BENGALURU/MUMBAI, May 22 -- India's quick-service restaurants (QSRs) are bracing for a challenging 2026-27 after a weak 2025-26, as rising energy costs stoke inflation and weigh on discretionary spending, pressuring growth and margins. Looming headwinds and inflationary pressures across energy, labour and commodities could squeeze margins in the coming quarter, said Jubilant FoodWorks Ltd, India's largest QSR operator and franchisee of Domino's Pizza, after reporting its March-quarter and FY26 results on Wednesday. "We are entering a near-term inflationary environment," said Sameer Khetarpal, managing director and chief executive of Jubilant Foodworks, during the fourth-quarter earnings call. The remarks reflect a broader challenge facing QSR chains. After spending much of FY26 driving traffic through affordability measures and promotions, they now must balance sustaining demand with rising operating costs. Jubilant spent much of FY26 chasing growth and market share through affordability measures such as lowering the minimum order value for deliveries from Rs.149 to Rs.99. So did its peers. QSR operators leaned on value meals, lower-priced offerings and promotions to retain consumers who are cutting back on discretionary spending. Experts said lower-priced meals and combo offers are likely to remain central to growth strategies as consumers become more price-sensitive. "Low-priced stock keeping units will help drive online volume growth and increase order volumes," said Madhur Singhal, managing partner, consumer and internet at Praxis Global Alliance, although he cautioned that traffic itself is often driven by broader factors such as consumer sentiment and spending patterns. Khetarpal said energy-related costs alone could shave 100-120 basis points off margins, while higher minimum wages and new labour regulations could add further pressure. "The consumer inflation goes up in the market of wage inflation." For the FY26, Jubilant FoodWorks reported a consolidated net profit of Rs.444.24 crore (up ~104% year-on-year) and a consolidated revenue from operations of Rs.9,512.51 crore (up ~17.4% on-year). Shares of Jubilant fell as much as 8% on Thursday as Domino's Pizza reported like-for-like (LFL) growth of 6.5%, down from 7.5% the year before. LFL growth refers to the revenue growth of mature restaurants that were open before the previous fiscal year. Devyani International Ltd, which operates KFC and Pizza Hut outlets, described FY26 as a difficult operating year. "This year has been a defining one for Devyani International, a year in which we navigated a challenging operational environment," said its chairman, Ravi Jaipuria. Devyani International-run KFC business delivered its strongest performance in the last 14 quarters in the March quarter, reporting a 4.9% same-store sales growth (a measure similar to LFL). However, for FY26, the same-store sales declined 0.8%. Its Pizza Hut business saw its same-store sales decline 3.7% during the quarter. The company said the impact of the gas crisis continued to linger, but operational disruptions remained limited. Sapphire Foods India Ltd, another franchisee of Yum! Brands, Inc., the parent of KFC and Pizza Hut, estimated that higher liquefied petroleum gas (LPG) prices could lead to a 25-40% increase in costs, translating into a 30-50 basis point hit to Ebitda margins. Ebitda is short for earnings before interest, taxes, depreciation and amortization. "The bigger challenge right now is the LPG price," said Vijay Jain, executive director and chief financial officer of Sapphire Foods India, adding that the company managed to contain disruptions despite supply constraints. "While availability was a challenge, I think we've been able to manage the situation quite well," Jain said, adding that KFC saw "zero closures", while only a limited number of Pizza Hut stores faced temporary disruptions. The promoters of HT Media Ltd, which publishes Mint, and Jubilant Foodworks are closely related. There are, however, no promoter cross-holdings....