Iran war may hit India’s burger-and-pizza chains as LPG squeeze threatens QSR kitchens

India’s big quick service restaurant chains could face trouble if the gas supply strain linked to the Iran war continues. A note by JM Financial says operators such as KFC, Burger King, McDonald’s, and Domino’s may have to deal with higher kitchen costs, weaker store sales and, in some places, even temporary disruption to operations.

The concern is simple. Much of the organised QSR business in India still runs on LPG-based kitchens. If commercial gas becomes harder to get, or more expensive, restaurant chains may be forced to rethink menus, limit operations in some markets or absorb higher fuel bills. Over time, some of that pressure may also be passed on to customers.

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Why LPG supply matters for India’s restaurant chains

JM Financial said around 60 to 65 per cent of cooking across most QSR chains depends on LPG. That includes grills, fryers, ovens, and other kitchen equipment used every day across large outlet networks. Most companies, the brokerage said, are working with a supply cushion of roughly one to two weeks.

That may not sound alarming at first. But the note warned that even a short break in supply can hurt business. It estimated that if restaurants do not get LPG cylinders for five days, revenue per store could fall by 6 per cent, while restaurant-level EBITDA for the quarter could drop by 14 to 20 per cent from normal levels.

The pressure is not only about supply. Commercial LPG cylinder prices have already risen around 8 per cent month-on-month in March 2026, according to the brokerage. For chains operating hundreds of stores, that can quickly raise operating costs.

JM Financial said major listed players exposed to the risk include Devyani International, Sapphire Foods India, Westlife FoodWorld, and Restaurant Brands Asia. Jubilant FoodWorks, though not under coverage, is also expected to be affected.

The note said large chains are better placed than smaller eateries when it comes to procurement. Even so, they still need regular supplies of commercial LPG to keep kitchens running smoothly.

Among company-specific observations, JM Financial said about 63 per cent of Sapphire’s cooking depends on LPG, and it has a buffer of around seven to eight days. Restaurant Brands Asia, it said, had anticipated the issue earlier and built a two-week buffer, though it may still have to stop certain product categories if the situation worsens. Westlife FoodWorld is still assessing the impact, but its current buffer is said to be around one week.

Wider gas stress is now spilling into more sectors

The brokerage said the Iran conflict is starting to affect India’s broader gas ecosystem. Force majeure notices have been issued across the LNG value chain, and some industrial users are facing possible cuts of 10 to 50 per cent in supply.

That is now being felt beyond restaurants. JM Financial said sectors such as chemicals, consumer durables, fertilisers, ceramics, logistics, and even food delivery platforms may come under pressure if the disruption drags on.

JM Financial also pointed to risks for chemicals and fertiliser companies because of their dependence on imported ammonia and gas-linked inputs.

In consumer-facing sectors, the note said food delivery businesses of Eternal and Swiggy may be hit if restaurant operations are disrupted. Their quick commerce arms may see some demand benefit if more people cook at home, but the overall effect may still be negative because food delivery remains the more profitable business.

Hotels, for now, appear less exposed because most large chains use piped natural gas rather than commercial LPG cylinders. But JM Financial said any deeper gas shortage could still affect food and beverage operations, room service and MICE business if the disruption widens.

For now, the brokerage’s message is that the situation is still evolving. But for India’s organised food service sector, where speed, scale and menu consistency are central to the business model, LPG has suddenly become a key operating risk.