Westlife Foodworld Ltd (NSE: WESTLIFE) Q1 2026 Earnings Call dated Jul. 23, 2025
Corporate Participants:
Chintan Jajal — Lead Investor Relations
Akshay Jatia — Executive Director
Saurabh Kalra — Managing Director
Hrushit Shah — Chief Financial Officer
Analysts:
Devanshu Bansal — Analyst
Aditya Soman — Anlayst
Gaurav Jogani — Analyst
Avi Mehta — Anlayst
Tejash Shah — Analyst
Jignanshu Gor — Anlayst
Jay Doshi — Analyst
Resha Mehta — Analyst
Amruta Deherkar — Anlayst
Unidentified Participant
Presentation:
Operator
Hello, ladies and gentlemen, good day and welcome to the WestLife Food World Limited Q1 FY ’26 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 touchstone phone. Please note that this conference is being recorded. Before, 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 expectation 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 Chinchan — Chintan Gajan. Thank you, and over to you, sir.
Chintan Jajal — Lead Investor Relations
Thanks, Steve. Welcome, everyone, and thank you for joining us on earnings conference call for the first-quarter of FY ’26 ended 30th June 2025. I am Chintan, Head IRF. From the management team, I have with me Mr Akshay, President and CEO; Mr Saurabh Kalda, Managing Director; Mr Rishit Shah, Chief Financial Officer. We will keep off today’s conversation with Akshay sharing his thoughts on overall business progress and outlook.
This will be followed by us through operational, financial and strategic highlights. Post that, we can open the forum for questions-and-answers. We will be referring to earnings presentation and financial releases available on the NFE, BFC and Investors page of our website. With that, I now request Akshay to commence this session. Thank you, and over to you, Akshay.
Akshay Jatia — Executive Director
Thank you,. Hello and good afternoon or good evening, everyone. Thank you for joining us today. We started this financial year-on a steady note, navigating a persistent soft business environment. However, we remain optimistic that eating out frequency will gradually improve, supported by lower consumer level inflation. That being said, this marks our third consecutive quarter of positive comparable sales, reinforcing our confidence In the strategic path we’ve chosen and our ability to build momentum on this through the year. We continue to stay focused on what truly matters, driving guest counts, enhancing our value propositions, building customer excitement through product innovation and making strategic investments that set us up for long-term growth. We’ve consistently highlighted the immense potential we see in the South market. There is definitely a lot of work ahead of us to build our leadership across categories and to improve our accessibility in the South. To that end, we’ve decided to strengthen our regional leadership team. Our expanded South India business team structure will help us understand customer preferences whether accelerate decision-making, improve operational efficiency and enable us to achieve our regional growth aspirations. To foster sustained growth in the long-term, we’ve established a new vertical focused solely on long-term initiatives, often termed as Horizon 2 projects internally, with a strategic outlook extending beyond 2027. These represent a portfolio of highly promising endeavors that will ensure our continued market leadership in the foreseeable future. I’m working in close collaboration with our Chief Strategy and Growth Officer to drive this growth. Another highlight of the quarter is how we have improved the gross margin by over 160 basis-points sequentially, achieving a historic high of 71.6% gross profit despite all the commodity price and demand volatility. This has come on the back of structural changes to unlock supply-chain efficiencies. I’m very proud of the work done by the team to achieve this. I’m also proud to share that Westlife recently ranked 33rd among India’s best companies to work for, a powerful reflection of our people first culture and the passionate teams that we’ve built over the past many years. In-line with our commitment to shareholder value-creation, I’m pleased to share that the Board of Directors has approved an interim dividend of INR0.75 per equity share. Looking ahead, we remain optimistic on progressively improving the momentum during the year. Thank you for your continued support and trust in Wesla. I now hand over to Saurav to take you through the operational and financial details of the quarter. Thank you.
Saurabh Kalra — Managing Director
Thank you, Akshay. Ladies and gentlemen, good evening. As Akshay mentioned, the operating environment during the quarter broadly is consistent with recent trends, stable but remains soft. Despite the muted macro trend, I’m quite happy that we have continued to build-on our execution excellence and have delivered resilient performance across our core metrics. Consolidated revenue stood at INR6.6 billion, reflecting 7% Y-o-Y growth. Same-store sales growth stood at 0.5% with stable guest count and average check despite continued pressure on discretionary spending.
