Ladies and gentlemen, good day, and welcome to the Westlife Foodworld Limited Q3 FY26 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 call, please signal an operator by pressing star, then zero on your touchtone 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 the 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, Saryu. Welcome, everyone, and thank you for joining us on Westlife Foodworld Earnings Conference Call for the third quarter ended 31st December 2025. I am Chintan Jajal, Head IR at Westlife. From the management team, I have with me Mr. Akshay Jatia, President and CEO, Mr. Saurabh Kalra, Managing Director, and Mr. Sharvil Doshi, Chief Financial Officer. We will commence today's discussion with Akshay presenting his perspectives on the company's overall business strategy, progress, and outlook. Subsequently, Saurabh will provide an overview of operational and financial highlights. Then we will open the forum for questions and answers. Throughout the session, we will refer to earnings presentation and financial releases, which are available on NSE, BSE, and Investors page of our website. With that, I now request Akshay to commence this session. Thank you, and over to you, Akshay. Great. Hello, and good evening, everyone. Thank you for joining us today. I hope you had the opportunity to review our Q3 results. This quarter, our efforts were firmly anchored in centering guest count momentum by sharpening our consumer proposition and consistently delivering a high-quality customer experience despite a challenging operating environment. Same-store sales growth in the quarter was negative at 3%. However, what is reassuring is that the underlying guest counts remain broadly stable on a year-on-year basis. We began to see encouraging traction in guest counts from November. As a result, both November and December delivered flat to positive comparable guest count growth at a system level, with the West continuing to outperform the southern markets. This positive momentum extended into January, where we reported positive same-store sales growth, supported by healthy mid-single-digit guest count growth. That said, these are still early days, and we would refrain from calling a sustained revival until we see a few more months of consistent momentum. Before getting into the detailed performance of the quarter, I would like to draw your attention to slide nine. One of the most pivotal shifts in our approach this year has been a sharper and more deliberate focus in driving guest counts through a winning consumer value proposition. We are now beginning to see early evidence of this strategy playing out. At the center of our approach, there is a clear and unwavering promise, accessible, everyday value, combined with the iconic McDonald's experience, delivered with absolute consistency and supported by strong economic discipline. The balance between value, experience, and scale is what gives McDonald's its enduring competitive advantage. This framework is built on five core pillars. First is value. McDonald's wins when value is predictable and trusted, not through sporadic discounting, but through everyday value that builds habits and reinforces our position as the default choice for consumers. Second is experience. Guests come to us for the food they know and love, delivered quickly and seamlessly. Speed, accuracy, and those familiar feel-good moments are critical in reducing friction and driving visit frequency. Third is relevance. We must remain culturally relevant and unmistakably modern while staying true to what makes McDonald's, McDonald's. This means being an everyday choice across occasions, generations, and platforms without compromising on our brand cores. Fourth is profitability. Guest count growth needs to be volume-led while remaining margin protected. Growth must be sustainable, driven by initiatives that scale across our system and leverage our operational strengths rather than unsustainable and aggressive discounting. Finally, it's all about consistency. This is non-negotiable. The same McDonald's experience in every restaurant, every day. Consistency is what converts trials into trust and trust into repeat visits at scale. When these five elements work together, they compound. The outcome is not just short-term traffic uplift, but sustained market leadership, powered by a consumer value proposition that is truly differentiated and uniquely McDonald's. We're also pleased to have Sharvil Doshi join us as our new CFO, bringing in strong financial leadership and discipline to our next phase of growth. With this, now, I will now hand it over to Saurabh to take you through the other highlights for this quarter. Thank you, Akshay. Good evening, everyone. During the quarter, one focus remained firmly on driving our guest count momentum, as Akshay spoke about, through consumer value proposition, while consistently delivering exceptional customer experiences across both the dine-in and delivery channels. This focus will continue as we move forward. I'm particularly pleased that we strengthened our value proposition without even diluting margins. I think we had talked about it even in the last call, that we were trialing out our value platform, and that seems to be giving us good results without diluting any margins. Our consolidated revenue for the quarter stood at INR 6.7 billion, reflecting our year-on-year growth of 2.6%. For the nine-month period, revenue grew 4.4% YoY. While the operating environment remains challenging, we are witnessing some early sign of improving guest counts, as Akshay highlighted earlier. The Everyday Value Meal priced at INR 99 was launched in West in December, and has seen very healthy momentum in dine-in footfalls. A key highlight of the quarter was the exceptional performance of our digital campaigns, which helped us achieve a record single-day guest count milestone on the McDonald's App. The Merry Meal introduced during Christmas period, generated significant amount of brand buzz across all major social platform and also in our restaurant, with merchandising selling out just in 6 days. Congratulations to the team on these strong wins, which continue to build the brand relevance and deepen consumer connection. From a channel perspective, our on-premise business grew 6% YoY, supported by a strong value platform, sharper digital engagement, and focus on hyperlocal marketing. Off-premises saw a slight decline, largely due to volatility in aggregators' numbers. That said, our McDelivery channel continued to grow strongly and is emerging as a robust growth engine, supported by a strong customer acquisition and a promise of seamless and reliable 20-minute delivery experience. Execution excellence continues to underpin