. And we think that with all the inputs that we have in place, we're in a pretty strong position, whether it's on the growth side or the cost side. In fact, our break-evens have only gone down. So yes, as the environment starts improving on the macro side as well as these one or two challenges that we saw specifically start moving behind us as we believe the transient events, we will start benefiting substantially. And we're pretty optimistic that the Vision 2027 growth trajectory will be back on. Okay. Fair. Just one bit, if I missed it, did you call out raw material inflation? How is the raw material broader environment? Raw material inflation, we should be able to manage this year. We don't see a big problem on that side. Okay. Okay. Thank you so much. Thank you. The next question is from the line of Jay Doshi from Kotak. Please go ahead. Yes. Hi. Thanks for the opportunity. I have one question. It is not related to this quarter but generally. When you look at your delivery business, what percentage of your delivery sales today in a city like Mumbai is fulfilled by your own staff? And what percent goes through aggregator channels? We don't give breakup. But we have mentioned, for example, in a city like Mumbai, we will be very strong, almost equal to the 3PO players in a city like Mumbai. But we do not give breakups. Like I've always maintained, it's about McDelivery. McDelivery happens through our channel, through Swiggy, through Zomato, and hopefully, tomorrow onward, through Magicpin and ONDC. So hopefully, we'll continue to keep adding partners and growing the business. Understood, Saurabh. Would you be able to then give us at least some color from a profitability perspective? Is it significantly better when an order is fulfilled by you, serviced by you versus aggregator? Yeah. So I think this question had come last quarter also where we had maintained, see, both of them, both delivery and dining, are complementary business. One is higher fixed cost, lower contribution margin. Sorry. Sorry. Sorry. Delivery cost, delivery cost. Lower fixed cost, higher contribution margin, and vice versa, right? So if I look at it, both dining and dining has got high fixed cost sorry, low fixed cost with high contribution margin and vice versa. So we do not see a difference between delivery margins and dining margins on the absolute bottom line, right? So our job is to add a penny irrespective whether it comes from dining or delivery. And we would continue to talk about that. That's why there is an advantage of being an omnichannel brand. We would like to add more drive-throughs, more pickup, and such use case occasions so that we are able to add new channels and then continue to add sales, which will in turn get profitability. So, Jay asked, Saurabh said, right, it's all about volumes for us. And the beauty of our business model is not only from the real estate can we from the same real estate, can we do dining? We can do delivery. We can do drive-through. And these are the stores that generate large volumes. So any incremental sale beyond your traditional dining model is looked at as sale that wouldn't have been there otherwise and hence profitable. So that's our endeavor, which is to increase volumes. And on the larger P&L, it only starts adding to our profitability. Sorry. My question, thank you for that. My question was related to profitability when a delivery order is serviced through an aggregator channel versus when it is serviced through your own fulfilled by your team. Is there a big difference between the two? And in that case, are you consciously doing? There is not much difference between the two. And again, Jay, we'll go back to the point that all delivery sales are incremental for us, whether it's through our own channel or aggregators. And that's how we view it because aggregators are also partners. And our own delivery channel is also a channel that we're building very aggressively. So we look at both as incremental sales and thereby sorry, increasing volume of the restaurant and increasing profitability. Sure. Thank you so much. Good luck for FY25. Thank you. Thank you. The next question is from the line of Pritesh Chheda from Lucky Investments. Please go ahead. We have Vision 2027 with +4.5 + INR 4,300 crore sales, right? Yes. So on the other hand, when you put the 4 addition number and the SSSG number which you're giving out, the INR 4,300 crore or INR 4,500 crore number, if you look at separately, doesn't correlate if you put the math one way or the other. So what is your inherent assumption in this INR 4,300 crore in terms of store addition in three years and the SSSG? We've laid it down pretty simply in our Vision 2027 document. I would advise you to look at that. Otherwise, we can take this conversation offline if you want to go through the exact metrics because when we did that exercise, we had done this exact math, which was high single-digit SSSG, 600-odd stores, 580-630-odd stores by 2027, which will deliver us this INR 4,000 crore-INR 4,005 crore top line. If you have any additional questions in terms of understanding it, you can reach out to our Investor Relations who will help clarify. Okay. My second question is, between the two years, let's say 2023 and 2024, when it comes to the restaurant operating margin, is it fair to assume that 2023 would have a much higher SSG number influencing the 23% gross margin? Yes. Typically, what could be a normalized ROA margin because there's a lot of variations in the last three years? What can be