From channel performance perspective, our on-premise business grew by 8% Y-o-Y as we capture more dine-in occasion across key cities. This momentum reinforces the effectiveness of our value proposition and execution for strategy. Off-premise channel contributing to 41% of our total sales remain in-line with our three-year average. This balanced mix validates our thinking and our strength and relevance of our omnichannel model in serving evolving customers’ needs and balancing basis the consumer outlook.
Gross margin increased by 160 bps sequentially to 71.6%, supported by significant enhancement in supply-chain efficiencies. Restaurant operating margin increased by around 80 bps, led by strong focus on operational excellence, operating EBITDA at million was higher by 7% over last year. Cash profit-after-tax stood at INR474 million contributing to 7.2% sales. We remain focused on enhancing store productivity, strengthening cost coverage and improving unit-level economics to mitigate the impact of short-term volatility and strengthen our long-term brand equity and topline growth.
Our digital business contribute — continues to contribute around 75% of our total sales continues to be a significant driver of growth and consumer engagement. We remain — we maintain strong traction across self-ordering kiosk mud delivery app and my McDonald’s reward program with over 44 million cumulative downloads up and more than 3 million monthly active users now as we Call-IT. I can proudly say that we have one of the most digitally advanced store network — omnichannel store network across the country, enabling us to personalize experience and drive repeat engagement experience.
From a networth expansion perspective, we opened nine new restaurants this quarter, taking our total store count to 44 restaurants across 71 cities. Nearly all our restaurants now feature and Experience of the Future format. With 24% of them offering drive-thru services, our store development pipeline for the year remains robust and aligned with our Vision 2027 target of 580 to 630 restaurants. Our team is sharply focused on execution excellence and we continue to invest behind long-term growth opportunity with prudence and precision. To summarize, our growth factors are intact. We are fundamentally reevaluating what truly matters to the customer. While the business environment remains soft and the market is largely drawn towards affordability, we are instead focusing on consumers and redefining what value truly means to them. Accordingly, you will see a lot more excitement around holistic value in the coming two quarters, which will accelerate the momentum — which will accelerate our momentum.
Thank you for your time. I will now hand over to the moderator and open the floor for your questions.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star N2. All are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from the line of Devanshu Bansal from Emkay Global. Please go-ahead.
Devanshu Bansal
Hi, hi, Abshey, Saudab. Thanks for taking my question. Sir, there is some level of regional nuance to your growth performance as well, right? So where South region is sort of seeing relatively slower traction. In your initial remarks, you did attribute some leadership investments specific to that particular region. So I was checking if you can talk a little bit more on this and how do you see growth shaping up in the region for the remainder of the year? Thank you.
Akshay Jatia
So thanks for the question,. As we’ve highlighted consistently now in the last few calls, there is a very clear strategic path that we are taking and the West is obviously a region that’s responding very well and we’ve seen good traction. It’s also due to our strong presence in the West and brand strength that this is playing out quite well. In regards to the South, we’ve been in the South for 20 plus years now. So we have kind of entrenched ourselves well.
We are a well-known brand, but there are nuances in the South across the key cities itself, be it Bangalore, be it Hyderabad, be it Chennai. We have a very good understanding. However, we did feel that for enhanced decision-making, operational efficiency, sharper focus, we wanted to augment our business unit to have a focused view on the South, which is why we’ve augmented our leadership team in the South. It involves a business officer structure, working directly with Saurav and myself to drive growth. And that structure involves obviously support across functions, be it HR, operations, marketing at the regional level. So this is not that — this is not something new. We’ve done this in the past, but we did feel that for the stage the organization is at and the focus we want to deliver in the South, this was something that was the need of the hour and we’re quite confident in terms of our execution of the same.
Devanshu Bansal
Understood. And, just a follow-up on this. Is this the particular reason why our HO cost is slightly on a higher side this quarter. So is this specifically the reason for that?
Akshay Jatia
Sorry, could you repeat? We couldn’t hear the first part. So I’ll
Devanshu Bansal
Ask to answer your question.
