Shares of quick service restaurant (QSR) companies fell up to 10 per cent on the BSE during Tuesday’s intra-day trade due to growth concerns. While Jubilant FoodWorks was down 10.5 per cent at close, Westlife FoodWorld slipped over 2 per cent. Other listed majors in this space, Devyani International, Sapphire Foods India and Restaurant Brands Asia, were trading flat at close. In comparison, the BSE Sensex was up 0.7 per cent at 74,616 at close.
In the past one month, these stocks have underperformed the market by falling as much as 13 per cent, as against a 4 per cent decline in the benchmark index.
The share price of Jubilant FoodWorks hit a 52-week low of ₹409.85, declining over 10 per cent in intra-day trade on the back of a multifold jump in trading volumes after the company released its pre-quarter update for the March 2026 quarter (Q4FY26).
The India business recorded a 6.2 per cent year-on-year (Y-o-Y) growth in revenues to ₹1,686 crore. Moderation in revenue growth continues, with growth declining from the high teens in Q1FY26 to mid-single digits in Q4FY26. Consolidated revenues recorded 19.1 per cent Y-o-Y growth to ₹2,505.8 crore for the quarter.
Improvement in consolidated performance is largely driven by outperformance in the international business. Domestic like-for-like (LFL) growth for the quarter stood flat at 0.2 per cent, given the higher base. Elara Securities, however, believes that the weakness appears largely attributable to ongoing commercial LPG supply constraints. This is likely the primary driver of the miss, rather than any structural demand weakness, especially as competitive intensity in the pizza category continues to moderate, it adds.
The ongoing US-Iran conflict is creating operational challenges, primarily through disruptions in LPG availability and logistics. A large proportion of stores remain dependent on commercial LPG cylinders (for Domino’s, over 70 per cent; KFC/Pizza Hut, over 60 per cent), making them vulnerable to supply-side constraints. While some players (e.g., McDonald’s) have low dependence (20–25 per cent of stores), companies have been able to navigate the situation, and most stores across brands were operational during March, according to Motilal Oswal Financial Services (MOFSL).
Commenting on Jubilant’s Q4 update, Elara Securities said that it will closely monitor LFL trends going ahead to assess whether the Q4 weakness is transient or indicative of sustained pressure, as this could trigger potential downgrades to estimates and valuation multiples.
Companies have taken multiple initiatives (electric ovens, induction cooking, menu alteration); however, any supply shortage can still disrupt operations going ahead. Gross margins are expected to remain healthy, while some companies (McDonald’s, KFC) have taken to value offerings/discounting during the last six months, which can have an impact on margins, the brokerage firm said in the consumer sector Q4FY26 result preview.
According to MOFSL, QSR companies in Q4FY26 have shown early signs of sequential improvement, with January witnessing relatively better traction. Early Navratri (last year in April) and Ramadan had a partial impact on demand. Still, most companies have seen better same-store sales growth (SSSG) trends than in Q3.
Meanwhile, India’s food service sector is highly dependent on LPG, with nearly 90 per cent of the ~0.5 million organised restaurants relying on commercial cylinders because PNG access is largely limited to select metros. Most outlets maintain only limited inventory buffers; hence, a prolonged supply shortage could quickly translate into operational stress for 25–30 per cent of restaurants, analysts at JM Financial Institutional Securities said in the QSR sector update.
Anurag Katriar, ex-NRAI president, argues burger and pizza QSR chains appear relatively insulated due to their greater use of electric equipment, whereas Indian, Chinese, catering, and smaller independent outlets remain more vulnerable due to their reliance on flame-based cooking. If the LPG shortage extends over a longer period, the sector could see meaningful operational disruptions and margin pressure, particularly given the industry’s high fixed-cost structure.
