Is Theobroma A Sweet Bet For ChrysCapital?

What does a gym celebrating your one-year milestone, buying a new car, or a career win at work have in common? They all come with cake.

And now, so does India’s biggest bakery deal.

ChrysCapital’s acquisition of a 90% stake in Theobroma, valuing the company at US $315 million (₹2,678 crore EV), isn’t just a play on a pastry chain — it’s a bet on a much larger trend in India’s consumption story.

As Warren Buffett famously said, “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”

But flip the script — pick the right business, with strong tailwinds, and you don’t need brilliance. ChrysCapital seems to have done exactly that.

The Deal: Premium, But Prudent

• EV/EBITDA Multiple: 27×–33×, based on FY25 EBITDA estimates of ₹80–100 crore (US $9.5–12 million)

• Implied Enterprise Value: ₹2,678 crore / US $315 million

• Priced at a premium to typical mid-market FMCG/QSR multiples (20–25×) but below unicorn valuations (35–40×)

This reflects confidence in Theobroma’s urban premium positioning — a scalable play on the casual dining-cum-café market.

The Sector: A ₹5 Lakh Crore Appetite

• India’s food services market is projected to reach ₹5 lakh crore (~US $60 billion) by FY27

• The QSR segment alone is growing at 20%+ CAGR, fueled by urbanization, delivery platforms, and aspirational consumption

• Recent deals like Devyani International’s acquisition of Biryani By Kilo highlight strategic interest in scaling branded, regional QSRs

• AltG’s India QSR Opportunity Score: 62.2% — underscoring high FCF growth and return potential

Even in subdued quarters, QSRs have outpaced other consumer categories in footfall recovery and delivery growth.

The Playbook: Delivery-First, Café-Focused

But this isn’t just about stores selling brownies. Theobroma will need to pivot hard on:

• Delivery-First Model: Competing with cloud kitchens and on-demand platforms

• Store Format Upgrades: From transactional bakeries to high-repeat café spaces — think Blue Tokai for cakes

• Product Expansion: Beyond brownies and pastries into beverages, snacks, and gifting

High competition, rising input costs, and delivery margins will test Theobroma’s next phase.

The Return Math: How Sweet Can It Get?

Growth Scenario- Valuation Multiple - Annualized Return (5 Years)

10% CAGR; Current Multiple 29× ~14.65%

15% CAGR; Current Multiple 29 ~19.64%

10% CAGR; Multiple 35× (Rerated) ~22.3%

15% CAGR; Multiple 40× (Rerated) ~30.6%

If Theobroma can deliver double-digit EBITDA growth and capture an industry rerating, ChrysCapital could be looking at 20–30% IRRs — strong by any PE benchmark.

The Bottom Line

India’s QSR wave is no fad. It’s a structural consumption trend, powered by rising incomes, urban lifestyles, and a digital delivery ecosystem.

In a market where every small milestone — personal or professional — ends with a slice of cake, ChrysCapital may have picked the right horse at the right time.

And this time, the cake might just be for them.

Disclaimer: In the article "Is Theobroma A Sweet Bet For ChrysCapital?" above - Any views, comments or communication (above or in the past) should not be construed to be investment advice by Alternative Growth (hereafter referred to as “AltG”) in any form whatsoever. AltG does not make an offer to sell or solicit to buy any securities.