a more normalized Restaurant Operating Margin? So while we'll not go today, maybe there is a call which you can do with our investor relation also later. But essentially, it's about break-even, and then it's about the operating leverage. I think as far as break-even and operating leverage is concerned, we are very proud of the fact that we have been able to maintain or reduce in the last one year. And before that, there was less than inflationary increases on our break-even points. Now, when that happens, the moment you get higher AUV, your leverage comes down. And that's why you see percentage. Unfortunately, we are a contribution margin business with a high fixed cost. So you will see these kind of variabilities happening. Part of life as far as running a restaurant business is concerned. Maybe with the Investor Relations, you can speak directly, and we can talk a little bit more in details about how the P&L pans out. Oh. Thank you, sir. Thank you. The next question is from the line of Vishal Punmiya from YES Securities. Please go ahead. Yeah. Hi, team. Thank you for the opportunity. Just one question. So the question is actually on the consumption at the value level. So we have done a decent job at the value portfolio. And I've seen that the other burger peer has also kind of introduced a couple of offers where in the dining channel, they've introduced 2 for INR 79. And in the delivery channel, they've introduced INR 139 combos. If you could share your feedback or your on-ground view on consumers, how they have responded, and is there any market share movement that we might have seen at that portfolio level? So like we have always maintained at Westlife, we always follow the customers and not necessarily competition because then it loses our ability to be the leaders in the market. What we believe is right now, as we look at the external environment, it's important to have sharp price points and entry-level price points which are strong but strong for what use case. For us, that use case was a lunch and a dinner occasion for which we have crafted a proposition where McVeggie and McChicken, which is relatively a big burger with French fries and a Coke at INR 149. We feel that's a good enough work to be done. As colleges open in July, August, September, June, and you will see a price point which will be attractive towards college goers. So it's not always we are not here trying to decimate what the competition is doing on a day-to-day basis. We follow our consumers, and we are comfortable with what we have done till now. That's why when Akshay also mentioned that we are happy with the inputs, we have tried to look at it from all aspects. And then we feel confident that as far as the meal strategy is concerned, we are at a good price point. You will continue to see activity around a price point which is more attractive to the customer after the research, etc., we do with them and won't be determined because somebody has done something. It gives good results for them, good for them. Understood. Understood. Just lastly on innovations, so you have highlighted a couple of innovations in terms of McSpicy and the dessert, Lotus Biscoff. I could see a couple of more innovations on ground in terms of Mexican wrap, the Korean menu. As mentioned last time, there was an introduction of croissant which I think has been taken back from the stores. Any feedback from that portfolio? Are we reworking that product? Are we talking to vendors in terms of making any changes, or was it kind of testing grounds? Maybe at a later stage, when the market is mature, we will reintroduce some of those products back. First of all, I would like to give you absolute compliments for following us in so much detail because we keep on doing these trials. Last time also, it was picked up that a 5-store trial on croissant was being picked up as a new product launch. We keep on doing these trials. For IPL, we felt that wrap could be a good occasion because it was evening time. It was only done as a part with the existing ingredient, as a part of our limited-time offering. Thank you very much for following us in so much detail. Overall, if I look at it, like I said, we always are following consumers and trying to create hypotheses and do trials in a manner which can be scaled tomorrow for tomorrow's growth. So in that spirit, the trials are done, and we then try to either improve the product or dump the idea. As far as McCafe food is concerned, the trial is still continued. We have extended it to a few more stores. Some products which had some improvement required have been replaced, etc., etc. So we are working through with the consumer feedback. You will continue seeing excitement both on McCafe site and on the other use case occasion. For example, like I said, the wraps were specifically for markets like Mumbai during IPL matches. So that's how targeted trial it was. Thank you for capturing it. Oh. Okay. Thank you. Thank you. All the best for the coming quarters. Thank you. Thank you. Thank you. So. Yes, sir. Go ahead. No, no. Go ahead. Go ahead. Yes. That was the last question for today, ladies and gentlemen. I would like to turn the conference over back to the management for closing comments. Great. Thank you. Thank you, everyone, for attending the call. I hope you were able to answer all the questions well. See you on the next one. Thank you. Thank you. On behalf of Westlife Foodworld Limited, that concludes the conference call. Thank you for joining us. You may now disconnect your lines.