Hrushit Shah
Yeah. Sir,, the majority of the cost is on account of certain strategic projects that we have kicked-off. It is — it is on account of upfront costs that we have incurred for the strategic projects, the benefit of which you will see in couple of quarters down the line that has led to slightly higher G&A cost and part of it is also on account of people, but majority comes on account of the strategic project-led cost in the current quarter.
Devanshu Bansal
Understood. Sir, last question from my end. So I was just seeing your optimized and on-premized growth, which suggests that footfalls in-markets are definitely reducing. Consumers are preferring convenience versus moving out in-markets, are we also sort of directing our expansion towards say travel, be it more through stores or stores in metro stations, airports versus say, freestanding stores and markets now.
Saurabh Kalra
So as per our stated strategy itself in vision 2027, we wanted to open more drive-through stores because that’s an integral part of our omnichannel strategy. So needless to say, we do want to do more drive-throughs. We are experimenting on metro stations, stores, etc. I don’t think that’s strategy yet. But our goal is very simple. We’ve got to be where consumers are spending and whether it’s long-distance transit in some of the areas like all the excess control highways, we would like to be a part of all excess control highways. We would like to be a part of all airports.
We would definitely look at short-term trans short transit like metro as opportunities for the future. But that doesn’t mean that we are compromising on other areas like high-speed or a mall opportunity. So I would not say we have changed anything dramatically. We would like to do as many standing as possible because what it does give us is another channel to serve our consumers, which we feel at some point in time will become a big growth opportunity.
Devanshu Bansal
Understood. Saurabh, can you just lastly help us understand as in what is the typical throughput difference between our drive-thru store versus the other stores? And any difference in terms of capex that we sort of incurred for drive stores versus, say, other stores?
Saurabh Kalra
So the way we structure, what I can tell you is there is not too much of a difference. Obviously, food is lower capital, but the rest of it we are able to manage within our resourcing. We don’t give clear breakout. Obviously, needless to say, earlier we have given this indication drive-thru does cost INR5 INR20 lakh extra, but that’s about it. So we are able to manage. The way we look at it is you are feeding something for the future and as many as we can get so that over a period of time, it becomes a long-term opportunity. And we have seen almost all do exceptionally well after five, six years of their growth and they go far higher than our system average.
Hrushit Shah
Fair enough. Thanks for taking my questions.
Akshay Jatia
Thank you.
Operator
Thank you. The next question is from the line of Aditya from CLSA. Please go ahead.
Aditya Soman
Hi, good evening. Sir, two questions from me. Firstly, can you just explain the gap? I know you talked about strategic projects that led to a higher-cost, but I still don’t get why the restaurant operating margin grew 11.4% and then the pre-IndAS EBITDA grew only 0.5%. So I’m assuming there’s an increase in the rent because there’s a gap in sort of the post-IndAS and pre-IndAS EBITDA growth as well. And the second question was just on growth overall.
I think this was partly asked in the previous question, but — but the on-premise growth basically over two years now is about 2.5%, if I just do a simple average and off-premise growth is around 5%. So this is significantly lower than what we are seeing, let’s say, the aggregators deliver either in a single year or even over two years. So any sort of perspective on that? The on-premise, I understand last year was impacted by one of the geopolitical events, but this year, you shouldn’t have had that impact as much.
Akshay Jatia
So Aditya, just answering your first question, I think you spoke about the difference between ROM and operating EBITDA, right? And we did call-out that our G&A expenses have been a little higher this quarter due to investments in strategic projects and people-related costs. So that is probably the difference and I’ll ask you to take this offline, which in-turn if required. But apart from that, we’ve actually seen an improvement in ROM as well as gross margin.
So we have delivered good operating efficiencies despite pressure on the top-line. Second is our business model and the aggregators business model are very different. So I don’t think our premise growth can be compared to theirs because we have number-one delivery, we have takeaway, we have drive-thru and our business model is more organic. Theirs is a led by a variety of levers. So I think despite the pressure on the delivery business all-around which we’ve seen even aggregators report, we’ve continued to navigate that environment quite well without it impacting margins as well as drive more growth on our on-premise business, which is actually where our competitive advantage lies. And it’s our omnichannel model that’s going to drive the same-store sales growth that we have given guidance towards?
