Westlife Foodworld Limited (505533) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Westlife Development Limited Q1 FY '25 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Chintan Jajal. Thank you, and over to you, sir.

Thanks, [indiscernible]. Welcome, everyone, and thank you for joining us on Westlife Foodworld Earnings Conference Call for the first quarter ended 30th June 2024. I am Chintan Jajal, Lead IR at Westlife. From the management team, I have with you Mr. Amit Jatia, Chairperson; Ms. Smita Jatia, Vice Chairperson; Mr. Saurabh Kalra, Managing Director; Mr. Akshay Jatia, Executive Director; and Mr. Hrushit Shah, Chief Financial Officer. We will kick off today's conversation with Akshay sharing his thoughts on overall business progress and outlook. This will be followed by Saurabh taking us through operational, financial and strategic highlights. Post that, we can open the forum for question and answer. We will be referring to earnings presentation and financial releases available on the BSE, NSE and Investors page of our website. I also request you to please go through the safe harbor disclosures in our earnings presentation. With that, I now request Akshay to commence this session. Thank you, and over to you, Akshay.

Hello, and good afternoon, everyone. I extend a warm welcome for [ earnings call ] today to review the performance of Westlife Foodworld for the first quarter of FY '25. I'm very pleased to announce that our company has crossed a significant milestone of opening 400 McDonald restaurants this quarter. We now proudly serve customers across 66 cities and to further expand our market presence, we successfully opened 6 new restaurants this quarter. Aligned to our vision 2027, we are targeting to open 45 to 50 new stores in FY '25 with a focus on South, smaller towns and Drive-Thrus. In response to the challenging current environment, a sustained focus on driving guest counts by leveraging the meals platform and value remain the cornerstone of our strategy, ensuring that our customers continue to see McDonald as a go to choice. By continuously replacing our menu and introducing new offerings, we kept our customers engaged and excited about our brand. For instance we launched the McFeisty [indiscernible] range with spice stuff our iconic core burgers McVeggie and McChicken for the quarter. We also launched Mango flavor deserts which received good customer response. McCafe food items like cookies and Brownies, which were piloted over the past few quarters are now being extended across our entire network. We aim to achieve a 15% to 18% contribution of McCafe to serve AUV by 2027. Additionally, to connect with our Gen Z customers, we brought the anmie world to life at McDonald. The initiative embodies our dedication to integrating our brand with popular culture offering unique experiences that resonates with the relevant audiences. Consistent efforts towards strengthening our brand have yielded positive results. Our Real Food, Real Good platform which was further bolstered with the launch of "Yeh Hai Mera McDonald" campaign, where we collaborated with the celebrity chef Sanjeev Kapoor. In this initiative, Chef Kapoor championed our commitment to maintaining impeccable food quality, hygiene and safety standards in our restaurants. Our digital strategy continues to gain traction, driven by the increase in preference for our convenience amongst our customers. As a steadfast organization, we are continuously refining our operational efficiency and focusing on improving our financial performance to further improve operating leverage. As we navigate, we are not nearly reacting but proactively shaping our future by being committed to the strategic focus we laid down in Vision 2027 which remains firmly intact. Thank you once again for your trust and commitment to our journey. I will now pass it on to Saurabh to share the operational and financial specifics of the past quarter. Thank you.

