Restaurant Brands Asia Q1 Results Review - India Business On Track: Prabhudas Lilladher

Prabhudas Lilladher Report

Restaurant Brands Asia Ltd. posted in-line results with 3.1% same-store sales growth, 116 basis points expansion in gross margins and 120 bps higher Pre IND AS Ebitda margins. Burger King continues to focus on value strategy with burger combos (2 veg Burgers at Rs 79 and chicken at Rs 99) and value meals at Rs 99 to drive traffic in a tepid demand environment.

Indonesia business saw another muted quarter (-17% sales growth) due to sustained geopolitical issues and scale down in number of BK stores even as traction in Popeye’s and value offerings sustained momentum.

India business seems on traction with gradual buildup of margins with-

1. steady improvement in store traffic,

2. sustained benefits from value meal and

3. strong growth in smaller towns.

Indonesia is expected to show recovery post Q3 led by-

1. Improving sentiments with time,

2. new range of chicken offerings,

3. desserts scalability and

4. sustained traction with higher average daily sales in Popeyes.

Given strong SSG outlook for long term, we expect India business to turn PBT positive from FY26, while Indonesia might take longer.

We value the company at Rs 134 (no change) on SOTP basis. Retain Accumulate.

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