our profitability. Like-for-like gross margin remained broadly stable on a sequential basis, driven by supply chain efficiencies, partly offset by menu price adjustment following GST rate change. There is an optical impact of approximately 400-500 basis points in gross margin this quarter, due to the regrouping of processing charges from other operating expenses to cost of goods. For a like-for-like comparison, please do refer to the gross margin note slide in our earnings deck. Restaurant operating margin improved 150 basis points year-on-year, while operating EBITDA margin improved 70 basis points year-on-year. These improvements were driven through internal cost optimization initiative, despite higher advertising and promotion spends and continued growth investment. Cash PAT for the quarter stood at INR 583 million, representing 8.7% of sales. Our digital ecosystem continued to be growth, a growth driver. Digital sales remained stable at approximately around 74%-75%, supported by loyalty program and increased engagement through our mobile app and self-ordering kiosk. Cumulative app downloads have reached nearly 50 million, with around 3.5 million monthly active users. We remain committed and disciplined and prudent on prudent network expansion. New store performance continues to improve, supported by better site selection and use of location intelligence tools, enabling a faster path to profitability and greater accuracy in predicted sales. We opened 10 new restaurants during this quarter, taking our total restaurant count to 458 across 73 cities. All eligible restaurants now feature McCafé and Experience of the Future formats, and 24% of our restaurant network offers drive-through facility. We remain on track to reach our 580-630 restaurants by 2027. In summary, Q3 marked meaningful progress in strengthening our guest count momentum and enhancing brand relevance, underpinned by disciplined and sustained profitability. Going ahead, we remain focused on the core fundamentals that differentiate McDonald's: winning consumer proposition, consistently superior consumer experience, and long-term margin discipline. Thank you for your time, and we are now happy to take any questions you might have. Sure. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Devanshu Bansal of Emkay Global Financial Services. Please go ahead. Hi, sir, thanks for the opportunity. My first question is on this differentiated merchandise-based marketing strategy. First socks and now people also, which is creating a lot of positive noise on social media. What has been the intent behind such campaigns and maybe initial lead through from a growth acceleration perspective? If there are any additional costs related to these merchandises and where you will keep adding in the P&L? Thank you, Devanshu. Obviously, it's a part of the larger framework, as Akshay spoke about, driving value experiences for our consumers are one of the most important parts and top two pillars to drive our guest count momentum in the near to mid-term. Given that was the context, then these are experiences which you would like to add, and this is something which is not only new to McDonald's, a lot of countries do this. So we have just used an adult's playbook to guide experiences for Gen Z kids and adults. So what in that format, I don't think there is cost additional attached to it, because we charge it as a wholesome combo when we are providing it, and all the, all of that is factored, when we are creating a proposition for our consumers. Fair enough. Fair enough. And, sort of, so our gross margin has stayed flat sequentially, and there are two things here, right? So there was this nearly 100 basis points of positive benefit that could have accrued from a GST perspective. And then, for, I guess, in December, you have launched these value promotions in in the busy season, and I could gather from your initial remarks. So how should we see from a full quarter perspective, I think from a Q4 expectation perspective, should we see some moderation in gross margin? Because the 100 basis impact that was there has been nullified by one month of value promotions. Any comment on that? I think we had commented on that last quarter itself, that we have passed on all the benefit which we are getting to the consumer. Because we had passed on every benefit, we also took this opportunity to simplify our operations business, and therefore you see reclassification of some of the gross margins. So we did not see any additional benefit coming out of that. However, we have not randomly launched INR 99. I think there is a lot of work which went, and we realized that it is not a worse or we will not take a margin hit when we do this INR 99, and we have rolled it out in a certain manner, so that it's accretive as far as the business is concerned. So it's been rolled out across all West and 2 and 3 select markets in South, and some trials are going in few cities in South too. So I don't think we have done anything, which is gonna have a negative impact on GP. Sure, fair enough. So, the GP level should sustain, right? Yeah, so got it. And, lastly, sir, digital has been a key focus for us as well, right? Along with value. But growth in optimized channels has been a bit soft. I understand that your own app is doing relatively better, but we are facing some challenges on the third party aggregator front. Such challenges though are not visible for other retailers that are reporting, right? So, anything that you can sort of highlight, which is impacting us more versus other players? So, just to add over there, I think, our digital sales continue to grow. We definitely have, you know, not as much growth as we would like on 3PO platforms for our brand, but we're working quite closely with them to figure out how to do this in a sustainable manner, because our approach is to do it in a partnership approach, which will allow us to grow in a sustainable manner. So that's continuing. But like you said, lastly, we are very focused on our own McDelivery platform as well, which will allow us to kind of stay very close to our loyal consumer base. And that has actually seen a lot of traction with a lot of the growth investments that we've done over the last six months. We've mentioned this before, but we've had significant uptick in December and January on our own platform, as we've connected better with our customers. It's being done through a multi-pronged strategy. So it's not only about, you know, marketing or discounting, it's about making sure that the customer gets value for money across the experience from buying to fulfillment. So I think that's how we're looking at digital sales, and we've seen healthy growth in our overall contribution of