Restaurant Brands Asia Limited — Q4 FY25 earnings call

Call held 19 May 2025

Management summary

Restaurant Brands Asia reported a strong Q4 and FY25, driven by robust traffic growth in India, particularly in dine-in, and significant improvements in profitability metrics. The company successfully expanded its cafe and digital footprint, while also rationalizing its Indonesia portfolio and showing early signs of sales recovery there. Management outlined clear targets for continued store expansion and margin improvement in India, alongside a focus on profitable growth across all channels.

Highlights

  • Full Year Revenue (India) at ₹1,968 crores, up 11.8% YoY.

  • Q4 Revenue (India) at ₹489 crores, up 11.5% YoY.

  • Full Year Company-level EBITDA (India) at ₹99.4 crores, up 32% YoY.

  • Q4 Company-level EBITDA (India) at ₹26.6 crores, a 2.5x growth YoY.

  • Full Year SSSG (India) was 1.1%, with Q4 SSSG at 5.1%.

  • Gross Margin (India) improved to 67.7% for FY25, a 0.7% YoY improvement.

  • Restaurant-level EBITDA (India) reached ₹206.8 crores, up 21.2% YoY.

  • India store count reached 513, with 58 new restaurants added in FY25.

  • Indonesia Burger King SSSG was positive 2% for FY25, with recent overall SSSG at 5% and dine-in SSSG at 10%.

Key financials

2 periods

Q4 FY25 India

  • Revenue
    ₹489 Cr
    YoY +11.5%
  • SSSG
    5.1%
  • Company-level EBITDA
    ₹26.6 Cr
    YoY +150.9%

FY25 India

  • Revenue
    ₹1,968 Cr
    YoY +11.8%
  • SSSG
    1.1%
  • Gross Margin
    67.7%
    YoY +0.7%
  • Restaurant-level EBITDA
    ₹206.8 Cr
    YoY +21.2%
  • Company-level EBITDA
    ₹99.4 Cr
    YoY +32%
  • Store Count
    513 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

  • Indonesia Business (Full Year FY25)
    269.3 Bn Total Revenue143 stores Burger King Store Count18.5 Mn Burger King ADS25 stores Popeyes Store Count14.1 Mn Popeyes ADS2% Burger King SSSG

Guidance & targets

Store Expansion

  • New Restaurants (India) Store Expansion · Next four years (by FY29) · High confidence 60-80 per year

    Previously 700 by FY27 → 60-80 per year

    We are looking to open 60 to 80 new restaurants every year for the next four years. This will take us to about 800 restaurants by FY '29.

    — Gaurav Ajjan

Store Count

  • Total Restaurants (India) Store Count · By FY29 · High confidence 800

    Previously 700 by FY27 → 800

    We are looking to open 60 to 80 new restaurants every year for the next four years. This will take us to about 800 restaurants by FY '29.

    — Gaurav Ajjan

Margin

  • Gross Profit Margin (India) Margin · Next four years (by FY29) · High confidence 0.5%-0.7% annual increase, targeting ~70%
    We are targeting an annual increase of 0.5% to 0.7% over the next four years. And this will take us closer to a number of about 70% by FY '29.

    — Gaurav Ajjan

Capex

  • New Store Capex (India) Capex · Ongoing · High confidence ~₹3 crores
    So, on the CAPEX side, with respect to new stores, 60 to 80 restaurants that we are talking about, roughly Rs. 2.7 crores plus the deposit that we placed. So roughly including that will be around Rs. 3-odd crores.

    — Sumit Zaveri

  • Incremental Digital Capex (India) Capex · Coming financial year · Medium confidence ~₹10-15 crores
    beyond the new store CAPEX and maybe incremental CAPEX on the digital side to the tune of around maybe anywhere between Rs. 10 crores to Rs. 15 crores, we do not expect anything more on the CAPEX side over and beyond the new store CAPEX, at least in the coming financial year.

    — Sumit Zaveri

Profitability

  • Breakeven Point (Indonesia) Profitability · Ongoing · Medium confidence Reduced
    Also, if you look at the closures, we have done the overheads that we have reduced, yes, they have brought down the breakeven point, and we are kind of working towards that.

    — Rajeev Varman

Marketing Spend

  • A&P Spend as % of Sales (Indonesia) Marketing Spend · Over next couple of quarters · High confidence Settle down to 5%
    It will settle down, rightly this will literally kind of settle down back to the 5% marketing investments that we otherwise would put in the market similar to what we have in India. It's just that some of these investments were kind of front-ended in order to get the sales back to the pre-COVID levels.

    — Sumit Zaveri

Risks & concerns

  • Geopolitical headwinds and market slowdown in Indonesia

    medium

    Geopolitical issues impacted sales, but management sees 'green shoots' and market turning, with recent dine-in ADS up 10%.

    Management acknowledged

  • Inflation in beef prices and currency depletion in Indonesia

    medium

    These factors impacted restaurant-level margins in Q4 FY25, but pricing actions have been taken across the market and are expected to 'wash out over the next couple of quarters.'

