North and east business steps up investment in stores and digital infrastructure, targets Rs 2,000 crore revenue by FY27
McDonald’s India is stepping up its expansion plans in the north and east, committing around $80 million over the next two-and-a-half years towards new restaurants, technology and digital infrastructure. The investment comes as competition in India’s quick-service restaurant (QSR) market intensifies and rising food, packaging and transportation costs put pressure on profitability.
The investment will be the company’s largest in a two-year period, Sanjeev Agrawal, Chairman of McDonald’s India (North & East), told The Economic Times. The business, operated by Connaught Plaza Restaurants (CPRL), will fund the expansion internally through its group companies and family offices.
The company has already invested around $175 million in the business. Its increased spending reflects confidence in India’s consumption potential and the opportunity to strengthen its position against competitors, including KFC operator Devyani International and Burger King.
CPRL, which was acquired by MMG Group in 2020, currently operates more than 320 restaurants across north and east India. It aims to increase this number to over 500 by 2028. The expansion will include conventional outlets as well as drive-through restaurants, highway locations and stores at government-operated fuel stations.
The company expects revenue to reach Rs 2,000 crore in FY27, compared with Rs 1,695 crore in FY26. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) margin is projected at 12%, according to regulatory filings.
However, the expansion comes against a challenging cost environment. Higher prices of cooking oil, packaging materials and transportation, partly linked to the West Asia crisis, have increased operating expenses and affected margins.
Agrawal said the company had so far avoided price increases to protect its value positioning and retain price-sensitive customers. However, prolonged inflation has made the existing cost structure increasingly difficult to sustain. The company is now considering marginal price increases on selected products, while ensuring that its affordable offerings remain accessible.
Maintaining value for consumers while protecting profitability will be a key challenge as the business expands. The QSR market is becoming increasingly competitive, with established international brands and domestic players investing in new outlets, promotional offers and digital ordering platforms.
Digitisation is therefore another important part of McDonald’s investment strategy. Improved technology and digital capabilities are expected to support customer convenience, operational efficiency and a stronger restaurant network.
The expansion also reflects the broader importance of India to McDonald’s global growth strategy. At its September 2026 Investor Day, the global company announced an $8.5 billion franchisee support package to accelerate growth across franchise-led markets, even as sales growth in some developed Western markets remains subdued.
For McDonald’s India, the next phase will involve expanding its physical footprint without compromising affordability or financial performance. With a target of 500-plus restaurants and Rs 2,000 crore in revenue, the north and east business is preparing for an aggressive growth phase, even as inflation continues to test the economics of the QSR industry.