Thank you, Akshay. Good evening, everyone. Thank you for joining us to discuss our Q1 results. Last quarter, we highlighted that after several consecutive quarters of declining out-of-home consumption, the March quarter was relatively stable on a sequential basis but lower compared to the same period last year. I'm pleased to share that we are seeing further improvements in the underlying demand trends, even though frequency was higher sequentially and close to last year's level. As retail level inflation continues to moderate, [indiscernible] higher incomes and savings, we believe the frequent consumption will improve gradually. Having said that, we will continue to monitor the market trends and drive marketing and execution initiatives accordingly. Now turning to our performance in quarter 1. Our top line at INR 6.16 billion wasn't that higher on a year-on-year basis. Same-store sales stood at negative 6.7% on a base of plus 7.4% of last year. If [indiscernible] off-premise business and the same-store sales has been stable which is a good sign of momentum. But that also suggests that there has been some pressure on on-premise business. If we further dissect on-premise business we observed that the cohort of stores that are impacted by external community related issue continues to drag the overall momentum. These external issues are slightly prolonged compared to our initial expectations and estimates. However, we are still confident that these are transitory. If we shift our perspective, the quarter saw continuing improvement with exit month being better. On a sequential basis, sales was about 10% higher versus Q4 in line with [indiscernible] and some contribution from these stores. During the quarter, we continue to build on our value platform to drive incremental footfalls. Product innovation continued with the launch of new entry level [ chicken supply models ], which we believe in an open area for us. We believe that this will help us accelerate and differentiate the value platform and our value offering in the coming quarters. Moving on to business channels. Our off-premise business grew by 6% year-on-year, contributing 42% of the overall sales. On-premise business, however, declined by 3%. Our average sales per store on a trailing 12-month basis was at $61.3 million. Digital sales stood at 69% with over 3 [ tractions ] -- with over 3 million monthly active users on a mobile app. My McDonald's reward continues to gain traction and we expect this program to further accelerate our consumer value and our consumer frequencies. Profitability during the quarter was subdued, largely on the account of unfavorable operating leverage and higher royalty. Having said that, gross margin in quarter 1 at 70.8% continued its upward trajectory. This decide our value-platform play. This underscores the robustness of our business models in driving various value segments as well as our supply chain excellence. Restaurant operating margin and operating EBITDA were lower by around 400 bps Y-o-Y. Other operating expenses were higher on account of elevated marketing spend, which will continue for next 1 or 2 more quarters. Depreciation normalized to 7.9% is likely to go down further with better volumes. Cash PAT stood at INR 463 million or 7.5% of sales. On network expansion, we added 6 new restaurants in Q1. As of June 2024, the total restaurant count stood at 403 restaurants across 66 cities. 92% of these restaurants are McCafe's, 86% are EOTF restaurants and 20% are Drive-thrus. Our network expansion plan remains unchanged. We will add 45 to 50 restaurant in FY '25, reflecting our confidence in the structural growth and opportunities which fly ahead. Finally, while the business environment remains tough, demand green shoots are emerging, while robust value platform strategy and a pipeline of innovative products, we are optimistic of higher average unit volumes in the second half of the year. We remain committed to our Vision 2027 targets. Thank you for your time. I now hand over the call to the moderator and open the forum for your questions.

[Operator Instructions] The first question is from the line of Shirish Pardeshi from Centrum Broking.

I have 3 sets of questions. Starting from the negative SSG and now we have launched the entry-level burger, do you think this is enough for us to arrest the decline in SSG or we need to do more activities in terms of the localized promotions and there is a need for further improvement in new products?

Thank you, Shirish. To me the first point is, as you would know, and we would look at our history, we always believe that we want platforms to work. And I think we have launched our value [indiscernible] platform last year in June and further strengthened it in October of last year. Post that, when we looked at our situation, we saw that there was an opportunity for our value platform to be strong enough for [indiscernible] and McSaver plus platform, INR 69 one plus one is an endeavor in that direction. And we believe that these platforms, along with our existing platforms are good enough to drive not only short term but long term sales. That's how we've been looking at it. And we believe that it's a part of the play, which we've already committed to in Vision 2027, which includes being a leader in meals, [ snacking ] through coffee, burgers and chicken.

Yes. So that's helpful, Saurabh. A follow-up to that. I think our margins has been at the lowest. Now if the value layer picks up, for example, you will be positive, say, LFL or your same-store sales growth will improve. But does that mean that the margin -- there are very limited levers at this point of time to improve from here?

So Shirish, this is Akshay here. So from our point of view, as you've seen we've consistently delivered an increase in both gross margin and EBITDA margin over the years. And the current drag in margin has typically come from operating deleverage, obviously because of negative same-store sales. From our point of view, as we see average unit volumes picking up, you will not only see margins grow, you will see it grow exponentially because of the operating leverage as we commenced. And as we demonstrated, even if we deploy value platforms, we continue to increase margin by doing a few things. One of them being removing cost from the system. The second one being using product mix effectively. For example, McCafe will only accelerate the momentum further as the coffee market is growing in our country, and we are very well positioned both from a quality as well as a value point of view. And #3, in terms of taking pricing were required strategically. So I think that we are more concerned with driving average unit volumes, which will increase operating leverage and margins will only follow.

