Restaurant Brand

Restaurant Brands Asia reported a robust Q3 FY26, with total revenue growing 16.5% YoY to INR 577 crores. The company achieved a positive Same-Store Sales Growth (SSSG) of 4.5%, marking its 11th consecutive quarter of positive sales. Gross margin expanded to 69.9%, an increase of 2.1% YoY and 1.6% QoQ, driven by supply chain efficiencies and reduced delivery discounts. Restaurant level EBITDA (pre-Ind AS) surged 25.7% to INR 75 crores, while company EBITDA (pre-Ind AS) grew 31.5% to INR 40.6 crores.

RBA added 44 new restaurants in Q3, bringing the total count to 577 by December 31, 2025, and expects to reach close to 600 by March 31, 2026. The company aims to add 60 to 80 new restaurants annually. Digital channels continue to be a key growth driver, with 92% of all orders now digital. Monthly Active Users (MAU) saw a significant 47% YoY growth, supported by self-ordering kiosks, table ordering, and app-based initiatives. The delivery mix remained stable at 43-44%.

The company proudly announced that it has already reached its gross margin guidance of 70%, which was originally targeted for FY29, more than three years ahead of schedule. This achievement is attributed to improved delivery profitability, with a 2% point improvement in gross margin on the delivery side, and supply chain and distribution initiatives. Management expressed confidence in sustaining and further improving these margins, with new guidance expected next quarter.

In Indonesia, the Burger King business has shown significant progress, reporting 4 consecutive quarters of positive SSSG and positive Average Daily Sales (ADS) for 13 consecutive months. General & Administrative (G&A) expenses were further reduced by IDR 9 billion (approximately INR 4.5 crores) this year, building on IDR 29 billion reduced over the past two years. However, the Popeyes business, with only 25 stores, faces challenges due to a lack of significant marketing and growth path, which management plans to address urgently. The gross margin in Indonesia is currently 55%, with a target to bring it back to 58.5%.

RBA continues to strengthen its value proposition while also expanding its core and premium menus. The company emphasizes driving traffic through profitable deals on its app and bringing food closer to restaurants to reduce transportation costs and ensure freshness. In Indonesia, after strengthening the chicken portfolio, the focus will shift to enhancing the burger side, where Burger King is already recognized as number one in the country.

The company has entered a definitive agreement with Inspira Global Group, which will infuse INR 900 crores via preferential allotment and INR 700 crores through warrants at INR 70 per share. The new promoter is expected to hold around 35% post-transaction. Management expressed excitement about the new promoter's experience and alignment with RBA's strategy for both India and Indonesia, anticipating enhanced business growth and efficiency. Details on the utilization of proceeds and long-term strategy will be shared next quarter.

RBA is implementing various cost efficiency measures, including the installation of new broilers in over 250 restaurants, which is expected to improve overall utilities by 0.7% to 0.8% starting next financial year. Efforts are also underway to optimize labor costs, which saw a temporary increase in Q3 due to pre-training for new store openings. The company is focused on line-by-line item cost reductions, including utilities and rent.