Aditya Soman
Yeah. Thanks. Just to press on actually on both. I mean, my first question, actually my question was more on the EBITDA growth is 6.9% post Indias and pre-IndAS is 0.5%. So I’m assuming the gap between those two numbers has to be rental, right, because the other costs will all come in both — both before India — preposed and pre-India. So I’m just trying to figure out.
Akshay Jatia
I mean, like I said, we can — if it’s an accounting discussion, we can take this offline. Like I maintain our ROM has expanded, our gross margin has expanded. So please pre-India, post-Inders can we discuss offline?
Aditya Soman
Yeah. Fair enough. And the second question was more actually on the growth itself, right? I mean it was — so you talked about 4% last year, 6% this year. So over two years it’s sort of on average 5%, which was the one I was comparing with aggregators. But anyway, I get your response. Thanks.
Saurabh Kalra
So from an aggregated standpoint, I think last-time also we made this call from our understanding, we are pretty much the leaders as far as aggregator business is concerned. We are being competitive in the market which we play in. Beyond that, we wouldn’t have any comments on how — what are the drivers of your growth?
Aditya Soman
Understood. Thank you.
Operator
Thank you. Our next question is from the line of Jagani from JM Financial. Please go ahead.
Gaurav Jogani
Thank you for taking the my question. Sir, my first question is with regards to the gross margin. I mean, we have seen a handsome gross margin expansion this quarter. How much of this is really sustainable and what kind of gross margins can we target on a two-year, three-year medium-term perspective?
Hrushit Shah
So I think the guidance on the total number has been given in our vision 2027. We’re still maintaining that guidance of how will we scale. I think gross margin was always a part of it. We have been — we believe that the number which we have just posted is a sustainable number. We should be able to sustain and with average volume going up, we should even be able to improve on this?
Gaurav Jogani
Okay. So because this is like 150 60 bps. Is there any — I mean, what would it be fair to assume more like a 71 on a sustainable basis or even this number is sustainable?
Hrushit Shah
I think the bigger point, like we’ve always maintained, right? So it’s not about — it’s about restaurant operating margin, it’s about operating EBITDA. There are line items. Sometimes some goes up, sometimes some other things goes up. If tomorrow there is an inflationary pressure on some, I will not increase my price overnight. But that doesn’t mean as an organization, we are not going to focus on improving. To sum it up, right now, we see this as a stable base from where we will start working on it.
Gaurav Jogani
Sure. That’s helpful. And my second and last question is regarding the average unit volume of per store. I mean, this has also declined on a Q-o-Q basis. So given that it still continue to remain in that INR6.2 crore kind of a range, how are you looking to drive that up given that the guest count is now stable the check size because you’re offering — the value offer is also being stable. So what will be the key levers to take this ahead to achieve the division 27 numbers.
Akshay Jatia
So Gaurav, I think we’ve given flavor of that in our Vision 2027 document. Even in my commentary, we discussed about certain opportunities for the long-term that we are scoping out. But more importantly, there is a strong focus on our business in the South, which we believe are is poised for growth. And by delivering that itself, we should start moving in the right trajectory and on a good — we should be on a good trajectory. Additionally, we’ve always spoken about the levers being centered around our core categories of burger chicken coffee Coffee, our digital and omnichannel model. And I think with this comprehensive focus, our Vision 2027 growth is quite clearly laid out.
Gaurav Jogani
No, so I do understand because at that time, the demand conditions were also very different when the Vision ’27 guideline was laid out. And now given that we are seeing the prolonged slowdown in the overall demand environment, so any other steps that you are taking versus what you had decided then that should help you grow at least ahead of the market?
Akshay Jatia
Yeah, our strategies don’t change risk basis the macro-environment conditions because we’ve taken that into account when we thought through our strategy. Yes, I think one immediate response to your question is our entire focus on value-for-money and that’s not only about price, but it’s more about being relatable as a brand, having the right offerings across occasions for our customers. That’s our number-one priority. But that again is relevant for both West and South. There may be some more work required in the South, which is why we’ve spoken about the South as well separately. And I think, again, that falls within our menu and brand lever and the categories that we play with remain the same, chicken coffee. So that’s why the strategy doesn’t change comprehensively. There are some tactical interventions that will be required and I think we’ve cover most of them.
