Hardcastle Restaurants, a development licensee of American burger chain McDonald's Corp for the south and west of the country, will double its store count over the next two years.
Having been around in India for 17 years, Hardcastle merged into a listed group company, Westlife Development , six months ago and may look to raise funds through a qualified institutional placement (QIP) or a follow on public offer (FPO) going ahead, Amit Jatia, vice-president , Hardcastle Restaurants, told TOI in an interview. This aggressive rollout will parallel the moves by McDonald's biggest competitor Yum! Brands, which aims to open 1,000 stores and clock a billion-dollar revenue across its brands KFC, Pizza Hut and Taco Bell by 2015 in India. "Having opened only 60 restaurants in the first eight years, and taking it up by 80 in the six years thereafter, now we are looking at doubling the current base by financial year 2015," Jatia said. In 2011, Hardcastle acquired the 50% stake held by the American parent, giving it full financial control to speed up expansion. Hardcastle had 105 restaurants during the financial year 2010-11 and currently has 161.
"The McDonald's India story can be broadly categorized as 'build, grow, accelerate' . The emphasis initially was more on building and making our backend robust, and then we focused on expanding our footprint by introducing different business models, menu and price innovations; but now, we are in a phase where we are looking at expanding stores in a big way," Jatia said. "Over the past two years, as we moved into the acceleration phase, we have seen our business grow significantly," Jatia said.
"This resulted in an increase in our sales from Rs 379 crore to Rs 681 crore in FY13, as we clocked almost an 80% growth over the past two years alone," he said. "We need capital to increase our store count and we are evaluating various ways to raise that money, but currently we are not starved for cash. The move to merge with a listed entity was so that we have the option to get in investors and growth does not stop because of the lack of capital. Also, investors now have an opportunity to be part of the growth story of McDonald's in India."
The Indian restaurant industry is valued at $9billion and is expected to become a $16-billion market by 2016, according to National Restaurant Association of India, and a big chunk of this will be driven by QSR brands. "The long-term growth story is intact despite the immediate challenges of high inflation , real estate concerns and input costs going up. The rising propensity among young Indians to go out and eat will fuel the growth of players like McDonald's ," said Gautam Duggad, VP, Research (FMCG & Retail), at Motilal Oswal Financial Services.
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Commis II Indian - Jobs in India