McDonald's India, subsidiary of the Chicago-headquartered fast food giant - McDonald's Corp., finally reported net profit for the FY2017-18 after 22 years of business in India.
According to its latest filings with the Registrar of Companies of India, the company reported a net profit of INR 65.2 lakhs (approx. USD 93,083) compared to net loss of INR 305 crore (approx. USD 43,549,638) a year ago. The company further said in its filing that it has not only been able to stem further erosion of its net worth, its also been able to successfully reverse the trend of erosion through the infusion of fresh capital.
Recording a y-o-y growth of ~8%, the company reported a total income of INR 119.60 crore earned mostly through royalty income. This revival happened amidst a long-drawn legal dispute with one of its key licensee partners.
McDonald’s entered India in 1996 and since then has reported an accumulated loss of ~INR 421 crore.
McDonald's operates in the country through a master franchisee structure with its two partners – Connaught Plaza Restaurants (CPRL) and Westlife Development.
According to analysts, with the total sales of quick-service restaurants in India expected to reach $21.6 billion by 2022 after growing by 9.2%, the company can further improve its performance in India in the years ahead. Further, with the western fast food market accounting for just 1.3% of the overall eating-out market, it is expected to grow the fastest -- by 13.4% to reach $1.8 billion in 2022.
The eating-out market in India, which is dominated by disorganized players, is expected to reach $131 billion by 2022.