Gaurav Jogani
Sure, thanks. That’s all from me.
Operator
Thank you. The next question is from the line of Avi from Macquarie. Please go ahead.
Avi Mehta
Yeah. Hi, team, am I audible?
Operator
Yeah. Yes, sir, you’re loud and clear go-ahead.
Avi Mehta
Yeah, hi, so hi Aksh. I wanted to kind of just pick on this gradual pickup that you’re talking and you’re expecting in the coming year. Are we witnessing any early signs of this, which gives us some confidence or is this more linked to our South initiatives? If you could just spend some time to help us appreciate this? And the reason is, if I look at the same-store sales growth, it’s broadly similar to 4Q levels. So I wanted to kind of just understand, you know, is this more a macro-led comment or you’re more bullish because of what gives you confidence over here? Thank you.
Saurabh Kalra
So Avi, this is Saurab. Hello, nice to see you. Every quarter we see you only during calls, we need to meet up soon. But having said that, actually what gives us a lot of confidence is a lot of things which we put in motion, we have seen it work quite well in best and started to give us results which we expect — which we expected. So that gives us a lot of confidence that from a strategy and execution side, we’re in the right direction. As Akshay spoke about, we need to be sharper with a nuanced execution for South. We’re putting across — we put across a team and we believe if we are able to solve for South, we will be at the path which we’ve spoken about. And that’s a work ahead of us. We are fairly confident about it and that’s what gives us some amount of confidence that we should be able to charter this path.
Avi Mehta
Any early signs,, that we are witnessing, which we can share?
Saurabh Kalra
I just get on this call. Yeah, but there are some experiments which we were doing in Shah, which seem to be giving some greenfields.
Avi Mehta
Got it. Got it. Just a second bit is that on EBITDA margins. Now I mean if I were to read between your comments, you sound your performance as well as your comments makes it sound a lot more confidence in the EBITDA margin. Would it be fair to argue that if SSS growth does not decline, EBITDA margins have probably bottomed-out and we should not see a margin decline from here on.
Saurabh Kalra
I would imagine, unless there is something which is beyond our control, but I would imagine that should happen that EBITDA margin are pretty much at the level where we should be able to sustain and improve from where it stands today?
Avi Mehta
So sort of basically, our initiatives have ensured that we can manage costs a lot more better now, even if same-store sales growth remains stable the way it has been. That’s what I was trying to get to.
Saurabh Kalra
That is what our — that is what the indication is, but I don’t want to be because we never know in an environment like India, something goes up, tomorrow something goes down. But right now, it looks like it is relatively stable. And at this number you should be able to show some amount of sustainable improvement and maintain full share.
Avi Mehta
Got it, sir. Thanks a lot. That’s all from my side. Thank you very much.
Operator
Thank you. The next question is from the line of Shah from Avendus Sparks. Please go ahead.
Tejash Shah
Hi, thanks for the opportunity. A couple of broader questions on two dimensions of demand, one on IT and other on competition. The first, see, IT and appraisal cycle hiring in both appraisal cycle has been weaker this season. And so just wanted to understand, are you seeing any incremental weakness in your COVID, which caters to that part of the demand IT or if you monitor it that way.
Saurabh Kalra
So yeah, we generally don’t give this breakup, but I would Say
Akshay Jatia
So again, you know, just to add to Saurav’s point, we don’t break it out by cohorts because like he said, right, sometimes one cohort will go up, one cohort will go down, things will stabilize. That’s the beast of the business that we’re in, right, the retail business, a hypercompetitive business in a country like India. And these cycles will keep going up-and-down. So our endeavor is to ensure that we have a sustainable business across all occasions and all types of cohorts, where if there is one that’s not performing, there are others that will make-up for it. So that’s how we look at the business. And the breakup that we are talking about now is more regional because we feel that’s more relevant where if we are able to kind of tackle our regional nuances that come with our business, we’ll be able to deliver on the guidance that we’ve given the market?
Tejash Shah
Perfect, perfect. No, I was just trying to understand because versus other QSR, you are more over-indexed because of Pune and then South being there. So just trying to understand if there is any read-through there. Second question is, how intense is competition currently and what form is it taking? Is it more aggressive pricing at value and increasing share for voice share or increasing spend for voice share or competitors are crowding out buying real-estate because that’s what we are also picking-up that the rental costs are going up. So just wanted to understand that apart from it.
