Indian Restaurant Industry | What’s On Your Menu?
The Indian restaurant industry is worth Rs.75,000 crores and is growing at an annual rate of 7%. The industry is highly fragmented with 1.5 million eating outlets, of which a little more than 3,000 outlets form the organized segment. However, the organized segment is rapidly growing at an annual rate of 16%. Quick service segment is the clear winner in the eating out market with a growth rate of 21%.
Organized Segment is expected to reach Rs.22,000 crore by 2017, driven by:
- Rising disposable income
- Nuclear family structure
- Increasing working population
- Rapid urbanization and consumerism
- Increased private equity interest
Segment | Market Size (Rs Cr) | Expected Growth Rate |
Quick service Resturants | 4675 | 21.5% |
Casual dining | 2365 | 11.9% |
Cafes | 1265 | 12.3% |
Fine dining | 1045 | 12.0% |
Pubs, bars, clubs and lounges | 963 | 11.0% |
"Indians on an average eat out lesser than 2 times a month, compared to 40 times in Singapore. Even a small increase in this number provides a huge market opportunity for restaurants in India."
Brands By Segments
- Quick Service Restaurants (QSR): Domino's, KFC, McDonalds
- Casual dining restaurants: Pizza Hut, Yo! China, Sagar Ratna
- Cafes: Cafe Coffee Day, Barista Lavazza, Costa Coffee
- Fine Dining Restaurants: Mainland China, Sahib Sindh Sultan, Copper Chimney
- Pubs, bars, clubs, lounges: Hard Rock Cafe, Xtreme Sports Bar, TGIF
Key Private Equity (PE) & Venture Capital (VC) Firms which have invested in the Restaurant Industry
- NSR: Coffee day (360cr), Adiga’s (200cr), Ohri’s (200cr)
- India Equity Partners : Sagar Ratna (180cr)
- SAIF Partners: Specialty Rest. (120cr), Ammi’s Biryani (40cr)
- Everstone Capital: Pind Balluchi (110cr)
- ICICI Venture: Devyani Intrnl–Pizza Hut, KFC, Costa (250cr)
- Aditya Birla PE: Olive Bar (54cr)
- Premji Invest: JSM Corp-HRC, Shiro, CPK (130cr)
- TVS Capital: Om Pizza (50cr), Indian Cookery-Yellow Chili
- Helion Venture: Mast Kalandar (33cr), Booster Juice (16cr)
- Sequoia Capital: Faaso’s (28cr)
- VenturEast: Goli Vadapav (26cr)
- IncuCapital: Steammo (40lakhs)
- Matrix India: Yo! China (27cr)
- Accel Partners : Kaati Zone
For a 30-40% stake, a typical PE investment is Rs.150-200 crores and a typical VC investment is Rs.20-30 crores. Funds are used for brand building, to open new outlets, standardize, and to expand to other geographic locations.
India |
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Segment |
Companies |
EV*/Revenue |
EV/EBITDA** |
Fine Dining Restaurants |
Speciality Restaurants |
3.8x |
19.6x |
Quick Service Restaurants |
Jubilant FoodWorks |
5.8x |
31.7x |
Worldwide |
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Segment |
Companies |
Median EV/Revenue |
Median EV/EBITDA |
Fine Dining Restaurants |
China Bistro, Cheesecake Factory and 3 other restaurants |
0.9x |
7.7x |
Casual Dining Restaurants |
Darden Restaurants, Buffalo Wild Wings and 15 other restaurants |
1.0x |
7.8x |
Quick Service Restaurants |
Domino's, Yum! Brands, McDonalds & 7 other restaurants |
2.1x |
9.9x |