    Management acknowledged

  • ADS stagnation in India despite store additions

    medium

    Management explained this by focusing on profitable sales and traffic growth, and the newness of cafes and recent store additions needing time to mature.

    Analyst acknowledged

Areas of evasion (2)

  • Indonesia strategic timeline/breakeven
  • Very granular cohort-level profitability data

Q&A highlights

1 direct, 1 evasive
ADS stagnation despite store additions and cafes in India Partial
What's happening is we are seeing a more and more increase in traffic coming into our restaurant. So, we are driving that as our initiative to bring more people into the restaurant and experience the brand over there, very successfully as well, right? ... And the last two years, and especially this last year, we have started to focus on profitable sales.

Challenges management on a key performance indicator (ADS) that hasn't shown expected improvement despite significant investments, revealing a shift in focus to profitable sales and traffic over just top-line ADS.

Asked by Dhwanil Desai

Indonesia business breakeven timeline and strategic future Evasive
Look here, we are looking at this very closely, right from all points of view, we want to do the best thing for our business over there in terms of our investors and our promoters, stakeholders, myself included in there. We want to do the right thing over there. It's seen some green shoots, that does not mean that we have closed other options, we are looking at all options. And we will make a good call very quickly. I was telling this earlier on in the last call that we are looking at the next two, three quarters very crucially and very closely, and we will do the right thing for the investors in that kind of timeframe.

Analysts pressed for a clear timeline or strategic decision on the loss-making Indonesia business, but management deferred a concrete answer, indicating uncertainty or a lack of immediate resolution.

Asked by Atul Mehra

India store addition guidance revision and agreement with franchisor Direct
Yes. We spoke about this I think a couple of quarters ago that, because of COVID we had rearranged an agreement with our franchisor. So, this guidance that you are seeing is reflective of that agreement that we changed with them.

Clarified a significant change in the long-term store expansion plan, linking it to a revised agreement with the franchisor due to COVID, which is crucial for understanding future growth trajectory.

Asked by Rishi Mody

2 min read 7 chapters

Detailed narrative

Strong Financial Performance in India (Q4 & FY25)

Restaurant Brands Asia reported a robust Q4 FY25 with India revenue growing 11.5% YoY to ₹489 crores and SSSG at 5.1%. For the full year FY25, India revenue increased by 11.8% YoY to ₹1,968 crores, with a positive SSSG of 1.1%. Company-level EBITDA for India saw significant growth, reaching ₹26.6 crores in Q4 (2.5x YoY increase) and ₹99.4 crores for the full year (32% YoY increase).

Profitability and Efficiency Improvements

Gross margins in India improved to 67.7% for FY25, a 0.7% increase YoY, with management targeting a further annual increase of 0.5%-0.7% to reach approximately 70% by FY29. Restaurant-level EBITDA for India grew 21.2% YoY to ₹206.8 crores, driven by initiatives focused on delivery profitability (up 1% over FY24) and overall P&L efficiency (1.7% improvement for older restaurants).

Strategic Pillars: Traffic, Digital, and Innovation

The company's strategy continues to focus on driving traffic, with dine-in traffic growing 9% in FY25, building on a 5.2% increase in FY24. The 'Digital First Brand' pillar saw 90% of restaurants equipped with self-ordering kiosks and table ordering, and app transactions grew 3x YoY. Innovation is a key focus, highlighted by the recent launch of a Korean product range, and the cafe pillar now covers 90% of the store base (464 cafes).

Revised India Expansion Plans

Restaurant Brands Asia has revised its India store expansion guidance, now aiming to open 60-80 new restaurants annually for the next four years, targeting a total of approximately 800 restaurants by FY29. This is a revision from the previous target of 700 restaurants by FY27, reflecting a rearranged agreement with the franchisor due to COVID.

Indonesia Business: Recovery and Rationalization

The Indonesia business showed early signs of recovery, with Burger King reporting a positive SSSG of 2% for FY25, and recent trends (Nov-Apr) showing overall SSSG at 5% and dine-in SSSG at 10%. The company rationalized its portfolio by closing 36 non-performing restaurants and reduced corporate overheads from ₹65 crores to ₹40 crores, with a further ₹4-5 crores reduction targeted.

Indonesia Challenges and Marketing Investments

Despite gross margin expansion in Indonesia, restaurant-level EBITDA margins declined in Q4 FY25 due to beef inflation and currency depreciation. Management indicated that increased marketing spend (around 8% of sales in recent quarters, up from a typical 5%) was front-ended to recover sales to pre-boycott levels, and this spend is expected to normalize over the next couple of quarters.

Capex and Cost Optimization

New store CAPEX in India remains consistent at approximately ₹3 crores per store (including deposit), maintained through cost efficiencies despite adding cafes and digital kiosks. The large incremental CAPEX cycle for cafes and digital investments has largely concluded, with only ₹10-15 crores expected for incremental digital CAPEX in the coming financial year beyond new store additions.

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