McDonald’s operator Westlife Foodworld stock surges 6% on Goldman Sachs upgrade, heavy volumes

Westlife Foodworld establishes and operates McDonald’s restaurants across West and South India, through its wholly-owned subsidiary Hardcastle Restaurants Pvt. Ltd. (HRPL).

Shares of McDonald's operator Westlife Foodworld Limited surged more than 7 percent on September 27 as Goldman Sachs upgraded the stock to 'buy' with a target price of Rs 1,075, implying a potential upside of 22 percent from the previous closing price.

The upgrade is largely driven by the launch of McDonald’s new McCrispy platform, which is seen as a key catalyst for recovery. This marks the first major addition to McDonald’s core burger category in over a decade, following the introduction of McSpicy in 2011.

The new menu additions include two premium burgers—McCrispy Chicken Burger and Crispy Veggie Burger—in the South and West regions, along with Crispy Fried Chicken in the South. These items are priced at the top end of the menu, which could positively impact the company’s margins.

Westlife Foodworld, formerly Westlife Development, is one of the fastest-growing players in India’s quick service restaurant (QSR) sector. It establishes and operates McDonald’s restaurants across West and South India, through its wholly-owned subsidiary Hardcastle Restaurants Pvt. Ltd. (HRPL).

Goldman Sachs believes McDonald’s global focus on expanding its chicken category will benefit Westlife and expects same-store sales growth (SSSG) to recover in the second half of FY25, helped by a soft base. The firm forecasts high single-digit SSSG from FY26 onward, signaling a positive outlook for Westlife’s growth trajectory.

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The update led to a spurt in volume for Westlife shares. So far in the day, over 15 lakh shares of the company changed hands on BSE and NSE combined, compared to the one-month trading volume of one lakh shares.

At 10:09 am, Westlife shares were trading 7 percent higher at Rs 941 on NSE. So far this year, the stock has gained just 14 percent, compared to an 18 percent rise in benchmark Nifty. In the last one year, however, the counter has dipped around 2 percent. In comparison, Nifty gained 30 percent during this period.

Westlife operates nearly 400 McDonald’s restaurants across 62 cities in the states of Maharashtra, Karnataka, Telangana, Gujarat, Tamil Nadu, Kerala, Chhattisgarh, Andhra Pradesh, Goa, parts of Madhya Pradesh and Union Territory of Puducherry.

Westlife Foodworld reported a plunge in first-quarter profit amid frail demand and higher expenses. Its consolidated profit after tax fell 89 percent on-year to Rs 3.25 crore for the quarter ended June 30.

The company's same-store sales fell 6.7 percent YoY during the quarter. Its expenses swelled around 7 percent to Rs 617 crore, led by a surge in "royalty costs", the company said in a statement without giving further details.

Westlife's revenue from operations was little changed at Rs 616 crore. "The quarter's results reflect the ongoing challenges in the operating environment," said Chairperson Amit Jatia.

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