Summary
Restaurant Brands Asia Limited - Q3 FY26
Earnings Call Summary
Wednesday, February 04, 2026, 9:30 a.m. IST
Event Participants
Executives
5
Gaurav Ajjan (Head of Corp Dev & IR), Kapil Grover (Group CMO), Rajeev Varman (Group CEO), Sandeep Dey (Brand President, Indonesia), Sumit Zaveri (Group CFO & CBO)
Analysts
5
Anuj (Antique Stock Broking), Arun Malhotra (CapGrow Capital Advisors), Devanshu Bansal (Emkay Global), Gaurav Jogani (JM Financial), Jay Doshi (Kotak)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Restaurants (India) | 577 count | +67 YoY; reaching ~600 by end of FY26. |
| Total Revenue | ₹577 crores | +16.5% YoY; driven by new stores and positive SSSG. |
| SSSG (India) | +4.5% | 11th consecutive quarter of positive SSSG; strong traffic despite muted industry. |
| Average Daily Sales (ADS) | ₹1.17 lakh | Improvement driven by traffic growth in both dine-in and delivery. |
| Gross Margin (India) | 69.9% | +210 bps YoY; reached FY29 target 3 years early due to supply chain localization. |
| Restaurant EBITDA (Pre-Ind AS) | ₹74.9 crores | +25.7% YoY; margin at 13% of sales. |
| Company EBITDA (Pre-Ind AS) | ₹40.6 crores | +31.5% YoY; historical high at 7% margin (excludes ₹2.3cr wage code impact). |
| Digital Orders | 92% | High digital penetration via SOKs, App, and Aggregators. |
Geographic & Segment Commentary
- India: Delivered strong traffic-led growth with dine-in SSSG remaining positive for 10+ quarters. Market strength is noted in South India, Punjab, and UP belts, while metros remain solid for dine-in traffic. Management is focusing on the “RBA 2.0” phase, transitioning from customer acquisition to engagement and retention through CRM.
- Indonesia: Reported 4 consecutive quarters of positive SSSG for Burger King, aided by a completed chicken portfolio (50% of mix). Operating losses narrowed through G&A reductions of IDR 9 billion this year. Challenges remain in the Popeyes segment (25 stores), which requires urgent strategic addressing due to lack of marketing scale.
Company-Specific & Strategic Commentary
- Supply Chain Localization: Moved food production closer to restaurants to reduce transportation costs and ensure freshness, contributing significantly to the 69.9% gross margin.
- Delivery Profitability: Improved delivery gross margins by 200 bps by reducing tactical discounts and shifting toward data-driven, profitable promotions.
- Operational Efficiency: Installed new in-house designed broilers in 250 restaurants, expected to reduce utility expenses by 70-80 bps starting FY27.
- Capital Infusion: Definitive agreement signed with Inspira Global Group for ₹900 crore equity and ₹700 crore warrants at ₹70/share; post-transaction holding expected at ~35%.
- Digital Transformation: Monthly Active Users (MAU) grew 47% YoY; management aims to identify 100% of customers via the app within 5 years to optimize marketing spend.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Store Openings | 60 - 80 stores (FY26) | Midpoint of range expected; aiming for a more linear quarterly rollout in FY27. |
| Gross Margin | Revised Target (Q4 FY26) | Having reached the 70% FY29 target early, a new 3-5 year roadmap will be shared next quarter. |
| India ADS | Positive Trend (Q4 FY26) | Early Q4 trends remain encouraging despite competitive intensity. |
Risks & Constraints
| Risk | Context |
|---|---|
| Competition | Peers (McDonald’s) have become aggressive with ₹99 value meals; RBA mitigates this by maintaining its long-term “2 for ₹79” pillar. |
| Popeyes Indonesia | Sub-scale operations (25 stores) with lack of marketing support are currently a drag on Indonesia performance. |
| Input Costs/Labor | Implementation of the new wage code had a ₹2.3 crore one-time impact; store-level labor costs were temporarily high due to 44 new openings in Q3. |
Q&A Highlights
Transaction & Promoters
- Question: How will the ₹1,600 crore infusion be utilized and what are the synergies with Inspira’s other businesses (Gaurav Jogani, Devanshu Bansal)?
- Answer: The focus remains bullishly on India growth; specific contours of the strategy will be shared post-consummation. Inspira brings QSR experience, but RBA will continue to operate as a separate entity (Sumit Zaveri, Rajeev Varman).
Margins & Pricing
- Question: Are the 70% gross margins sustainable and will you match competitors’ price cuts (Anuj, Rishi Mody)?
- Answer: Margins are sustainable and structural due to supply chain shifts (Rajeev Varman). RBA will not react tactically to competition as its value platform is already the “strongest in the country” (Rajeev Varman).
Indonesia Strategy
- Question: Why are Indonesia gross margins lower (55%) and what is the plan for Popeyes (Arun Malhotra, Rishi Mody)?
- Answer: Margins dipped due to a higher mix of discounted chicken (rose from 30% to 50% of mix) to fill menu gaps; focus is now shifting back to premium burgers. Management will take “speedy” action on the Popeyes business soon (Rajeev Varman).
Key Takeaway
Restaurant Brands Asia delivered a robust Q3 FY26, characterized by a 16.5% revenue growth and a record company-level EBITDA of ₹40.6 crores (Pre-Ind AS). The India business achieved its long-term 70% gross margin target three years ahead of schedule, driven by supply chain efficiencies and a 200 bps improvement in delivery profitability. Strategic focus remains on “RBA 2.0,” involving a ₹1,600 crore capital infusion from Inspira Global Group and a shift toward high-margin “Core and Premium” burger communication alongside the stabilized “Value” pillar. While Indonesia shows signs of a turnaround in the Burger King segment with positive SSSG, the Popeyes business remains a watch point for restructuring. Management expects to sustain positive momentum into Q4 FY26 with a revised long-term margin and growth roadmap to be unveiled next quarter.
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