Costa Coffee in India had a busy year. Sales shot up by over 30%, touching nearly ₹198 crore in FY25. People are walking into more stores, and more stores are popping up in new places. But there’s a flip side too—profits didn’t grow as fast, mainly because costs went up.
Let’s break it down.
Sales Are Climbing
Costa Coffee made about ₹198 crore in FY25. That’s a solid jump from ₹152 crore the year before. Just in the last three months of FY25, the brand pulled in ₹52 crore. Compare that to the ₹45 crore from the same period last year, and it’s clear more people are buying Costa drinks.
What’s driving this? Part of it is better performance from existing outlets. But the big push came from new stores.
New Stores, New Reach
The company added 41 new stores during the year. That brings the total to 220 locations across India. More shops mean more chances to reach customers. In the last quarter alone, 11 new stores were opened.
The brand is clearly going after growth. And it’s working.
But expansion isn’t cheap. Running more shops means spending more—on rent, staff, and ingredients. That’s where the margin story comes in.
Margins Are Slipping a Bit
Even though sales are up, profits haven’t kept pace. Gross margin for the full year stood at 75.4%. That’s a little below last year’s 76.8%.
For Q4, margin was at 68.5%, just under the 68.7% in the previous quarter. It’s not a crash, but it’s noticeable. Costs are pushing back. Coffee beans, milk, oils—everything costs more now.
Higher input prices are cutting into what the company gets to keep.
Profits Still Holding Ground
Despite rising costs, Costa Coffee didn’t fall apart. Brand-level profit, called contribution margin, stayed at 16.1% for the full year. That’s just a step down from 17% a year earlier. But in Q4, things looked slightly better—up to 17.6% from 16.9% in Q3.
So even with cost pressure, Costa kept its business in shape.
Looking at Devyani International’s entire portfolio—KFC, Pizza Hut, and Costa—the combined earnings before interest, tax, depreciation, and amortization (EBITDA) hit ₹494 crore in FY25. That’s higher than the ₹381 crore recorded last year.
So, What’s the Big Picture?
Costa Coffee is growing fast in India. More shops, more customers, more revenue. That part is going well. But it’s not all smooth sailing. Rising ingredient costs are hurting profit margins. And as the brand expands further, managing those costs will get even more important.
Still, the brand seems to be handling it. They’re expanding carefully, not burning too much cash, and holding on to decent profits.
Anyone tracking food chains in India should keep Costa on their radar. The numbers show strong interest and market demand. If the brand keeps costs in check while adding more stores, it could be gearing up for even bigger things next year.
More updates coming soon—stay sharp and check back in with moneyphobia for the latest.
