McDonald’s India bets big despite cost heat

In a bold move, McDonald's India has significantly increased its investments in its north and east operations to about $80 million over the next two and a half years. This surge in funding aims to expand store presence and enhance digital capabilities to cater to growing consumer demand. The company is also preparing for rising competition from rivals like KFC's Devyani International and Burger King.

However, McDonald's India anticipates continued pressure on profitability due to escalating food and packaging inflation. Chairman Sanjeev Agrawal disclosed that this will be the highest investment the company has made in this two-year period, with future funds also being internally sourced from group companies.

The north and east business, operated by Connaught Plaza Restaurants (CPRL), was acquired from McDonald's Corp in 2020 following a lengthy legal battle between the two entities. CPRL is expected to achieve revenues of ₹2,000 crore by the end of FY27, up from ₹1,695 crore in FY26, alongside a 12% Ebitda. The company currently operates over 320 stores and aims to reach 500 stores by 2028, incorporating drive-through, highway, and government-run fuel station outlets.