Skip to content

    Restaurant Brand

    RBAGood
    Consumer Services·4 Nov 2025
    Management Summary

    Restaurant Brands Asia reported a strong Q2 FY26, driven by robust revenue growth and consistent positive traffic in India's dine-in segment. The company demonstrated significant progress in gross margin expansion and digital adoption, with 91% of transactions now digital. While Indonesia operations, particularly Popeyes, remain a challenge, management is focused on cost optimization and strategic initiatives to drive long-term profitability and store expansion across both geographies.

    Highlights

    8

    • Revenue grew by 15.6% YoY to ₹568 crores, with 2.8% coming from same-store sales growth.

    • Gross margin improved by 60 basis points QoQ, reaching 68.3% in Q2 FY26 from 67.7% in Q1 FY26.

    • Restaurant EBITDA stood at 10.4% for the quarter, slightly down from 10.6% last year due to strategic investments in staff.

    • Company EBITDA (cash basis on pre-IndAS) was ₹28.4 crores, representing a 5% margin, ₹4 crores higher YoY and ₹6 crores higher QoQ.

    • Achieved 10 consecutive quarters of consistent positive traffic SSSG in dine-in for India operations.

    • 91% of transactions are now digital, supported by a 70% YoY growth in monthly app activity/downloads.

    • Corporate overheads reduced by approximately ₹20 crores in G&A savings.

    • Opened 14 new restaurants, bringing the total to 533, with a target to reach 580 by year-end.

    Concerns

    1

    • Popeyes Business Performance in Indonesia

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹568 Cr+15.6%YoY
    2. 02Gross Margin68.3%+0.6%QoQ
    3. 03Restaurant EBITDA10.4%
    4. 04Company EBITDA (pre-IndAS)₹28.4 Cr
    5. 05Same-Store Sales Growth2.8%

    Segment breakdown

    Indonesia Burger King
    18 billion IDR Average Daily Sales25 billion IDR Translation Revenue56.8% Gross Profit-3% Store EBITDA
    Indonesia Consolidated
    33 billion IDR Company EBITDA Loss
    List

    Guidance & targets

    8
    CategoryTargetPriority
    Store Expansion
    New Restaurants Annually
    60 to 80
    		High
    Store Expansion
    Total Restaurants
    580
    		High
    Gross Margin
    Overall Gross Margin
    70%
    		Medium
    Utility Cost
    Utility Cost Reduction
    1 percentage point
    		High
    Equipment
    Broiler Initiative Completion
    by March or early April
    		High
    Average Daily Sales (ADS)
    ADS Target
    ₹125,000 to ₹135,000
    		Medium
    Restaurant EBITDA
    Restaurant-level EBITDA
    13-14%
    		Medium
    EBITDA Margins
    Company EBITDA Margins
    big jump
    		Low

    Risks & concerns

    3
    RiskSeverity

    Popeyes Business Performance in Indonesia

    Popeyes business has been a challenge, with 25 restaurants, and the company is laser-focused on eliminating losses and bringing it to neutral. — Management acknowledged

    high

    Impact of Local Activity on Indonesia Sales

    September saw some country activity that penalized a few days of sales for Burger King in Indonesia, though October is back on track. — Management acknowledged

    medium

    Industry-wide SSSG Strain

    The industry has seen strain with tough SSSG numbers over the last six to seven quarters, indicating a challenging demand environment. — Management acknowledged

    medium

    Q&A highlights

    3

    “Right now, we are pretty excited about the Burger King part of the business over there because we can see, evidently, recovery on the dine-in side of the business where people are coming in and traffic is in the positive... But our efforts, like I shared on the last call and even the call before, is two prong, is to continue improving the business but also look at alternative solutions in terms of potential exits from that market.”

    Reveals ongoing strategic review for Indonesia, with Burger King showing recovery but Popeyes remaining a challenge and potential for market exit still on the table.

    asked by Kiran Gadge

    3 min read6 chapters

    Detailed Narrative

    01

    India Business Performance and Dine-in Traffic Growth

    Restaurant Brands Asia's India operations demonstrated strong performance with 10 consecutive quarters of consistent positive traffic SSSG in dine-in. This strategy, driven by a barbell approach combining value offerings (two for ₹79/₹99) and premium launches (Korean Fest, King's Collection, Whopper Deluxe at ₹140-₹150), continues to yield results. The company reported an overall revenue growth of 15.6% to ₹568 crores, with 2.8% attributed to same-store sales growth, indicating healthy organic expansion.

    02

    Profitability and Margin Improvement Initiatives

    The company achieved a gross margin of 68.3% in Q2 FY26, a 0.6% improvement from 67.7% in Q1 FY26, driven by supply chain efficiencies and improved profitability on the delivery side. Delivery margins specifically improved by 1 percentage point. Restaurant EBITDA for the quarter was 10.4%, slightly lower than 10.6% last year, a conscious decision to invest 0.9% of EBITDA into additional staff for enhanced customer experience with new digital initiatives. Management aims to reach an overall gross margin of 70% by FY29.

    03

    Digital Transformation and Customer Engagement

    RBA is rapidly advancing its 'Digital-First' strategy, with 91% of all transactions now digital. The company's app downloads and monthly activity have seen a significant 70% growth over the previous year. The BK app now accounts for approximately 35% of dine-in traffic, offering great value and driving customer frequency. A CRM team and partners are in place to further build frequency among existing customers in the coming quarters.

    04

    Indonesia Operations: Burger King and Popeyes

    Indonesia operations present a mixed picture. The Burger King business is showing signs of recovery, with average daily sales (ADS) being higher in 12 out of the last 13 months, reaching around IDR 18 billion in local currency. Gross profit for Burger King Indonesia stands at 56.8%. However, the Popeyes business, with 25 restaurants, remains a significant challenge, contributing to a consolidated Indonesia EBITDA loss of IDR 33 billion for the quarter (compared to IDR 21 billion last year). Management is actively working on strategies to eliminate Popeyes' losses and is exploring alternative solutions for the market.

    05

    Store Expansion and Growth Outlook

    The company is on track with its expansion plans, having opened 14 new restaurants this year, bringing the total count to 533. The target is to open 60 to 80 restaurants annually until FY29, aiming for approximately 800 stores. For the current fiscal year, RBA expects to add another 45 to 50 stores, reaching a total of 580 restaurants by year-end. This growth is supported by efforts to optimize distribution costs and bring in local suppliers as density increases.

    06

    Cost Optimization and Efficiency Drives

    RBA has made substantial progress in reducing corporate overheads, achieving approximately ₹20 crores in G&A savings. Further efficiency initiatives include the rollout of a new broiler system across all restaurants by March or early April next year, expected to reduce utility costs by 1 percentage point. The company is also implementing e-coolers to pre-cool air for AC systems. These efforts are designed to improve the P&L structure independently of volume growth, ensuring a leaner and more efficient operation.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.