Saurabh Kalra
I think it’s from a rental model standpoint, we’ve always looked at ourselves saying how do we differentiate and look at the consumers. Like you rightly said, when going gets tough, everybody talks about affordability and value. What we want to be able to do is not only think about affordability and value, but what truly matters to the consumer. And what I can assure you is we are trying to do a lot more things looking at the consumer in mind and be differentiated in the marketplace.
Some of the launches are planned in the next two quarters. You will see — we are focusing on our core. We are trying to do things which are little away from what everybody else is doing right now. But is value important? Absolutely important is affordability important in the current context? Absolutely important. The first question you asked, is there pressure in some of the IP yes. But then the way to look at it is if we are truly a value brand, we should be able to gain share during these times. So that’s how our mental model is and that’s how we are trying to look at it. Now how it plays out, we are we are quite gung-o that we should be able to find an answer to it because some of the places we do see some answer emerging. So that’s how I would leave it.
Tejash Shah
Right. And just one follow-up on that. So considering the impetus that industry is giving value end-of-the offerings, including us. Our gross margin expansion has been very, very robust and you attributed a large part of it to supply-chain efficiencies. But just wanted to understand, is there any category mix dynamics also playing there that chicken indexation actually gives you more room to play on margins versus let’s say, non-chicken part.
Akshay Jatia
So I don’t think you know, it’s exactly like that. Like we’ve said, it’s supply-chain efficiencies that we unlock, product mix, we have almost 70% of categories available through our menu in Western fast-food as we have calculated. So product mix will always go up-and-down, but our endeavor is obviously to keep improving operating margin.
Tejash Shah
Got it. That’s all from my side and all the best for coming quarters.
Akshay Jatia
Thank you.
Operator
Thank you. The next question is from the line of Jaganshu Gaul from Bernstein. Please go ahead.
Jignanshu Gor
I wanted to understand two specific things. One, on our reporting of AUV, we have changed the — we have changed the definition. Do we intend to continue with this — should this change? And second, how do we think about its situation hitting earlier definition for an series understanding?
Saurabh Kalra
So I think the earlier definition was pretty much all the operating stores We have just made it comp. I think that is rich data for you guys to be able to calculate so comp being stores which have been operational for more than 12 months, what is their average. Needless to say, you can yourself calculate what total AUV looks like.
Jignanshu Gor
Okay. And the base for this and the same-store sales growth number would be the same, right?.
Saurabh Kalra
No, yes and no, because what happens is some of the times restaurant closed down. So it will get removed from the comp AUV base. So all those are modulation around it, like for example, our companies might have a store like Phoenix which got shut-down, etc., etc. So it is not exactly like-to-like, but the idea is to be able to make it as close to like-to-like as possible.
Jignanshu Gor
Okay, great. Sure. Thank you. And second question was on gross margin. Would you be able to share what part of the gross margin increase is a factor of supply-chain efficiencies and what part is — have we taken any price increases in the quarter through on a Y-o-Y basis.
Saurabh Kalra
There was — there was a marginal price increase taken in March, but it was a very marginal price increase, like talked about. A lot of them are supply-chain efficiencies, commodity efficiencies, which have come in and we believe that they are structural in nature and we should be able to sustain that.
Jignanshu Gor
Got it. Great. Thank you.
Operator
Thank you. The next question is from the line of Jay Doshi from Kotak. Please go-ahead.
Jay Doshi
Yeah. Hi, thanks for the opportunity. Hi, Akshay. Hi,. My question is your confidence on further improvement in South. So at this point of time is are your SSSG growth rate numbers very different between the two regions? And do you think that South, which is probably — is it South dragging your SSSG or do you think South will accelerate and that should help your growth now? Is this South underperforming or
Saurabh Kalra
The simple answer to that, I would not say, I don’t know what the word underperforming because that includes a lot of things. But is it dragging down the FSG? Absolutely. So while we are doing quite well in West, we’re not doing as well in South. We did put few experiments in. Some of them are green and green shoots and we need to develop our execution excellence for South specifically, which is what Akshay talked about when he said that we are putting up a team, including a business officer, will directly work with us to ensure that this execution excellence happens inside. And our belief is that if we are able to do it, we should be able to get the traction insight, therefore uplifting our overall rates?
