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Costa Coffee’s India operations brewed strong growth in FY25, with the British coffee chain’s revenue rising nearly 31% year-on-year to ₹198.5 crore, driven largely by rapid store expansion. However, the growth came with a slight dip in profitability margins, impacted by rising input costs.
According to the latest annual report by franchise partner Devyani International Ltd (DIL), Costa Coffee’s net profit climbed 28.4% to ₹149.7 crore in FY25, up from ₹116.6 crore the previous year. The chain expanded its footprint aggressively, growing its number of outlets from 179 to 220 over the fiscal year.
Despite the topline growth, the company saw a marginal decline in its gross margin, which fell to 75.4% from 76.8% in FY24. DIL attributed the decline to inflation in coffee bean prices and other raw materials. Brand contribution margin also slipped slightly to 16.1% from 17%.
Average daily sales per store dropped to ₹27,000 from ₹33,000, reflecting a moderation in same-store sales growth (SSSG), which halved from 8.7% to 4.1% over the same period.
Costa Coffee’s India operations are part of the chain’s global strategy to push deeper into high-growth emerging markets. Owned by beverage giant Coca-Cola, the brand has set ambitious targets for the country.
“India is poised to become one of Costa Coffee’s top five global markets within the next five years,” DIL said, citing a cultural shift in beverage preferences among Indian consumers—especially Gen Z and millennials—who are increasingly favoring premium coffee.
Earlier this year, Costa Coffee’s global CEO Philippe Schaillee reaffirmed the company’s focus on India during a visit, calling it a “high-potential market” and part of the company’s top 10 globally.
DIL said Costa Coffee plans to open 40–50 new outlets annually in India, with a focus on high-footfall locations such as airports and multiplexes. The domestic café market is growing at a robust 10–12% annually—nearly double the pace of global markets.
Costa Coffee faces stiff competition in India from both global players like Starbucks, McCafé, Tim Hortons, and Dunkin’, as well as homegrown chains such as Café Coffee Day, Blue Tokai, Third Wave Coffee, and Barista.
(Source: PTI)
