Highlights of the call

Revenue growth 14% year-over-year to Rs 262.3 crore riding on the strong performance of its subsidiary, Hardcastle Restaurants Pvt. Ltd. (HRPL). SSSG at four-year high of 8.7% for the quarter as against positive 3.4% in the same quarter last year. Operating EBIDTA stood at Rs 14.8 crore, recording a growth of 36%. Profit After Tax at Rs 2.2 million

3 new restaurants and 10 McCafés inaugurated in Q1FY18 taking total count to 261 and 121 respectively

Value price product introductions such as happy price combo and chicken kebab burger received healthy consumer response and helped drive increase in customer footfalls

McCafe format delivered the highest daily sales since its inception in India

The McDelivery format also saw continued sales traction, with volumes growing above 60%.

SSS growth was volume-led with pricing remaining flattish.

SSG – last price hike taken was minor in Jan 2017 and no price hike in Q1 FY18.

Happy price combo has played big role in delivering good SSG growth.

Post GST, the company has implemented uniform pricing across all its stores in India. It has also implemented all-inclusive pricing across its restaurants

Despite witnessing increase in input costs across few products such as tomatoes, it chose to maintain pricing with a view of absorbing these costs currently and gaining when the costs reduce

Increase in minimum wages in Karnataka in Q4 FY17 continued to weigh on employee costs, resulting in 24% increase in employee costs in Q1 FY18.

Operating costs to remain under control going forward as more stores are brought under the low-cost ROP 2.0 platform.

ROP 2.0 – working very well for us. The company had positive cash flow in FY17 . The company do expects to see continue gain from ROP 2.0 platform

Plans to re-image 20-25 stores every year. In next2 years it will complete all old restaurant re-image.

It expects to incur capex of Rs 100-120 crorein FY18 on the store additions/ store revamp.

The company intends to fund its capex requirements largely through cash flows generated during the year.

Growth in Q2 FY18 may be subdued due to disruptions caused by GST implementation.

Management is confident of sustaining the current growth momentum and it expects to deliver mid to high single-digit SSS growth in FY18.

The company intends to add 25-30 stores in FY18. Intends to reach 450-500 stores by FY22.

McCafe - targets to reach 140-150 stores in FY18 from 121 currently.

Brought debt down in Q1.