Restaurant Brands Asia Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Restaurant Brands Asia delivered strong Q3 FY26 results, driven by robust revenue growth, positive SSSG, and significant margin expansion in India. The company continued its digital transformation, leading to increased user engagement and operational efficiencies. While the Indonesia Burger King business showed positive momentum, the Popeyes segment remains a challenge that management is actively addressing. The company is on track with its store expansion plans and has achieved its FY29 gross margin target ahead of schedule.

Highlights

  • Total revenue reached INR 577 crores, marking a 16.5% YoY increase.

  • Same-Store Sales Growth (SSSG) was positive at 4.5% for the quarter.

  • Gross margin improved to 69.9%, up 2.1% YoY and 1.6% QoQ.

  • Restaurant level EBITDA (pre-Ind AS) was almost INR 75 crores, growing 25.7%.

  • Company EBITDA (pre-Ind AS) hit INR 40.6 crores, a 31.5% YoY increase.

  • Added 44 restaurants in Q3, bringing total to 577 by December 31, 2025, targeting close to 600 by March 31, 2026.

  • Monthly Active Users (MAU) grew 47% YoY, with 92% of all orders being digital.

  • Indonesia business showed 4 consecutive quarters of positive SSSG for Burger King, with G&A reduced by IDR 9 billion (approx. INR 4.5 crores) this year.

Key financials

  1. Total Revenue ₹577 Cr +16.5%YoY
  2. SSSG 4.5%
  3. Gross Margin 69.9% +2.1%YoY
  4. Restaurant EBITDA (pre-Ind AS) ₹75 Cr +25.7%YoY
  5. Company EBITDA (pre-Ind AS) ₹40.6 Cr +31.5%YoY
  6. Total Restaurants 577 stores

What they filed

Q1 FY27: revenue up 17.9%, net profit up 26.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue632 639 633 698 703 +11%715 +12%707 +12%823 +18%
EBITDA63 70 73 73 71 +13%90 +29%95 +30%100 +37%
Net profit-65 -55 -60 -45 -63 +3%-48 +13%-47 +22%-33 +27%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • India Business
    ₹577 Cr Total Revenue4.5% SSSG69.9% Gross Margin₹75 Cr Restaurant EBITDA (pre-Ind AS)₹40.6 Cr Company EBITDA (pre-Ind AS)43% Delivery Mix2% Delivery Gross Margin Improvement47% Monthly Active Users Growth
  • Indonesia Business
    positive for 4 consecutive quarters Burger King SSSG9 billion idr G&A Reduction (this year)29 billion idr G&A Reduction (last 2 years)25 stores Popeyes Stores55% Gross Margin

Guidance & targets

Store Expansion

  • Total Restaurants Store Expansion · by March 31, 2026 · High confidence close to 600
    And by the end of this quarter, by 31st March, we should be at very close to 600 restaurants.

    — Rajeev Varman, Whole-Time Director and Group CEO

  • New Restaurants Added Annually Store Expansion · every year · Medium confidence 60 to 80
    We are on track to add a few more this quarter, and that will take us somewhere in the midpoint of our guidance range of 60 to 80 new restaurants every year.

    — Gaurav Ajjan, Head of Corporate Development and Investor Relation

Profitability

  • Gross Profit Margin Profitability · achieved in Q3 FY26 · High confidence 70%

    Previously 70% by FY29 → 70%

    Happy to share that we've already reached the guidance or we've almost reached the guidance of 70%, which we had originally planned to achieve by FY '29.

    — Gaurav Ajjan, Head of Corporate Development and Investor Relation

  • Gross Profit Margin (India) Profitability · going forward · High confidence remain on that and move forward
    Yes, yes, we are confident to remain on that and move forward actually.

    — Rajeev Varman, Whole-Time Director and Group CEO

  • Gross Margin (Indonesia) Profitability · moving forward · Medium confidence back to 58.5%

    From 55% today

    Our intention is now to quickly catch up that gross margin and bring it back to 58.5%, which the other competition is running, and then start moving it in the right direction from there.

    — Rajeev Varman, Whole-Time Director and Group CEO

Efficiency

  • Overall Utilities Improvement Efficiency · starting next financial year · Medium confidence 0.7% to 0.8%
    we expect that it should improve the overall utilities, as we had mentioned, in the region of around 0.7% to 0.8% going forward. But the entire impact or the effect of that, we will be able to see it largely, we feel, starting the next financial year

    — Sumit Zaveri, Group CFO and Chief Business Officer

Digital Strategy

  • Consumer Knowledge Digital Strategy · over the next 4, 5 years · Medium confidence close to 100%
    So our effort will be, over the next 4, 5 years, to make sure that we build our technology, to extend that we know 100% of our consumers

    — Rajeev Varman, Whole-Time Director and Group CEO

Risks & concerns

  • Underperformance of Popeyes business in Indonesia

    medium

    Only 25 Popeyes stores with a lack of significant marketing and growth path; management states they will address this urgently.

    Management acknowledged

  • Competitive pricing pressure from rivals (e.g., McDonald's)

    low

    McDonald's has become aggressive with a INR99 value combo. Management states their value strategy is long-term and no further price reductions are planned, focusing on core and premium offerings.

    Analyst downplayed

Areas of evasion (1)

  • Specific breakup numbers for gross margin expansion (menu mix vs. delivery discount reduction) due to competitive reasons.

Q&A highlights

3 direct
Dine-in vs. Delivery Growth and CRM Strategy Direct
We continue to drive more and more people into our restaurants, and that's how we are increasing the sales there. We only grow profitably. So all the effort on the delivery side, reducing discounts, making sure we have a good offer, marketing through those channels, we continue to focus on that.

This question clarifies the drivers of sales growth (traffic, not check size) and the company's strategic focus on profitable growth in delivery by optimizing discounts and leveraging CRM, rather than just volume.

Asked by Gaurav Jogani, JM Financial

Gross Margin Sustainability and Employee Expense Increase Direct
Our gross margins are solid. And if you actually look back on our quarters, right, put 8 quarters, last quarter that we have reported, if you put that on your spreadsheet, you will see that there is a constant increase every quarter. We opened 44 restaurants in this quarter, which is putting almost 1,000 people into the restaurant, which were actually sitting in other restaurants before we opened these restaurants.

This addresses concerns about the sustainability of the achieved gross margins and explains the temporary increase in employee costs due to new store openings and pre-training, which is expected to stabilize.

Asked by Gaurav Jogani, JM Financial

Indonesia Business Strategy and New Promoter Vision Direct
The incoming promoter is very aligned and consistent with the current management strategy on our business, RBA, whether it's in India or Indonesia. They come in with huge experience... But look, the Burger King business in Indonesia, slow it be, is turning around and coming positive... We have a challenge with Popeyes, as I stated in the onset, and we will be dealing with that on a very, very speedy basis.

This provides insight into the new promoter's alignment with existing strategy and acknowledges the specific challenge with the Popeyes brand in Indonesia, indicating a focused effort to address it.

Asked by Rishi Mody, RDM Advisory

3 min read 7 chapters

Detailed narrative

Strong Q3 FY26 Performance in India

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.

Accelerated Store Expansion and Digital Adoption

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%.

Gross Margin Achievement Ahead of Schedule

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.

Indonesia Business Turnaround and Challenges

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%.

Strategic Focus on Value, Core, and Premium Menus

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.

Impact of New Promoter and Future Plans

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.

Operational Efficiencies and Cost Management

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.

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