digital sales to the business. So I think we're quite pleased with where we are today, and things should only get better. Well, in this small bookkeeping question, Akshay. So, monthly active users and overall app downloads is a key metric here. You used to provide the growth rates in these metrics, but somehow we have avoided providing that. So if you could comment- We still provided. Devanshu, we still provided the monthly active users as well as cumulative app downloads, and definitely they are important metrics to track. But, you know, what I've said in terms of overall growth of the business should kind of supersede that, right? Because it's eventually about business growth. And we have seen very encouraging business growth on the app and our McDelivery platform over the months of December and January, as all of the work that we've been doing has come together. So you know, I would look at it in that way, and we'll keep sharing more color as we break down the numbers. If there is any specific query, I think you can write to Chintan, and he should be able to help you out with that. Sure. Thanks, Akshay, for taking my questions. Thank you. Next question is from Gaurav Jogani, from JM Financial. Please go ahead. Thank you for taking my question. My first question is with regards to the store opening. So if we look at the store opening during this quarter, it was a bit lower, you know, versus last year or maybe the target number for the year now seems a bit higher for Q4. So is there some bunching we can expect? Because we have kind of maintained the guidance for 2027. Yeah, we do foresee that we will open around 20-25 restaurants this quarter. We should be able to compensate for whatever was happening in October, November, December. Sure. Thanks. My next question is with regards to the growth investments, you know, that you have been doing for the own app as well as the store opening app as well. So are these expenses now done, and are these already reflecting in the Q3 and Q4, the other expenses line item? So, so some growth investments are always on, because we are always working on trying to do projects, et cetera, et cetera. Lastly, the two which we had called out last time are largely done. Some of the variable component might kick in, and we are starting to see results from January. Maybe next time we'll try to share a little bit more flavor on it. So I mean, despite that, you've seen a decent gross margin expansion, and despite the, you know, the negative leverage, so it's quite commendable to see that. So is there an inference, you know, that once the SSG starts to turn positive, we can see good expansion in the EBITDA margin from here on? Definitely, definitely. That's, that's the business model we operate. Okay, sure. And just lastly, on the growth of the delivery front, you know, so you did highlight to Devanshu earlier that, you know, your own apps are continuing to do well. But any sense you can give, you know, because the inference that comes is that there will be definitely decline on the 3PO apps for you in terms of the use. So, you know, very clearly what I can tell you is, we had deep red on one of the platforms, one of the other platform was okay. We are working with them to get the relationship right, and to be able to create a plan by jointly working on sustainability. And, we have been, we've been seeing gradual process, progress on both of them, and December, and December and January has seen significant amount of progress as far as the 3PO partnership et cetera is concerned. Now, obviously, there is a choice which all of us make, depending on the investment, whether it's profitable, not profitable, and what is everyone's score line. We made our choices, and, that's, that's also showing in some of the things which you see in terms of results. So we are re-evaluating it. We are always trying to make sure that we are not losing our competitive advantage in any of the platform. That's the endeavor. But we keep re-evaluating and we keep working with even the 3PO partners. So I think this was what happened in October, November, maybe in some bit was what happened because of lack of planning, et cetera, on our part jointly, and then some of it will recover back. Yeah, and I think, like we said, right, the delivery platform we feel has opportunity, and as we continue to work with our partners and grow our own app, you will see a growth in on-premise. So I think that's the way you should look at it. Off-premise, sorry. Sure. And just lastly, can I chip in one more? In terms of the growth trajectory, can you help us out, given the offline phase during Q3, how the growth has progressed for you? And the positive SSG, how confident. The growth trajectory, how month-on-month that has progressed for you, and if this January month positive SSG, how much do you feel is sustainable going ahead? See, we don't break down those numbers, right? And I mean, for last quarter, you have our overall numbers, so we don't really break down how every month grows. But what we have called out is we definitely saw good recovery in guest counts in November and December. And we've also called out what the numbers are looking like in January to give you all more flavor. Now, beyond that, unfortunately, we can't give, because that would be completely forward-looking. So I think that, you know, let's take this positively, because we are, you know, experiencing good momentum, and we're confident that that should play out over this quarter. So I think this is different to what we said in the past. But again, it's too early for us to say too much, and secondly, we can't really make any more forward-looking comments. Sure. Thank you for answering my questions. That's it. Thank you. Thank you. The next question is from Rehan Syed from Trinetra Asset Management. Please go ahead. Yeah, good evening to you, and thanks for the opportunity. So my- Sorry, the voice is very muffled. Uh, hello? Yeah, now it's better. Yeah. Okay. So my first question is around your regional demand. So you have highlighted continued softness in the South, while the West showed healthy footfall growth. Sorry, we cannot hear you. Rehan, we are on a hands-free. Request you to use the handset. It has been pretty much better. Am I clear now? Sorry? Am I audible now? Yes, yes, go on. Yeah, yeah. So, as per you have highlighted regarding, softness in South, while the West showed healthy footfall growth, so is this divergence driven more by macro demand conditions or, competitive intensity and discounting? Or how should we think about regional recovery timeline? This is my first question. I think we had given a flavor and color of it last quarter, where we said South is a little underperforming for