In just five years of debuting in India, Costa Coffee has achieved operating profit at the enterprise level.
And Santhosh Unni, chief executive officer, says that's significant considering the various pressures on the Indian retail industry.
The pressure points are many. Unni says while coffee prices are at a 14-year high, sugar and milk costs are soaring, having a direct impact on margins.
Soaring real estate rentals are another major point of concern.
On top of this, coffee retailers have only a limited option of passing on the cost to consumers.
"We are in a market creation mode and hence have to be prudent," Unni adds.
The only silver lining is that competition is also going through the same problems.
But won't the entry of global retailers like Starbucks and Dunkin Donuts increase competition in an already cluttered market place?
Unni says the biggest challenge today is the relatively small size of the cafe market and new coffee retailers will only grow the market.
According to industry estimates, India, in the current context can take 5,000 cafes and there is space for three to four large pan-India players.
"In any case, we are fighting them in 26 countries and we will also fight them here", Unni adds.
The UK-based retailer, which entered India in 2005 through the Jaipuria Group as its master franchisee, has already drawn up an aggressive expansion blueprint, under which it plans a four-fold increase in the number of stores in the next three years.
The current number is 75.
But it has tough competition in terms of presence. Café Coffee Day, India's largest café player, has over 1,000 outlets and is planning to open one café every third day.
It is followed by Barista with 200
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