And my last question on 403 stores, what we have now. And there are 2, batch one is that out of the 6, how many Drive-thrus we have opened? And out of 403, what percentage of stores are now Drive-thru?

Around 20% are Drive-thru. Around 400 -- we've got around 82 Drive-thrus in total, and we've opened 1 drive-thru in the last quarter.

Okay. No. The reason why I'm asking, if the overall SSG is declined, I'm sure you would be tracking the SSG in the Drive-thru. Is the out-of-home consumption, which was challenged, is drive-thru is also seeing that similar trend?

Now Drive-thru actually is a very small portion while 20% Drive-thrus are there. The second window sales is not been a substantial part. And therefore, we never reported it separately. However, to just let you know, we haven't seen any negative growth on Drive-thru.

[Operator Instructions] The next question is from the line of Percy from IFL.

I'm just trying to understand the operating leverage in your business. So since this is Q1, I'm looking for another normal Q1 where you were operating. So basically, FY '24, Q1, we saw things going up, but now things have sort of moderated either because there was some amount of event spending which has come down or there is a general demand [ tightness ], et cetera. So I'm just dialing back to your Q1 FY '20, okay? Now on a per-store basis, your sales is 20% higher than Q1 FY '20. But your margins is still the same, exactly the same as Q1 FY '20 currently. So why is it that we are not getting any operating leverage in this business. The other way I can look at it is if you want to look at something more recent then we can look at Q3 FY '22, where the sales per store is actually a tad lower than what we have done this quarter, but we had a margin of 16.6%, and now we have a margin of about 13%. So why is it? I can understand that negative same-store sales growth, et cetera. But ultimately, the sales per store should correlate to what kind of margins you are able to deliver?

Thank you, Percy. Eventually, when we talked about [indiscernible] leverage, obviously [indiscernible] gets created every year, as a result, from that standpoint because inflation obviously tough. Once in 5 years rental will increase, every year will be 2% to 3% inflation on utilities, so that key points keeps on changing. So to me, 2021, 2022 will be the best representation. However, if you look at it, we've got 40 extra restaurant with 40 extra fixed cost. So if you want to remove that fixed cost, you will see that our unit economics has relatively been stable from the last 2 to 3 years, if not more. So that's why you get the operating leverage or deleverage if this average volume goes up further you will see it coming down -- it is coming up dramatically or profitability and vice versa.

Yes. So I understand that point that there will be some inflation on a per store basis, but also, you have many cost saving programs being run. You have seen gross margins also go up in that period. So all these should more or less, if not completely offset the inflation in the per store costs? Because see, versus Q1 FY '20, it's 20% higher. So that's a 4% CAGR on a 5-year basis in your sales per store. So your costs, including your margin expansion on gross plus your cost saving initiatives have also grown at 4% on a CAGR basis over the last 5 years. That is what it means.

So I think I lost -- revealed to the numbers which you are looking at right now, maybe we can look at it and come back to you because from our standpoint, except the COVID year, a couple of years, where we have cut down on costs dramatically. We went back to our normal operating standard which was there pre 2019 and 2022 and sales obviously commensurate along with it. We haven't changed our unit economics at all. So the numbers which you have [indiscernible] we can double click on it and come back to you.

Sure, sure. So if I just forget about the past and look ahead, let's say you are at INR 61 million right now. In the past, you have done INR 66 million, INR 67 million also. Let us say, by FY '27, you go to an INR 65 million to INR 67 million kind of number, but you also have another 50 basis points increase in your royalty in FY '27. So this 8% margin on a [ pre-index ] basis, which you have done, how much can it go up to with -- so let us say it 7.5% with that 50% deducted from FY '27 to make it comparable. So the 7.5% can go up by how much 200, 300 basis points if the sales goes up by, let's say, 10% on a sales per store?

