Burger and fries chain McDonald’s entered India more than two decades ago, has posted its first profit during year-to-March 2018. The company has two partners in two partners in the country — North & East Business is operated by Connaught Plaza Restaurants (CPRL) while WestlifeNSE 0.00 % Development is the master franchisee in the western and southern markets. It entered India in 1996, and over the years, an accumulated net loss of Rs 421 crore.
As per the latest filings with the Registrar of Companies, the local unit of Chicago-headquartered fast-food giant posted a net profit of Rs 65.2 lakh during FY17-18, compared with a net loss of Rs 305 crore a year ago.
McDonald’s India said, “The company has not only been able to stem any further erosion of its net worth but has also been able to successfully reverse the trend of erosion through the infusion of fresh capital.”
In this year, the company allotted shares worth Rs 71 crore to the parent company. Also, the authorised capital was increased by Rs 50 crore to Rs 458 crore.
The latest filings said its investments in the licensee partner were impaired and accordingly a provision of Rs 198.2 crore has been considered in the financial statements for diminution in value of investments in CPRL.
It is expected that the eating-out market in India will reach $131 billion by 2022. The total sales of quick-service restaurants are estimated to grow by 9.2% to reach $21.6 billion by then.