us. Like I just mentioned, last time also we had given a flavor that we are doing a lot of trials. I think the experimentation which we had done, even in OND, I think right now we are very clear on the playbook we want to play with. We've experimented with app, we've experimented with promotions, including merchandise. We have also experimented with value platform, and like I said, a couple of trials in South are still on. So when we look at this holistic bucket, we believe we have an answer to be able to grow guest counts both in dine-in and delivery across West and South. So that's what we are seeing in January, and that's what we do believe that we have the solution, a holistic solution which will help us grow across our geographies. Oh, yeah. Okay, I know. And my second question is around the restaurant operating margin, that we have seen that it's increased by 150 basis points year-over-year, quite higher A&P spend. So how much of this improvement is structural, cost efficiency versus temporary operating leverage? And what should we assume sustainable ROM by normal and medium term? See, if you look at it, I think the best way of looking at a holistic restaurant operating margin is year-on-year improvement. I think you should take a nine-month to nine-months view, last year versus this year, and be able to gauge of where are we heading. Because nine-month to nine-month remove all the exceptions which might be there. We've also, if you go to page number 6, we've pretty much given what how the breakup looks like, on, on the nine-month to nine-month margins. Okay. Good. Very well. Last one, just quick question that we have seen one exceptional cost normalization. So in quarter three, one-time gratuity is exceptional expenses have come. So post this adjustment, should we assume that profitability improve meaningfully or are there any other lower cost normalization that we have to look out for? Sorry, we couldn't hear the last question. Oh, yeah. Whatever I followed was, it was a question around one-time exception. Gratuity was- Yeah, gratuity, yeah. Apart from that, there was nothing. Gratuity was the only exception which we had on the P&L. Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. Should you have follow-up questions, we request you to rejoin the queue. The next question is from Amnish Aggarwal from Prabhudas Lilladher. Please go ahead. Yeah, hi. I have a couple of questions. My question pertains to the slide 13, where we have two heads, one is royalty and one is other operating expenses, and there is very sharp reduction in both of them. So any explanation on that could be useful. No. So actually, if you look at it, every year in—I mean, the month of December, we do get some amount of benefits, due to if there is any exception, in terms of, reward, et cetera, McDonald's gives in order to open a holistic number of stores, et cetera. So we continue to get that, and we accrue it in December. So every year you will see some amount of that, and then gratuity, like, like I said, has been mentioned as one-time exception. Otherwise, if you look at, normal nine-month to nine-month, yearly PNL, it is like for like for the course. Okay. And what about the other operating expenses? Because this quarter they have come off very sharply. That's the other operating expenses is the regrouping, which I talked about. So we have used this opportunity to simplify our life as far as the operating life is concerned, from an FP&D standpoint. So FP&D has gone down, and we have. We did provide, on, on another sheet. On gross margin, there is a note on page 15, slide 15, in which how, processing charges have gotten added, so there is no difference in actual and the gross margin. It's just regrouping and reclassifying. Okay, sure. My second question is regarding the demand environment, because you are indicating that post-November things have now started looking up. In terms of, say, overall scenario, put together the variations which are there in West and South. So how probable are we that in the current quarter we will end up with a positive SSG? So we, as I mentioned, cannot make forward-looking statements, but what we have done is definitely spoken about the momentum that we saw in December, as well as extending into January. So, we've spoken about guest count going significantly positive, and we are witnessing, same-store sales growth as positive as well. So I think we can't say more than that, but that itself indicates that there's very good momentum that's building and, you know, this is different to what we've seen in the past. So we're gonna continue to build on it. Thank you. The next question is from Jignanshu Gor from Bernstein. Please go ahead. Jignanshu Gor from Bernstein, please go ahead with your question. Yeah, hi. I hope I'm audible. My question is slightly maybe looking at last two quarters, not necessarily this itself. For the same stores where we have, where. If you keep out the new stores we've added, would you say the bill count or the footfall count that we are growing YOY to whatever extent, are we getting a lot of new customers or is it largely higher repeat rates from existing customers? So just wanted to understand what is the target and impact of all the marketing and product initiatives that you have launched so far? Sure. So I'll give you a little bit of flavor of it without actually giving you the real stuff. The reality of this is obviously we had started to lose the momentum of acquiring new customers at the rate which we required to deliver on our results. And that's why we went experimenting, because otherwise we might do stuff which might not be rational for business. And, we've always maintained cost is a discipline, business is a discipline. We've got to do right things all the time, and sometimes it might take time. And that's why we have talked about by the end of this year, we should be in a place where we would have experimented completely and have our playbook ready. Now, keeping that in mind, I think, we did pre-pone some experiments, like you talked about, during the quarter of July, August, September, and continued completing it towards October, November, December. Akshay has already mentioned we are pretty much now complete in terms of the playbook we have, and that gives us confidence, that this playbook will now work across geographies, and will help us drive sustainably the momentum as far as the GCs is concerned. That's why if you look at the slide, slide number nine, Akshay has talked about aggressive guest count growth and on value experience, relevance, profitability and consistency. I think we've looked at those pillars, and we were comfortable to give you out this guidance of saying how it is all coming together. I