So Percy, I will answer this in a very simple format. Obviously, you know is to have this number at 70% -- 15%, 16% of EBITDA margins. And then we are going to go towards '20 -- '19 and '20 is what we've spoken about in Vision 2027. I don't think structurally anything has changed for us where we are not committed to that number. We are committed to that number. We see a very clear road map to it also. So maybe if we launch since we have connected, maybe Chintan will help you a little bit more if you want to have a deep dive on this one.

Okay. Okay. So basically, you are saying you can see about 6 to 7 percentage points margin expansion on account of leverage from the top line. I'll just connect offline on this because in the past, we have not seen that leverage coming through to this extent. So anyways, I'll take this offline.

Next question is from the line of Devanshu Bansal from Emkay Global.

My question was we have seen a sequential moderation in our SSG. So I wanted to check if this quarter per se, there was incremental impact of heatwaves, et cetera. And going into Q2, we should see relatively better sequential improvement?

Yes. So thanks for the question. What we maintained is that we expect H2 to be better and SSG do progressively get better as the years goes by like Saurabh mentioned at the beginning of the call, we've further strengthened our value platform. We're continuing to grow our off-premise business, and we are very confident that with this strategy and business model it should be progressively better.

Got it. But are you sort of satisfied with the footfall at our stores in Q1? Or there was some impact due to extra heatwave this time around?

So obviously, we are absolutely not satisfied. We wouldn't call this our best performance for sure. There were significant amount of pressures on dining while there was pressure in terms of consumption, climate or whatever you want to call it. I can't quantify it. But we've spoken about that there is also a cohort of stores which was impacted and hasn't shown progress which we expected to show progress by now. So that's how I would summarize it. And we are here to see big momentum coming back on that cohort of stores, while we put value platform in as Akshay said. And we believe we are setting up [ apples up ] for the H2 of this year to come back strong.

Got it. Saurabh, you also made a comment that your eating out frequency is now back to last year levels. How should we read this comment? Does this in any way suggest that at least in volume terms, we should see a sort of flattish kind of SSG? Is this right way to read this statement?

If you look at last year, last year, we've just hit by prices. And on October, November, December averages in volume was actually quite low. From that, normally, October, November, December is a best month in QSR. So what we have been able to get is we are far better than October, November, December, even now. So we believe that we will be able to be setting ourselves up to recover quite strongly in the H2, and you will see sequential improvement for sure. So what does it mean necessarily that I can't comment right now because the last week -- 1 week has also been raining quite heavily in most of the parts of our operations. So we cannot comment on the SSG, but what I can tell you is we believe that we are putting a very strong foundation for a strong H2.

Got it. Last question from my end. Gross margins have improved sequentially. So I wanted to understand what are the drivers for this improvement as we also launched the value chicken burger during the quarter. So if it will be helpful if you could sort of call out the drivers of this improvement?

I pass on the question to Hrushit who is our CFO.

So gross margin, predominantly there is a strong governance framework that we have been able to establish -- and incurring the margins, right, so that is adding -- what we have been able to establish is -- in terms of mitigating the entire inflation, what it also does is it gives us bandwidth in terms of supporting the initiatives like the [ busy driver ] initiatives that we have 69 initiatives that we are launching, right? So all I can say is there's a strong governance mechanism which has been put in play, the supply -- it's a very loyal supply chain mechanism which is running and which is contributing to the play.

Okay. Just a follow-up, if you can call out the date of this launch during Q1 when was this product specifically launched?

We launched our value platform at the end of June, beginning of July. It's called a McSaver 1 plus 1. And like we mentioned in the commentary, we launched our entry level chicken burger and beyond.

Okay. So this happened towards the quarter end you are saying?

Correct.

[Operator Instructions] The next question is from the line of Avi Mehta from Macquarie.

I just have 2 questions. First in the SSS growth. If you could just give us a sense of what was the SSS if you were to remove the stores...

Your voice is very muffled, we can't hear you.

Sorry, is this better? Am I audible? Is this better now, Saurabh?

Yes far better.

Yes. I just wanted to check if you were to remove the impact of these external issues, is there any sense on where the -- what is the SSS growth momentum like?

While I will not break it for you, Avi. What all I can tell you is if I remove that, there is definitely green shoots, both in terms of sequential and in terms of same store sales growth.

