While the troubles facing these stocks are not new, the ongoing crisis has only deepened the losses. Sapphire Foods India, which operates KFC and Pizza Hut outlets, has seen its share price fall 12% this week. Devyani International, set to merge with Sapphire to create a single Yum franchise in India, slipped 4% on Friday. Jubilant FoodWorks, the operator of Domino’s and Dunkin’, has lost about 4% over the same period, while shares of Westlife Foodworld (McDonald’s franchisee) have declined 4%. Meanwhile, Restaurant Brands Asia (RBA) has fallen around 3% week-on-week.
The impact on restaurants across the country is already visible as media reports suggest rapid closures. Though these QSR companies have not flagged any likely disruption in operations, so far, brokerage firm JM financial has warned that a prolonged crisis in LPG availability could pose operational challenges for those QSRs where cooking processes depend heavily on gas-based kitchens.
The risk has surfaced as the conflict in West Asia begins to disrupt fuel supplies, pushing restaurants to reassess operations, cooking methods and menu strategies, JM noted.
“For QSR operators such as Westlife FoodWorld, Devyani International, Sapphire Foods India and RBA (Restaurant Brands Asia), the immediate concern pertains to higher kitchen operating costs and the probability of store closures in certain micro markets, which could temporarily affect outlet operations and restaurant-level margins,” the brokerage note added.
However, ElaraCapital sees lesser impact of the LPG shortage on QSR chains compared to non-QSR based restaurants, citing that the QSR companies have minimal dependency on LPG and rely on electric ovens and fryers. In fact, it sees them benefitting due to a consumer substitution effect from LPG-dependent cuisine to QSR format.Also read: As Iran Israel crisis clouds outlook for tile makers, what is next for Cera, Kajaria, Somany after 26% slide?
Weak investor appetite
Restaurant Brands Asia, which operates Burger King remains the only exception. Its shares have managed positive returns of 2% over a one-year period, nearly matching Nifty’s 3% returns in the same period.
Sapphire Foods shares are down 47% in the past 12 months, Westlife Food 36% lower while Jubilant and Devyani have plunged, 27% each.
The institutional appetite for QSR stocks has also taken a beating with Foreign Institutional Investors (FIIs) offloading stakes.
FII holding in Sapphire Foods fell 210 bps sequentially in the December quarter while recording a 90 bps decline in Westlife Food in same quarter. In Jubilant and Devyani, foreign stakes dropped by 150 bps and 80 bps, respectively.
The worst happened with Restaurant Brands Asia, where holding declined by 380 bps.
Also read: ONGC, Oil India shares outperform sector with double-digit gains in 2026. Will Iran-Israel crisis fuel more upside?
Earnings snapshot
Earnings cut a patchy picture with Devyani widening its consolidated December quarter losses to 10 crore though revenue growth stood 12% YoY to Rs 1,453 crore. The Q3 net profit for Westlife Food fell 86% though total revenue saw a 3% YoY uptick.
Jubilant reported strong set of numbers with profit after tax (PAT) growing 65% to Rs 71 crore while topline rising by 13%. As for RBA, YoY losses narrowed to Rs 7 crore versus 19 crore in Q3FY25 riding on 18% jump in revenue.
What should investors do?
Sudeep Shah, Vice President & Head of Technical and Derivative Research Desk at SBI Securities said QSR stocks have been under significant pressure over the past year and the recent weakness cannot be attributed solely to the LPG shortage concerns. Technically, most of these stocks were already in well-established downtrends, he said, adding that the current crisis has merely aggravated existing weakness rather than causing it.
“Sapphire Foods has been declining since October 2025 and continues to trade well below its key moving averages. Westlife Foodworld is exhibiting a classic lower-high, lower-low structure, with the MACD line positioned below the zero line, indicating sustained bearish momentum. Jubilant FoodWorks remains in a strong downtrend with the RSI languishing around 22, reflecting oversold but weak sentiment. Meanwhile, Devyani International has slipped close to its IPO levels,” Shah said.
His advice to investors is to avoid bottom-fishing and wait for clear signs of fundamental and technical improvement before considering exposure to the QSR space.
Also read: As crude oil price breaches $100 mark, Systematix recommends RIL, a potential multibagger and 4 more stocks to buy(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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