don't know if I've answered it, but in December, we for sure saw the kind of new store, new guest count we needed to bring in more customers. We've seen that kind of momentum stay in December and sustain and improve far more in January. That's where the big picture lies. Understood. So, new guest count is the primary sort of focus and result. That's what I was wanting to understand. Correct. Correct. So obviously, you know, a value-led entry level price point communication, you know, which is a holistic value though, will obviously bring in a lot of customers. We also have a lot of levers within the restaurant to, trade them up, keep them coming back through our whole McDonald's experience that I mentioned in my commentary. So it's a holistic approach. It's not just about acquiring new customers, it's about acquiring them, retaining them, and keeping them to, keeping them coming back at a particular frequency. Yes, that's helpful. Thank you. The next question is from Percy, from IIFL. Please go ahead. Hi. Can you tell me what is the issue in South India? What is the reason why the sales growth is lower? So I wouldn't say there's an issue. I think obviously as we've been kind of focusing on the customer, right? Even in the West, it's kind of taken us some time to fully understand, how to deploy our strategy. And it's not very different from what we're doing in the. what we've been doing in the past, but we're bringing everything together, across the five pillars that I spoke about. So we started that journey in the West. We've seen tremendous response in the West. We've already deployed it in certain markets in the South, where we are already seeing a good response, as expected. So I don't think there's anything too fundamentally different. I know that we have been calling it out, because obviously, traditionally, the West has done better. Our, you know, penetration in Gujarat, Mumbai, et cetera, has always been higher. We have been correcting that over a period of time in the South, too, and I think we've reached a good stage where now with these interventions, both should come up to the levels that we require. So I don't think that there's a fundamental issue. I think with this momentum that we're seeing, we'll see a broad-based growth across our business. The growth in South India over the last 2-3 quarters has dropped versus what it used to be earlier, right? What is the reason for that? So that's what I was explaining, right? We've been very well penetrated in the West. I think our brand has obviously grown stronger as a result of that, as we've been correcting that in the South, opening more restaurants, focusing more on our experience in the South and execution in the South. I think we've replicated what we've been doing in the West, and that might have been a gap earlier. So as we've been fixing that, we've also deployed this, you know, value-led communication, in the South a little after the West. So it is lagging slightly, but we are seeing it now converge in terms of momentum, and you will see that gap narrow and narrow in the quarters to come as our strategy starts, or continues to play out. Okay. Second question is on the delivery. Is the growth very different between the two main aggregators or it's very similar? Just the YoY growth rates or whatever you call it, growth or decline, whatever it is, are the numbers different between the two aggregators or they are in the same ballpark? No, they were very, very different for us. Obviously, needless to say, there are disciplines in terms of planning together, working together, improving partnerships, as people change from either sides, some things always get dropped, and sometimes it becomes transactional. So to pull it up and make it again a partnership, so it was different for us, without naming which one was better or which one was worse. Got it. So which means that there is a problem on only one out of the two aggregators, which has to be resolved, right? Yes. How quickly do you think that can happen? Will it take, like, one quarter or will it take two, three quarters? What's your estimate? Like, like I spoke about, we started correcting a lot of things in November, December. I think we've gotten the playbook right, like, even for delivery. I think, in January, we are seeing some amount of fruition of, of improvement across both the channels too. So, we don't, we don't think it is gonna take quarters. We think that we should start, becoming flattish for sure, across channels. And our focus remains, like Akshay said, to be able to grow our own channel too, so, so that delivery continues to remain a strong pillar because the, the market is growing. RTE point was, not too many brands are able to create a delta on dine-in. And I feel very proud of the fact that we now have the playbook to grow dine-in at a very high level, which we already have and grow from there, and also then play on the delivery side of it. This recovery, which is expected in one of the aggregators, does it come at a cost of margins for you or no? Like we've always maintained, we don't, we don't rush into things. That's why if we have to take a punch on our face on lower sales, et cetera, we do it. But we make sure that none of our disciplines get compromised because we are not here for the short term. So, what we are doing with all the partners is sustainable and is in the spirit of partnership. Okay, that's welcome. So yeah, while the growth might be muted versus what it could be possibly. Okay, okay. Thank you so much. Thank you. The next question is from Harit Kapoor on the Investec. Please go ahead. Yeah, good evening. I just had one on the operating expenses. On the employee cost, you know, if I just do a quick math on employee cost per store, you know, you've seen, you know, actually that number coming off a little bit. You know, just could you. And that's the feature of the last maybe 3-4 quarters on a year-over-year basis. If you could just give a sense on, you know, what, you know, whether the, the, or, you know, on the tech side, there has been some help which has allowed you to do this. How should we look at this number? And the second part is, on that, on the operating, on the operating cost side is the royalty bit. So while you did mention that, you know, incentives do fluctuate, especially end of calendar year, you know, this one is far lower than we've seen, as a percentage. You know, the rates are much lower than we've seen in the last several, you know, quarters. So is it just kind of end of the year incentive structure stuff, and it should go back to normalcy from the next quarter? So these are my questions on the operating costs. Yeah. Yeah. So like I said, it's an annual occurring activity. So if you