Okay. Okay. Let me rephrase it. Is there a way for us to get some sense on June because you alluded towards a pickup. So what's the SSS would be like in June. I'm just trying to get a better appreciation of what makes us optimistic about the green shoot and quantify to some extent?

We can't do the breakup in the call. Maybe we can be meet and you can speak to Chintan...

Okay. Okay. Just the second bit then on the margin side, Saurabh, would you believe now this weakness has been slightly longer than what we had estimated. And while we have our FY '27 or Vision 2027 targets, FY '25 could see flattish margins. Is that how I should see given the first quarter commentary and given the weakness or the pickup being more second half driven? Or how do you look at it? How do you believe we should look at this from a margin perspective?

So it will be around similar. It's not my guess is, but Avi what is most important for us is, I remember a similar time, it was COVID and we had given the Vision 2022. We bounced back and then we delivered the Vision 2022. So to me, there is a foundational stuff which is already in place and the platforms are already there. I felt we had to add a [ snacking ] value managing platform, which we have just added. So I don't see a big problem as far as the sales and profits from a long-term view as far as the long-term view is concerned. This year, we will have to manage as it come and H2 should reach on that basis, it's how we believe that.

The next question is from the line of Priyank Chheda from Vallum Capital.

Sorry to hop again, there are 2 remarks that are made in the opening comments. One is the sequential recovery. While -- what we can sense is there is a negative SSG and the decline has further worsened. The sales per unit per store has also declined. So if you can just help us, what was the sequential recovery terminology related to when you alluded to. That is question number one. And the 2 is the external issues which you alluded to, right, which is hurting your on-premise demand, while it's not hurting off-premise demand, right? While the product remained same, how would you -- I mean how do we understand the 2 different behaviors on 2 different channels for the same product, it will be...

So I'll take the first question. I'll ask Saurabh to take the second one. On the first one, what we clearly mentioned was that we saw the exit of the quarter being better in the first 2 months. And as Saurabh also mentioned in terms of the steep decline we saw last October onwards, we're already doing better from a week on week perspective, and that's what we mean by sequential improvement.

The second way to look at it also is while we report the trailing 12 months, the trailing 12 months is not actually a reflection of sequential growth because when you are in crisis your average unit volume [indiscernible] we can fall to a certain level. Jan through March was worse than [indiscernible] and then we have recovered in April, May, June. It is what we are calling sequential growth in that sense. Now typically, when I look at it, there is always range of recovery in post COVID it was dial-in which grew first, before COVID it was delivery, which used to do more than dial-in, I think this is a time -- there's a first time of recovery as far as we are concerned because we've seen a healthy pickup in terms of the units sold in the restaurant. Right now, which is driven by delivery. We foresee that it will increase though dial-in will fall.

The next question is from the line of Krishnan Sambamoorthy from Nirmal Bang Institutional Equities.

While there's been some stability in material costs, there's also been a sharp increase in vegetable costs, particularly onion and tomato in the last few months. Is this likely to hit your material cost line over the next couple of quarters? And if so, then is there a possibility of price increases going ahead?

Just a quick comment on material cost, I think there is seasonality on some of the vegetables, which is every year. I don't think anything out of normal has happened this year. There was a little bit of crisis in terms of Lettuce, which we manage quite well. We do not see any pressure as far as inflation is concerned, it was more around availability in the last quarter, but this scrape-through -- I think our supply chain stood up quite strongly to us. And we do not foresee any major changes on account of vegetable costs hitting the P&L beyond what we have already done.

Okay. On [ AUV ] growth, you mentioned price growth as the third lever that you would like to use, right? Under what sort of scenario would you be looking at a price -- possibility for price increase in the current year?

So on that one, what we've always maintained is we do scientific price increases. We're required to ensure that we sustain the cost of doing business without impacting customer inflow into our restaurants. So currently, as we always maintain, we take around 3% to 5% price increase. And usually, we stay at the lower end. So that's what we anticipate in the coming year as well.

The next question is from the line of Harit Kapoor from Investec.

My first question is just a clarification. When you mentioned June has been better. Are you also talking about that cohort where -- which was impacted by externality, or is it only on the other cohort which has been largely demand-led?