Jay Doshi
And is this operational aspect of execution or is it something to do with your product portfolio or competitive — competitive
Akshay Jatia
Yeah. So Jay, that’s why we mentioned it’s a business structure. It’s a business problem to be solved. It’s not only operational. And you know, the main thing is you have to put the customer in the center and understand why the stores are not performing as well as we want them to. And that is something that’s already work-in progress since the last few months. We’ve already intervened with some experiments and like Saurav said, we are seeing. And we’re working quite closely with the team involved to ensure that we bridge the gap and that is the endeavor. The confidence is high because we’ve done it in the West and we believe that once we’re able to solve this business problem, we should be on a very good trajectory, which should then continue to get better as we keep implementing all the opportunities in front of us.
Jay Doshi
Yeah. Understood. Thank you. My next question is, you know, at the time of articulating 2027 ambitions, I mean, demand environment was very different. Now in context of the current macro, which is not kind for the overall industry, if we continue to see muted SSSG, right? I mean, back then the expectation was that SSSG growth will continue to be 7%, 8%. But if it ends up at 2%, 3%, then what is realistically, what is the margin band in that one should think about, right, it’s 7%, 8% if you were targeting, 15% 17% if it sort of is 2%, 3%, what would you
Akshay Jatia
I think we can discuss this when we do come back if we need to. As of now, we continue to maintain that those are the targets that we are driving towards. We’re still in the middle of 2025. We have till the end of calendar 2027 to drive towards those targets. As an internal team, those are the targets that we set ourselves in all our discussions. And if there is a need to revise them, we’ll be the first ones to call them out and call-out that need, sorry. And we will then come back with a discussion that — or sorry, we’ll come back with a discussion that will be populated to everyone.
Jay Doshi
Sure. Thank you so much.
Saurabh Kalra
Thanks.
Operator
Thank you. The next question is from the line of Resha Mehta from Green Edge Wealth. Please go ahead.
Resha Mehta
Yeah, good evening. So my question is also kind of related to the previous participating — participants’ question on margin. So in our vision statement, we have outlined our aspiration to reach 18% to 20% margins. So if you look at the current margins of 13% and let’s take the lower band of 18% aspiration margins, it’s still a 500 basis-point gap. So how much of this improvement you know, do we expect you know, by 2027, let’s say from gross margin expansion, from cost efficiencies and from footfall? And what is the assumption here for a baseline SSSG to achieve, let’s say, an 18% kind of margin. If you’re not able to quantify this, would appreciate if you could kind of give some flavor on the margins aspiration
Saurabh Kalra
Yeah. So I think very clearly, we have talked about saying how do we go to say high-single-digit beyond the median of 5%, 6%. If we are able to do this, we believe we have done a good job in terms of being able to keep our breakeven from cost in control. So if we are able to get at least a year, year and a half of high single-digit comp growth around 7% also, we should be able to achieve what we are so much set-out to achieve. And that’s what we are planning to. That’s why we are showing we are not given upon it. We are very clear that in this kind of environment, we got to look at the consumer and be able to say what do we need to do in order to get where we want to be. So that’s how we are looking at it. Like I said, these are broad-based numbers. A lot of it the moment you want to do a match on our 6%, 7%, 7% of same-store sales growth, you will see whether it’s EBITDA or whether it’s 2027, at the lower-end, it will be achieved without too much of an hassle. So the big task to be done for us is how do we — how do we accelerate to be able to reach our top number? And that’s where the end of it is, that’s where we are working towards.
Resha Mehta
So would it be correct to conclude from your comments that largely this margin gap would be bridged by your SSSG expansion, which is to the tune of expectation of 6%, 7% SSSG to achieve an 18% kind of a margin broadly, I mean this is what would be fair to conclude?
Saurabh Kalra
Yes, broadly.
Resha Mehta
And you know what — so what would be the sensitivity in terms of, let’s say, if there is a 100 bps sort of 1 percentage point improvement in FSSG and what kind of operating leverage that leads to?
