Buy Restaurant Brands Asia; target of Rs 115: Anand Rathi

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • SSSG Growth: RBA reported a 14% SSG in Q2FY27 for Burger King India, driven by higher customer traffic, value offerings, and menu innovation.
  • Indonesian Business: The Indonesian business remained muted, but Burger King turned restaurant-level EBITDA-positive through cost efficiency.
  • Standalone Performance: Standalone performance benefited from higher dine-in traffic and improved delivery business, driving a 200bps YoY expansion in EBITDA margin.
  • Store Expansion: The management reiterated its annual store addition guidance of 70-80 outlets in the coming years.

Thesis Validation Checklist

  • Traffic Growth: Watch for continued traffic growth, driven by value offerings and premium innovation.
  • Indonesian Recovery: Monitor the recovery of the Indonesian business, driven by cost efficiency and digital expansion.
  • Margin Expansion: Expect sustained operating leverage from higher volume, supply-chain efficiency, and energy savings.
  • Store Count: Track the store count of Burger King India, expected to reach ~670 by FY27-end. Investors should watch for these signals over the next ~12 months to see if the thesis is playing out.