That cohort for us as expected that it has become better. We haven't seen any much movement on that cohort of stores. However, on the back of -- like Akshay said, value and snacking, we did see some green shoots emerging in the other cohorts.

Got it. Got it. Okay. Understood. And the second part was on the value offering side, do we assume that this is the first of a few things that you're going to do in this space? You obviously did the chicken burger, you have the 69 value offer as well. Is it the first of you? Or is it -- this is probably what it's going to be for the near term. The reason I ask is there is obviously a twofold impact one on gross margins as well as on -- probably on marketing spend as you push this -- as you push these offers forward? And so I just wanted to get a sense of how you're thinking about it from a slightly medium-term perspective.

Yes. So to answer the question, as we maintained, as Saurabh mentioned earlier on the call, we have always been a leader in value and what we wanted to do currently was further strengthen our value platform. So we started with the extra value meals which we launched last year, we [ produced ] and then at the end of last year with a stronger proposition. And we most recently like Saurabh said wanted to strengthen our proposition in snacking as leaders in the category. So we launched entry level chicken burger as well as 1 plus 1 McSaver meals which a McSaver snacking combos, which is not new for us, in fact, we're kind of creating a similar concept that we've done in the past. And this will also strengthen our platform, so in that sense, we feel the platform for value is already very strong, and we offer value across multiple categories, whether it's coffee, whether it's chicken burger, whether it's combination. And as we also maintain, we do a lot to ensure that our gross margin allows us to improve operating margins through operating leverage as well as through removing costs as well as laying the product mix. So that's how we looked at the current situation.

The next question is from the line of Gaurav Jogani from Axis Capital.

My question is with regards to if you dissect the growth between the ticket size or the consumer footfall, which one do you think has [indiscernible] most. And in terms of the average ticket size, if you can give us a sense whether it's flat, it's grown or how things have moved over the past quarter?

So Gaurav, as we've maintained, we don't break out the numbers, but as you can see from our results, has obviously been pressured in terms of customers entering our restaurants with the multiple reasons that we've spoken about already. And we continue to work on both bringing in customers as well as trading them up to improve our average order value, sorry. And that's how we look at dining same-store sales.

And just a follow-up to this. There is a question was in context, if you look at the pizza category as such, that has kind of seen a sequential improvement on Q-o-Q basis. So is it because of the extra abilities that is impacting you more? Or is there some loss with the competition in terms of the category? What would be your sense on this?

If look at our tracks, I don't think we've lost market share among western fast food players. In fact, if anything -- we've been strong and we've been marginally gaining share within the category. Obviously, the results everybody is seeing and some of the [ figures ] have done well, but we do not look at it for that standpoint. We would like to look at it is that from our standpoint, our [ AUV ] has to improve, our [ AUV ] in this space almost double than any other competitor. We need to continue moving the momentum on what our game is to play.

Okay. And the second question is with regards to the margins, I guess. I do really say the fact that the negative leverage is kind of eaten up the margins for you. Otherwise, on the gross front, you have done a really good job. If you can also break out what is the elevated market spend impact during the quarter because you have been very cruel in terms of the cost in other line items.

On margin front that we've always maintained is roughly around 5% for the year, and we don't break it up quarter-on-quarter. But that is where we -- usually guide towards. But in this last quarter, there was an incremental marketing spend roughly close to around 1%.

The next question is from the line of Prathamesh Dhake from Motilal Oswal.

So my question is regarding our top line. So since our SSSG is negative, our sales growth seems to be buoyed by new stores, which have been opened in the last 12 months. As a result of which revenue per store of the new stores in the last 12 months exceeds what -- exceeds the revenue per store of -- stores opened, which have a vintage more than a year. This has happened for the first time in the last 2 years. Can you tell us the reasons for the same? And are they still in the same cluster, which or -- are these on-premise stores that is contributing to our growth?

If I understand your question, right, you are asking, whether our average unit volume of the new store is better than existing store?

Yes.

No, it is similar to little lower, which has always been the case. So there is no difference. But obviously, we opened [ 40 S1s ], that was a little bit of growth, which has happened with same-store sales growth been negative. So at the growth level, some of the stores which would have partly covered for that. But are they are [ indiscernible] average, no, that's not the right assumption.

