Restaurant Stocks Fall As LPG Supply Concerns Impact Operations

Shares in companies that specialise in the delivery and provision of food and restaurant services have lost as much as 10% of their value following concerns over the supply of LPG, driven by the current issues in West Asia.

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Eternal declined 2% to ₹228.75 per share on the NSE, while Swiggy dropped over 3% to ₹260.40. Jubilant FoodWorks fell 4.3% to ₹434.60 per share, while Sapphire Foods India declined 5.5% and United Foodbrands dropped up to 10% during the session.

LPG Supply Disruptions Affect Restaurant Operations

The decline in restaurant stocks follows supply disruptions in liquefied petroleum gas (LPG), a key fuel used in restaurant kitchens. According to company disclosures, limited LPG availability has affected operations at several outlets.

Jubilant FoodWorks stated in an exchange filing that LPG supply to parts of its store network has been constrained due to the ongoing West Asia conflict. The company said it is taking steps to conserve LPG and is exploring alternative energy sources such as electricity and piped natural gas (PNG).

Government Measures To Address Supply Constraints

The central government has allowed the ad hoc allocation of public distribution system (PDS) kerosene in 21 states and Union Territories, including areas that have been declared kerosene-free.

This decision has been taken in view of global supply disruptions in major fuels, including LPG, after the intensification of the West Asian conflict.

Impact Of Import Dependence

India imports about 60% of its LPG requirement, with 85–90% sourced from Gulf countries, according to industry data. Supply disruptions in the region have led to reduced availability for commercial users such as hotels and restaurants.

Domestic households have been prioritised in LPG allocation, resulting in lower supplies for commercial consumption. This has affected restaurant operations and increased dependence on alternative fuels.

Broader Sector Impact

Food delivery platforms have also been impacted as restaurant partners face supply constraints, which may affect order fulfillment. Reports of rising demand, coupled with limitations in supply, have also led to longer waiting times at these outlets.

The fall in stock prices can be attributed to the effect of disruptions in the supply of LPG, which has been affecting the restaurant and food delivery segment.