look at nine months to nine months, that will give you absolutely clear view. As far as labor is concerned, some of it is operating leverage. I don't think there is fundamentally anything which is there, but if you look at it, we have been able to compensate for it in the other parameters of the P&L. So if you look at the P&L holistically, I think we've been able to do quite a decent job as far as cost is concerned. So despite a little bit of negative sales growth, we've been able to maintain and improve our profitability. Okay. Actually, my question was that you've done a, you know, a very strong job, which is actually employee cost per store has actually come down. So that's, actually, you know, something that I was trying to understand why. Okay, Benefit holistically is a little up by 0.20 this, but yeah, yeah. Okay, go on. Yeah, the second bit was. Yeah, okay, fine. I'll take that. And we see the second bit was on the uptick in growth that you were talking about in December. Jan, sorry to just harp on this one, but how much of this would you believe would be driven by your own initiatives, which is either, you know, normalizing aggregator as the months go by, you know, with or and as well as the pickup of value as your advertising is hitting, you know, with the consumer and footfalls are getting picked up? And how much of it is kind of, in your view, just overall demand leg, which you would probably be seeing in your other, you know, SKUs also, because, you know, you're seeing that trend, you know, another competitor also called that out, that you've seen some improvement. So do you think it's also kind of overall, demand led or overall macro led improvements also that, that have been, you know, favoring the company? So when we look at our October, November, December, which is our brand track, we don't see that the market is uplifted. It remains how it was in July, August, September. So it's been flattish as far as that is concerned. We have not yet. We don't know about the results of January, March. So if market becomes a little bullish, we would know about it in our track results. In October, November, December, definitely we've not seen overall at an IEO level, which is informal eating out level, there being tremendous amount of growth. In fact, it's remained pretty flattish from what it was in the previous quarters. So we'd like to believe a lot of changes happened with experimentation, what we have done, and then deployment of this experimentation in the marketplace. Got it. I'll come back some more if I have any. Thank you. Thank you. The next question is from Krishnan Sambamoorthy, from Nirmal Bang Institutional Equities. Please go ahead. Yeah, hi. Thanks for taking my question. A few questions on McCafé. So the management has consistently maintained that, 100% McCafé penetration is certainly not the end game, and there is a lot that can be done from product offering perspective. Could you elaborate on some of the initiatives that you've taken so far, and have some of these been postponed in view of the operating environment? So we are at 100% penetration in terms of McCafé, and now the main job that we're doing is to ensure that people try our coffee and our beverages. So I think we've been doing a lot of work in ensuring that our quality remains consistent across all these outlets now that have McCafés. And number two, I think it's about creating the habit. So we have a great product at a great price, and we're figuring out ways and implementing ways to make them have our coffee more regularly. So I think that's the first task to be done. In terms of product innovation, we definitely can, you know, keep improving on that, but I think the first task to be done is most important. You will see innovation at the beverage level, quarter on quarter, and, you know, you'll see that as we deploy offerings. But most importantly, in fact, this last quarter, we launched a subscription plan, which is actually being, you know, received extremely well by our customers. It's a digital plan, and, you know, I encourage everyone on this call to try it, because I know that, you know, most people would be, you know, coffee lovers. And I think it's fantastic value, and people are, you know, commending the overall experience from purchase to redemption to constant usage. So I think, you know, it's a great question. And I think our entire task is focused around making coffee drinking at McDonald's a daily habit. Sure. Thanks. Actually, one of the other things that you maintained is that one of the strength that McDonald's has is its ability to cater to various parts, unlike some of the other QSRs, and coffee was an important component of that. Would you agree that, say, competition from some of the newer players, specifically Third Wave, Blue Tokai, has affected that strength that McDonald's or McCafé has had, and therefore, the initiatives that you're talking about are even more important? No, so definitely. I mean, it's a similar story with western fast food, right, and QSR. Why did it become so popular eventually? Because obviously customers got exposed to it. And this, this job has to be done by the entire industry, which is why I always say competition is good, because it, number one, exposes customers, and secondly, it differentiates the, you know, best from the average to the bad. And I think obviously, as market leaders, we're gonna continue to operate in that high level of quality. And as the market expands, it only makes us better positioned to take advantage of the consumer opportunity, which is what's happening definitely. And I think that, you know, we're very fortunate that we've been ahead of the curve. And, I think, you know, the market's only gonna grow, and we are here to take advantage of that. Thanks, Akshay. Lastly, I don't know whether you will be able to share this or not. Over a 2- to 3-year perspective, because of all of these initiatives, do you see the revenue contribution from McCafé increasing by, say, 200-300 basis points, so without sharing the absolute number? So obviously, if beverage consumption increases, it is beneficial for margin. But the way I look at it is, you know, going back to our targets in terms of EBITDA and, revenue growth, and I think that will kind of, you know, tell you the whole story, because there's no point going into it at a category level in regards to our business model, because something goes up, something goes down. But obviously, if overall consumption goes up, high margin product, products sell more, it will be beneficial from a profitability point of view. It's definitely a growth category for us. Very useful. Thanks a lot. Thank you. The next question is from the line of Rishi Mody from RDM