Indian QCR Industry To Grow By 20-25 Percentage In FY24: ICRA

The quick service restaurant (QSR) sector in India has been on an upward trajectory in recent years, and this trend is set to continue in the current fiscal year, according to a report by ICRA, one of India's leading rating agencies. ICRA predicts that the sector will grow by 20-25% in the current fiscal year, driven by factors such as rising demand, increased market penetration, and expanding shop networks.

ICRA's report states that the top five players in the domestic QSR market are expected to open an additional 2,300 stores between FY23-FY25, with an estimated capital expenditure of US$ 707 million (Rs. 5,800 crore) during this period. This expansion is expected to fuel the sector's growth and help QSR brands establish a stronger presence in the market.

The report further highlights the long-term growth prospects for the QSR sector in India, citing factors such as increasing QSR penetration rates, a shift from the unorganised to the organised segment, and a preference for branded QSR players, given the convenience and hygiene factors associated with delivery over dine-in options. These factors are expected to support revenue growth for QSR brands in the coming years.

Mr. Suprio Banerjee, Vice President and Sector Head of Corporate Ratings at ICRA, also commented on the expected capex boom in the QSR business. He stated that favourable demographics, India's gradual urbanisation, rising per-capita gross domestic product (GDP), and greater headroom for QSR penetration compared to a developed nation like the US are all contributing factors. According to Mr. Banerjee, the capex over FY23-FY25 has been estimated at around approximately US$ 219.4-243.8 million (Rs. 1,800-2,000 crore) per annum, which would be around 2.5 times that of the levels seen in FY20.

The QSR sector in India has seen significant growth in recent years, with several international brands expanding their presence in the market. The trend towards home delivery and online ordering has also contributed to the sector's growth, with many QSR brands investing in their digital capabilities to meet changing consumer demands. With favourable demographics and a growing market, the QSR sector in India is expected to continue its upward trajectory in the coming years.

The QSR sector in India is set to experience significant growth in the current fiscal year, driven by rising demand, increased market penetration, and expanding shop networks. The long-term prospects for the sector are also positive, with factors such as increasing QSR penetration rates and a shift towards branded QSR players supporting revenue growth. The expected capex boom in the QSR business due to favourable demographics and India's gradual urbanisation further adds to the sector's growth potential.

What is ICRA?

ICRA (Investment Information and Credit Rating Agency) is one of the leading credit rating agencies in India, providing credit ratings, grading, and consulting services to a wide range of industries. Established in 1991, ICRA is headquartered in Gurgaon, Haryana, and is a subsidiary of Moody's Investors Service. ICRA's credit ratings help investors and other stakeholders assess the creditworthiness of companies and their ability to repay their debts. The agency rates a wide range of financial instruments, including bonds, debentures, commercial paper, and fixed deposits. Additionally, ICRA provides grading services to assess the performance of companies in various industries such as infrastructure, power, textiles, and hospitality. ICRA's credit rating services are recognized by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI), and the agency is accredited by the International Organization of Securities Commissions (IOSCO). Overall, ICRA is a trusted and reliable source of credit ratings and financial analysis in India, with a long-standing reputation for excellence in the field of credit rating services.

QSR stands for Quick Service Restaurant. It is a type of restaurant that specializes in providing fast, convenient, and affordable food to customers. QSRs are known for their speedy service, limited menus, and often focus on popular items like burgers, fries, and soft drinks. QSRs are designed to serve food quickly, and they usually have a simple menu with items that can be prepared and served in a matter of minutes. This means that customers can order, pay, and receive their food quickly, without the need for table service or a lengthy wait time. Examples of popular QSR chains include McDonald's, Burger King, KFC, Subway, and Taco Bell. These chains often have a strong brand recognition and are located in high-traffic areas such as shopping malls, airports, and busy city centers. QSRs have become increasingly popular in recent years, as busy consumers seek out fast and convenient options for meals on-the-go. With their focus on speed, affordability, and convenience, QSRs have become a staple of the modern fast-food landscape.

Who is Suprio Banerjee?

Who is Suprio Banerjee? Suprio Banerjee is the Vice President and Sector Head of Corporate Ratings at ICRA, one of India's leading credit rating agencies. With over 20 years of experience in credit ratings, risk management, and financial analysis, Banerjee is a seasoned professional in the field of credit rating services. At ICRA, Banerjee is responsible for managing the corporate ratings portfolio, including overseeing credit ratings for a wide range of industries such as telecom, media, automotive, engineering, and construction. He is also responsible for managing relationships with key stakeholders, including issuers, investors, and regulatory bodies. Prior to joining ICRA, Banerjee worked in various roles in the credit rating industry, including at CARE Ratings and Crisil. He has also worked in the banking sector, where he gained experience in credit risk analysis and credit underwriting. Banerjee holds a Bachelor's degree in Mechanical Engineering from Jadavpur University and a Postgraduate Diploma in Management from the Indian Institute of Management, Bangalore. With his extensive experience and expertise in credit ratings and risk management, Banerjee is a valuable asset to ICRA's team of professionals.

News Conclusion: The QSR (Quick Service Restaurant) sector in India has been growing rapidly in recent years, driven by factors such as a growing middle class, increasing disposable incomes, and changing consumer preferences for fast, convenient, and affordable food options. The COVID-19 pandemic, however, has had a significant impact on the sector, with many QSRs temporarily closing or scaling back operations due to lockdowns and restrictions on dining out. Despite the challenges posed by the pandemic, the QSR sector in India is expected to continue its growth trajectory in FY24. This growth is expected to be driven by factors such as increasing urbanization, the rise of e-commerce and digital platforms, and the growing popularity of food delivery services. Several QSR chains in India have also announced plans for expansion and investment in the sector. For example, McDonald's India plans to invest around INR 700 crore to open 200 new outlets in the country over the next few years. Similarly, Burger King India plans to open around 700 restaurants in India over the next decade. Overall, the QSR sector in India is expected to continue its growth trajectory in FY24 and beyond, driven by changing consumer preferences, urbanization, and increasing investment by QSR chains. However, the sector will continue to face challenges such as rising competition, changing consumer preferences, and regulatory hurdles, which will require QSRs to adapt and innovate in order to stay ahead of the curve.

Important News and Blog Tags for Readers

Quick Service Restaurant sector in India

Investment Information and Credit Rating Agency 

Mr. Suprio Banerjee, Vice President and Sector Head of Corporate Ratings at ICRA

Growth prospects for the QSR sector in India

Revenue growth for QSR brands

Securities and Exchange Board of India (SEBI)