The next question comes from the line of Nihal Mahesh Jham from Ambit.

Sir, 2 questions from my side. The first was on a chicken, I think, is it that we've taken the product, the [ fried ] chicken now beyond South or it still remains the new towards the southern? And what are the plans ahead on that?

So it remains in the South, like we've always said, the reason for the launch was that in the South customer and the customer proposition of fried chicken was essential to win the meal day part, and we've done it very successfully. And as a result, we've continued to keep it in the south, and we're kind of forest and winning the proposition. And we had it in select stores in the West where we felt it was relevant, but the proposition is primarily for the South. You will shortly also see, like I said, a strengthening of the platform, we have the McSpicy fried chicken. We will be over the next quarter or 2 launching a new platform called McCrispy chicken as well, and that's going to make the platform of chicken in the south even better.

Understood. So the plan is just to keep it to South and some select West stores not to take it to the entire 400 store rollout at this point in time?

Correct.

Got that. The second question was, if I look at the last 3 years, the effort on the Gourmet launches 2 years back plus the EOTF. I thought it was in a way an effort to premiumize the brand as such. Now when I look at these value launches, is this an effort just to stimulate current demand given how the situation is? Or are these permanent launches and you're going to see more value offerings coming ahead?

Now we look at it as a brand -- as a brand as a leader in this space, we need to lead across the pricing ladder as well as the category ladder, which is why we've done burger, chicken, coffee. We've done premium stuff like EOTF, McCafe and also value is what we stand for. So it's actually all about value for money, which is not only about price. It's about the price that you get about the product quality that we deliver as well as the experience. So all of them come together and they offer the customer the best value for money. So how we looked at our premium launches, whether it be the McSpicy in the past or a gourmet launch or EOTF as a platform, it's to ensure that we're giving the best quality product and experience to the customer at the right price. And similarly, we look at the value platform as giving the customer the right value for the right product at the right price and that value, obviously, from a price point of view is lower, but it still means value for money.

[Operator Instructions] The next question is from the line of [indiscernible] Bansal from Credit [ Infoedge ].

The next question is from the line of Saurabh Kundan from Goldman Sachs.

I just wanted to ask you if internally you track your affordability, affordability of your menu versus QSR in general or like-to-like competition? And where are you now versus, let's say, your back when you start pre-launching value? And yes, so that's the first question.

Yes. Saurabh, this is Saurabh. So as far as we are concerned you would have seen that a real competition is actually us because our average volume is almost double of the competitors. So what we have to look at is, are our platforms good enough to attract consumers to our restaurants and good enough to retain them for a long time. So when you look at that mix we felt that we had to do a job as far as the value main proposition was concerned in which we launched extra value meal everyday platform, which was a 149 platform. And now we believe that's nothing, it was a price point, we needed to have to get more consumers in for snacking division. And therefore, McSaver plus is our platform as far as the snacking part is concern. So really not bothered about what competition does, what it doesn't. We would really look at things what is really value from a consumer standpoint and can we sustain. Because I don't think we have ever played that game because somebody does x price under cart, and they under cart then I under cart. I think it was long-term sustainability. One of the consideration which goes into a platform is, is it long-term sustainable. And for us, both McSaver plus and EVM platforms, which we are committed to in order to make sure its price value to our consumer.

Right. And my second question is actually around some announcements made in the budget. I just wanted to check with you if the announcements around the employment change incentives, some -- something that the government will help companies with on the ETF side. Does it impact -- I mean, does it positively impact you at all? Or it's not relevant?

So we have still -- we are in the process of analyzing in debates, right, but preliminary our assessment is we don't see a major impact flowing in from this budget into the financials.

The next question is from the line of Abhishek Kumar from Sanctum Wealth.

I have a question related to the general demand scenario. I just wanted to add [indiscernible].

Sorry, you are not clearly audible.

Am I audible now?

Yes. Better.

Ladies and gentlemen, that was the last question for the day. I now hand the conference over to the management for closing comments.

Thank you, everyone, for joining, and we look forward to seeing you in the next quarter.

On behalf of Westlife Development Limited, that concludes the conference call. Thank you for joining us, and you may now disconnect your lines.