Advisory. Please go ahead. Yeah, hi, guys. Can you hear me? Yes, loud and clear. Yeah, my first question is on the INR 99 value proposition that you all have launched. You mentioned that it's not gross margin dilutive. So could you just give me an understanding on how and where has the cost efficiency come through for us, versus, say, the prior quarter? Like, what's being done different to ensure that this doesn't turn out to be gross margin dilutive? Rishi, again, I will not give you too many details, but we used to run a 1 + 1 proposition at INR 69. So you have to look at it holistically of saying what would have happened in the product mix. So it's about landing the product mix right. So we have worked on it, we don't see any dilution. So I'll not give you any details beyond that. I think I've given you enough to- You have discontinued the INR 69 rupee offer, have we? No, we have not discontinued. But in the product mix, when you put XYZ proposition, something goes down, something comes up. Overall, whether it's accretive on, first accretive on rupee value, then accretive on percentage, how many customers can it get? There is a full match to it, and that's why we wanted to do a lot of trials before we went live into it. And we did all that. Needless to say, there are parts of supply chain efficiency, when you know that you're gonna sell a product at a certain level, you can go back and do things at the back end also. So overall, in the net scheme of things, this is not margin dilutive. Okay, so EBITDA level, it's not margin dilutive, gross margin a little bit here and there. Is that the interpretation right now? I will not give you that interpretation, but, broadly, you can accept if you, if that makes sense to you. Because like I said, product mix, supply chain efficiency are still at the gross margin level. But yeah, if this, if this category becomes 100% of my sales, so percentage will go down, it's needless to say. But you're actually running a entire product mix, right? In which McCafé is a category, this is a category, there is core category, there is delivery business. So there are so many nuances to it that which I can't explain to you on a call for sure. I think what is important- Got it. is for businesses which are front-end facing, is to be able to have the discipline of not doing stuff randomly, and being able to go to the market and see what really impact it is creating. And for us, as we've seen now across the entire West and stores in South, we don't see it as margin dilutive. Correct. Got it. Second question I had was on the royalty piece. So about 2.4% is the royalty for this quarter. And for nine months it's 4.5%, versus last year, nine months was 5%. Is, like, should we consider that this year will be there's some accretion on the royalty piece or, or some discounting that we've gotten from McDonald's? So I think the way to answer that is this year would be the right base to look at it. I think, you know, we continue to work with our partner in terms of our royalty structure. And, we've, you know, come to an agreement in terms of what the base should be, and this year is very well reflective of that base. As you know, we had put out a release when we closed that conversation, so that was only a few months ago, and I think this quarter is when the benefits have started kicking in. Okay, so it will drop further, like if H1 was No. -higher royalty? No, no. No, no, this will be the royalty base, and the rest is out on our website in terms of what the year-on-year escalation will be. Okay, all right. Final question. Although using QSRs, like, say, Domino's or even Chinese QSR players, have also increased their value proposition, they are also coming with INR 99 lunch menu, INR 99 combos, which used to be slightly higher priced earlier. Is that leading to reduction in the pie overall for, say, burgers or for you guys? Is that impacting you all or it's now kind of settled down? So Rishi, I think we've spent a lot of time talking about how these propositions that we've been deploying across the five pillars that I mentioned, are actually bringing in more customers to our restaurant, right? Where we've seen significant positive traction on guest counts over December and January. So if that was the case, then this wouldn't be happening, right? So I think we've already answered this question, and competition will always exist. It existed 20 years ago, it exists now, and people will consistently try to capture the customer's mind. It's about how we do it differently, which allows us to continue to, you know, tread the path of market leadership. And we're very confident with the way we have centered our strategy around these five pillars, that this will only continue. Okay. All right. Great. Thank you. That's it from my end. Thank you. Next question is from Vishal Punmiya, from Yes Securities. Please go ahead. Yeah, thank you. Hi, team. Just couple of more questions on innovations. If you could just highlight how has been the performance of the recently launched Surprise Burger and also the Protein Slice? How is it, how it has done versus your internal expectations? If you could give some numbers on that. So, I think, in terms of product innovation, the protein slice is definitely a great introduction. It's the first of its kind globally, and it's allowed us to continue to expand, you know, our offerings to be in the consideration set of customers. So we've gotten a huge thumbs up over there, and it's just the start. We're gonna continue to build on these type of offerings that are, you know, valuable to a lot of the customers that come to us, and we have an opportunity to continue to grow this. In addition to that, you know, we'll be deploying innovations over the years, and we're thinking through it by keeping the customer at the center, and we're very confident that our calendar for this year also coming up, is extremely strong. Chicken Surprise we launched two years back, and it's, and we've got great feedback. That's why we've got it front and center as far as even our value proposition is concerned. So old product, but we've got it front and center. Just a follow-up on the protein slice. What is the number in terms of upgradations among the restaurants? So we don't break that down because, you know, it goes up, it goes down. But the idea is to increase the, you know, consideration set or to make sure that we fall in the consideration set of all customers. So even those health-conscious customers who are looking for a wholesome, nutritious option can come to McDonald's and have a protein slice. But the idea is definitely to build on this conversion opportunity. So as it keeps building, we'll figure out how to share more flavor. I think it's too