Costa Coffee is stirring up more than just cappuccinos in India—it’s serving up some serious growth. The British coffee chain, operated in India by Devyani International Ltd (DIL), reported a 30.76% jump in revenue, reaching ₹198.5 crore in FY25. Profits also climbed by 28.4%, hitting ₹149.7 crore, according to DIL’s latest annual report.
This sharp rise comes on the back of aggressive expansion. In the past year alone, Costa added 41 new stores, growing its footprint from 179 to 220 outlets across the country. However, growth wasn’t without its costs.
Margins took a bit of a hit. Gross margins slipped to 75.4%, down from 76.8% last year, largely due to rising prices of coffee beans and other ingredients. The brand contribution margin also dipped, sliding from 17% to 16.1%, while average daily sales per store dropped from ₹33,000 to ₹27,000. This resulted in same-store sales growth (SSSG) falling from 8.7% to 4.1% year-on-year.
Despite these short-term challenges, the brand is bullish about India’s long-term promise. In fact, Costa Coffee’s Global CEO Philippe Schaillee, during a visit to India in April, stated that the country is poised to become one of Costa’s top five global markets. Currently, India ranks among the top 10.
Owned by global beverage giant Coca-Cola, Costa Coffee plans to open 40–50 new outlets annually. DIL sees India’s evolving café culture—especially among millennials and Gen Z consumers—as fertile ground for growth. The broader Indian coffee market is growing at 10–12% per year, nearly twice the global average.
“There’s been a noticeable cultural shift in India—from being a tea-dominant country to one where coffee is fast becoming a lifestyle choice,” DIL noted. Gen Z, in particular, is showing a strong preference for premium coffee experiences, influenced by global work cultures and urban living.
To keep pace with this demand, Costa is focusing on high-traffic locations such as airports, malls, and multiplexes, positioning itself where young, upwardly mobile Indians spend both time and money.
But the ride isn’t smooth. Costa is up against some formidable competitors—Starbucks, Tim Hortons, McCafe, and Dunkin’—all jostling for dominance in India’s increasingly crowded café market.
Still, with a 50-year global legacy, a clear local strategy, and a growing consumer base craving curated coffee moments, Costa Coffee is placing a long bet on India—and it looks like the brew is just beginning to boil.
