UFBL

United Foodbrands reported a robust Q4 FY26, marking the second consecutive quarter of strong broad-based growth. Consolidated revenue grew 23.1% YoY to INR360 crores, with Same-Store Sales Growth (SSSG) reaching 14.4%, building on 8.2% in Q3. This performance was volume-led, with consolidated dine-in transaction volumes up approximately 43% YoY and delivery revenue growing 32% YoY, indicating a significant inflection point in the company's trajectory.

The company's strategy of operating a multi-brand portfolio was validated, with all segments delivering strong double-digit growth. Barbeque Nation India saw 47% dine-in volume growth, International business grew 27.5% in revenue with 24.4% operating margins, and Premium CDR achieved 23.3% revenue growth with mature store margins above 18%. This diversified growth platform strengthens the long-term outlook and is delivering as designed.

Approximately 90% of the company's dine-in transaction volumes are driven through its own captive channels, including its app, website, and in-house reservation center. Over 60% of dine-in transactions are now routed digitally, up from 53% in Q3, and monthly active users on the app/website crossed 1.2 million, up 51% YoY. This direct customer relationship fosters deeper insights and brand affinity, forming a strong structural moat that compounds over time.

Gross margin moderated to 65.5% in Q4 FY26, a ~300 bps decline YoY, primarily due to a shift in business mix towards lower-APC segments, targeted value campaigns, and inflation in the Middle East. However, management expects a 100-200 bps recovery in FY27, aiming for a medium-term gross margin band of 67-68%. This recovery will be driven by procurement initiatives, scale benefits, and selective realization improvements, with gross margins already showing an inch-up in March and April 2026.

The 60 bps improvement in mature portfolio restaurant operating margin to 14.4% in Q4 FY26 was achieved despite deliberate investments of ~290 bps into gross margin and ~110 bps into additional marketing. The company noted that ~50% of every rupee of incremental SSSG flows through restaurant operating profit, demonstrating that the operating leverage equation remains intact. Back-end costs increased to 7.1% of revenue due to structural investments but are expected to compress to 6.5% in FY27 and further to 6% long-term, driven by operating leverage as revenue scales.

United Foodbrands added 35 new restaurants in FY26, bringing the total network to 262, and plans to add 40 more in FY27, targeting 300+ restaurants by year-end FY27 and 400-425 by FY30. This expansion, costing INR140 crores in FY27, will be primarily funded through internal accruals, with net debt expected to remain stable at ~INR100 crores. This reflects disciplined capital allocation, focusing on funding growth from operating cash flows and managing leverage within prudent limits.

For FY27, the company aims for double-digit SSSG, a 9-10% pre-Ind AS adjusted operating EBITDA margin, and 22-25% revenue growth. Key priorities include driving volume-led growth, continuing planned network expansion, building on margin trajectory, scaling its brand portfolio (Premium CDR in newer markets, International in Southeast Asia), and maintaining capital allocation discipline. The company explicitly stated it is not chasing discount-led growth, entering new brands, or making new acquisitions, focusing instead on executing its current portfolio.