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Voice of the Head – Focusing on value/own app to revive SSG

We recently met the management of Westlife. The management highlighted its renewed focus on value, marketing, and ramping up of own digital assets to revive SSG. Leveraging cost-savings across distribution/operations and with the ongoing investments in its own app, Westlife is thoughtfully upping its value game and ensuring quick 20-minute own deliveries (vs aggregators) in specific pockets of its network. While near-term consumer sentiment remains weak, we believe the company’s focus on value and faster deliveries with its own app is the right strategy, as a similar strategy did drive a big outperformance for JUBI (TTM). Westlife also reassured about its market share and attributed the low growth over FY23-H1FY26 (~5%) to weak sentiment among mass consumers and lower participation in excessive discounts across aggregator platforms. Westlife retained its ‘Vision 2027’ outlook, the lower-end of which implies a high-teen revenue CAGR and ~200bps of annual margin gain; however, we remain conservative, with ~14% topline CAGR and ~100bps of annual margin gain over FY25-28E. Prolonged weakness led to 8-12% correction in our EBITDA estimates, which, however, are completely offset by earnings rollover. We retain ADD with an unchanged TP of Rs725 (30x Dec-27E EBITDA), as we believe the near-term weakness is more than factored into the ~30% price correction in CY25TD.

McDelivery’s expansion and AI-led tools to strengthen growth foundation

During the 2QFY26 call, Westlife announced that it had partnered with a global consulting firm and was investing in enhancing its own McDelivery platform. Its focus areas include app upgrades, improved data architecture, and targeted marketing initiatives, which are relevant to young consumers. The company’s pilot 20-minute delivery program— currently live in Mumbai, Pune, and select areas of Bengaluru as per checks—has received strong customer response, with most orders now fulfilled within the 20-minute window. With these initiatives, Westlife expects McDelivery revenue to double over the next 1–2 years, contributing an incremental 3–5% to SSG. Westlife believes the ramp-up of its own delivery infrastructure would largely contribute incremental revenue (vs a shift from aggregators), as the focus is on increasing the frequency of existing app users as well as leveraging the data accumulated from digital sales at stores (loyalty, SOK). Additionally, Westlife has deployed a new AI/ML-powered location intelligence platform to optimize site selection, with 70-80% of the new openings surpassing initial expectations.

Increased focus on the South market to yield positive results

Westlife is currently seeing divergent growth trends across regions. While the West continues to see robust growth, the South continues to underperform, driven by subdued mass-market consumer sentiment and lower participation in excessive discounting on aggregator platforms. In response, Westlife has undertaken leadership/team investments to enhance execution discipline; the company sees scope for a rebound, aided by its renewed focus on value and improved connect with young consumers, along with strong marketing support

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