Gourmet Gateway (GOURMET) Q2 FY27 Profit Triples as Kylin Out-Earns Barista
The food service group's quarterly net profit surged to ₹2.18 crore, driven by a 290-bps margin expansion and a shift in profit mix toward its Kylin brand.
Gourmet Gateway India's Q2 FY27 profit jumped 304% year-on-year to ₹2.18 crore. Revenue grew 15.9%, but the real story was a sharp margin expansion, with the Kylin brand becoming the group's top profit contributor.
For Gourmet Gateway India, the September quarter was about quality over quantity. Revenue grew at a steady pace, but profit exploded as the group's newer, more profitable formats began to decisively tilt the scales.
The numbers show a clear path to profitability. Revenue rose 16% year-on-year to ₹54.95 crore, while net profit surged 304% to ₹2.18 crore. The net profit margin expanded to 4.0%, a 290-basis-point improvement from the same quarter last year.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 54.95YoY +16% | 53.49 | 47.42 |
| Profit (₹ Cr) | 2.18YoY +304% | 1.16 | 0.54 |
| Net Profit Margin | 4.0%YoY +264% | 2.2% | 1.1% |
The Kylin Surprise
The standout was the Kylin brand, which became the group's top profit generator. According to a Multibagg.ai report, Kylin delivered a profit of ₹1.31 crore on revenue of ₹23.31 crore. This edged out the legacy Barista chain, which earned ₹1.12 crore on a larger ₹31.79 crore revenue base. Kylin's superior profitability suggests a more efficient operating model is taking root.
How Margins Expanded
Profit growth far outpaced sales due to significant operating leverage. Total expenses rose only 9.9% against the 15.9% revenue increase, as reported by Scanx.trade. This drove the EBITDA margin to 19.5%, a 230-bps year-on-year jump. Lower finance costs also helped, falling nearly 10% from the prior year.
The group's store network grew to 569 outlets, adding 73 stores over the year. A Multibagg.ai analysis noted that all net additions came from the Barista brand, which expanded from 475 to 548 stores. Kylin's store count remained at 17, meaning its 21% revenue growth was purely from higher same-store sales.
The Financial Backdrop
This operational improvement sits against a challenging financial structure. The company's debt-to-equity ratio stands at 1.27, and its current ratio is a tight 0.77, indicating potential working capital pressure. The stock has fallen over 43% in the past year, and at a P/E of 70.8, it trades at a steep premium to the industry.
Management has not provided formal guidance, but the quarter demonstrates a clear strategic shift. The focus is moving from pure store-count growth at Barista to maximizing profitability from its existing portfolio, with Kylin leading the charge.
Key Points
- Net profit surged 304% year-on-year to ₹2.18 crore, driven by a 290-bps expansion in net profit margin./n- The Kylin brand emerged as the top profit contributor, earning ₹1.31 crore and outperforming the larger Barista chain.
- Operating leverage was key, with expenses growing slower than revenue, pushing the EBITDA margin to 19.5%.
- The group's valuation remains elevated despite a significant share price decline over the past year.
Hexa Perspective
The quarter marks a tangible shift from growth to profitability for Gourmet Gateway. The success of the capital-light, high-margin Kylin format is the most positive signal, showing the group can generate cash without relentless store expansion.
The sustainability of this margin expansion is the critical question. It must withstand industry-wide cost pressures, including potential menu price hikes flagged by restaurant associations. For the stock's premium valuation to hold, Kylin's outperformance must become a trend, not a one-quarter event.
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