Saurabh Kalra
Yeah. So while it was all broad comments, I wouldn’t go here. You all are — you all can calculate the operating leverage or deleverage, which comes out of FSG being negative, positive. So I wouldn’t comment this there. At an organization level, when you’re creating a plan, you’re creating the plan to be able to say how do we grow revenue, how do we bring profitability in, that’s the endeavor. That’s how we look at it. Now can situation go wrong? Absolutely can something like COVID happened, all the profitability went down, we don’t know what we don’t know. But what we are saying is everything remains stable. We do believe that there is a task of accelerating growth and then we are working towards it to make sure that happens sooner than later.
Resha Mehta
Right. And just the last one. So our royalty is around 5.6% currently. How does that move over the next two to three years? Like what are the thresholds for it to increase, if any?
Akshay Jatia
Available on our website. So please take a look at that. And if you have any other questions around that, you can contact Chintan and his team. They’ll be able to answer that. But we’ve given all the guidance available for royalty on our website.
Resha Mehta
Sure. Thank you.
Operator
Thank you. The next question is from the line of from Wealth Managers India Private Limited. Please go ahead.
Amruta Deherkar
Yeah, thank you for this opportunity. Sir, my question is regarding there was this New deal which was announced like where thing meal was launched by the McDonald’s North and East. So is this offer available pan-India like we know Jump brand has this uniform rollout nationwide. So does have such a strategy too or does it have a regional specific where both the franchisees can have different product development like dishes development and also the new offer?
Saurabh Kalra
So the first answer is no wheel is not available with us. We strategically align a year in advance of where do we want to partner, like we are already talking about next year. So wherever we want to partner, we will partner. This is the two businesses are at very different stages and it’s up to the license fee to be able to say whether we’ll partner or not. So right now, we decided last year itself that we are not going to partner. So there is freedom within the McDonald’s framework in which we got to get to do what is right for our business and our customers and they get to do what is right for their business and their customers. So we did not participate in any.
Amruta Deherkar
Thank you
Operator
Thank you. The next question is from the line of Jagdish Sharma, an Individual Investor. Please go-ahead.
Unidentified Participant
Heard. I’m audible?
Operator
Yes, sir, you’re audible.
Unidentified Participant
Yeah. Thank you, sir. Thanks for giving this opportunity. I just have one broad question. While in the peers or sector, if we have to see the gross margins of our competitors, both are in the same level, similar level, 70% 72%. I know in our recent document we want to take our EBITDA margin to 18% to 20% and all these things. But why is the EBITDA margin different even now because they were talking about 23% 25%. So we are talking about 18% to 20%. So what is the difference between us and our pizza competitors in other business?
Akshay Jatia
Yes. See, we have different business models. We’re here to talk about our business model. So can’t really comment on their business model in terms of their gross margins. But what we can say is we’ve clearly given our guidelines in terms of our EBITDA margin aspirations and we stick to that.
Amruta Deherkar
Okay. Okay, sir. My last question is like what is the guidance for this year, SSP and the revenue growth.
Akshay Jatia
Okay. So again, we don’t break it out into yearly guidance. You have our vision 2027 guidance. And we hope to get to a point where we can do that so that there’s more predictability. There is improving momentum expected through the year. We’ve been at this flat level for the last couple of quarters. Like we’ve discussed through the entire call, there are multiple growth initiatives in the pipeline and we definitely don’t see things worsening. We feel the bottom has already passed us and you know, the improvement should be apparent in our results as we move forward.
Amruta Deherkar
Great, great. Thanks, sir,
Akshay Jatia
Your are really awesome. I’m good — I’m a fan of your this thing. And one suggestion or one is that it’s possible give the shareholders some discount in terms of coupons or something like that,. Yeah.
Amruta Deherkar
Thank you, sir.
Akshay Jatia
Thank you
Operator
Thank you. A reminder to all participants that you may press star and 1 to ask a question ladies and gentlemen, if you wish to ask a question to the management, you will press star and 1 as there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.
Akshay Jatia
Thank you so much for attending our call and we look-forward to seeing you again next quarter.
Saurabh Kalra
Thank you. Have a good day.
Operator
Thank you. Thank you. On behalf of Westlife Foodwear Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you