early right now to talk about it. Okay. And just, secondly, on one of the initiatives that we had done many quarters back, which is basically doing away with the toy and introducing a book in the Happy Meal. What was the performance after that? How has been the family guest count after that kind of change in the portfolio? So, actually, there was an issue that we could not import toys out of the regular sources because of BIS issues and Government of India regulation, and we had to discontinue. We've been working on getting the toys back. As a short-term measure, we brought the books in. And needless to say, books haven't been able to do what toys used to do for us. And then we're working; till now, we are still working on being able to create a manufacturing facility either in India or being able to a certified supplier outside India, so that we can start importing toys and we can give back the toys, get back the toys in our restaurants. Thank you. Before we take the next question, a request to participants, so please limit your questions to two per participant. The next question is from Tejas Shah, from Avendus Spark. Please go ahead. Hi, thanks for the opportunity. My question pertains to product QSR industry and our value proposition also. So post-COVID, we saw that the whole industry kind of dialed up aggressively on value offerings, which also weighed on billing value. So all the recovery that we are hearing on QSR for last two months, should we also assume that at least when the traffic improves now, the transaction or billing value will increase and there won't be any further downgrading or more values looking behavior from customers from here on, at least from the base perspective? I think it depends, depends on how we look at it. I think, the important part is, like I said, in October, November, December, we haven't seen IEO movement. Luckily for us, western fast food had continued to grow on the back of rapid store expansion by everybody, so that's continued to grow. And, and, and that's the good news in our category, that out of the eat out, we've continued to remain high growth area amongst all the relative scale in the eat out segment. Now, when eat out improves, how it will play out, is, is a question which we continue to listen, observe the consumer. But what we know is as McDonald's, we are successful when we serve a lot of consumers, and we would like to do that over the next 1-2 years, anchor back in serving more and more customers. That's why Akshay, when he talked about on slide 9, talked about aggressive guest count growth as, as one of the key levers which we have. We don't want to get distracted by right now with any other task than to be able to grow the guest count for near to midterm. Yeah, just one follow-up there. So let's say the linearity between aggressive guest count growth and the overall billing value or transaction value would that be narrowing down? Or you believe that you don't want to commit anything on that front? Right now, I don't want to commit, because there are so many levers. It will give you ability to take price increase. The moment you are able to take price increases, obviously your bill value goes up. There are so many levers in order to increase bill value, but if you get overly focused on bill value when the levers are not working in the restaurant, it doesn't yield good results. So for us, the short to medium term is to be able to get the momentum of guest counts in the restaurant. We feel the second task is easier. You can do that even in the toughest time. Getting extra penny is not from the pocket of the consumer, is not the most difficult task. I think the difficult task is: how do you make a lot of consumers walk in? That's our focus. So that's why I don't want to comment on what happens on the other side. Needless to say, it's not that we are. If there is availability or we can focus on both of them together, we'll focus on both of them together. Thank you. The next question is from Avesh Bakshi, from Sundaram Mutual Fund. Please go ahead. Hi, sir. Hi, team. Am I audible? Yeah, yeah, loud and clear. Just one question from my side. If we look at our overall performance, say, from a metro Tier 1 versus, say, rest of the market basis, point 1, has there been big growth which has been more significant in one side of the market? Any comments on that, sir? Yeah, as we have mentioned, in July-September quarter also, South was leading, was a little higher as far as the decline is concerned, and West was relatively better for us, and that's continued for us. However, like I said, we have experimented and we're now pretty confident that we have got a playbook to be able to grow in both the geographies. That's perfectly understood, sir. Just, on a metro and tier one versus, say, rest of the market side, why I'm coming to it, this is, the second part of the question, that over last two, three years, would it be fair to assume that relatively higher shares of our stores have been opened in relatively smaller tier markets, given that, say, metro and tier one was more- No, no. No? Okay. I think, we have opened, if you look at maximum numbers of stores have opened in the key cities. We have not opened more than 20% of our total restaurant opening in smaller towns. So, compression is across these key cities too, hypothetically maybe- Yeah due to competition or overall market being lower. Fair enough. Secondly, just a follow-up on the, you know, discussion on the value proposition side. Mm-hmm. Do we look at our portfolio right now as value versus rest of the portfolio? Is that an internal thought process or market we look at, at overall restaurant side, or that's not something we, you know, directly keep a track on? I think one of the levers of value is an everyday affordable platform, but we would like to believe that our entire menu, menu is value. A lot of people find value in the spicy chicken. A lot of people find value in the crispy proposition. So we would not like to break value down into an everyday affordable platform. Needless to say, we do evaluate an everyday affordable platform with the new customers coming in, is it doing that job or not? But, but I wouldn't, I wouldn't club value and say value means the cheapest item on the menu. Correct. Sure. And so this, directionally, this piece continues to improve for us, or, is that one conduit for driving our overall growth, in the- Yes, definitely, because it's value for money that keeps customers coming, and it is our core pillar of driving guest counts. Sure. Helpful, helpful. Thank you. Thank you for the answers. Thank you. Thank you very much. Thank you very much. Thank you so much, everyone. Thank you, good- Yes, sir, that was the last question.