Shares of an international QSR chain in India and the national master franchisee of the Burger King brand in India are in focus on the stock exchanges, after Motilal Oswal maintained a ‘buy’ rating on the stock with a target price of Rs. 120 apiece, indicating a potential upside of around 86 percent from current price levels.
With a market cap of Rs. 3,755.5 crores, shares of Restaurant Brands Asia Limited is currently trading in the green at Rs. 64.5 on BSE, up by around 0.5 percent, compared to its previous closing price of Rs. 64.21. The stock has delivered negative returns of around 24 percent in one year, and has fallen by over 8 percent in the last one month.
Brokerage Target & Outlook
Domestic brokerage firm Motilal Oswal Financial Services has reiterated its “buy” rating on Restaurant Brands Asia Limited (RBA), setting a target price of Rs. 120 per share, representing a potential upside of nearly 86 percent from current price levels.
The brokerage highlighted its valuation approach, assigning a 25x Sep’27E EV/EBITDA (pre-Ind AS) multiple to the company’s India operations, while valuing the Indonesia business at around Rs. 500 crores, equivalent to 0.7x EV/Sales (Sep’27E).
RBA reported a 16 percent YoY revenue growth in its Indian business for Q2 FY26, driven by a 15 percent YoY increase in store additions. Same-store sales (SSS) grew 2.8 percent YoY, supported by healthy traction across both dine-in and delivery channels, as well as from value-led offerings. The company also recorded a robust start to Q3 FY26, aided by the GST rate reduction and a healthy festive season, with management expressing confidence in sustaining growth momentum through the quarter.
During Q2 FY26, GM for the India business improved by 80 basis points (bps) YoY and 60 bps QoQ to 68.3 percent, driven by an improved product mix and supply chain efficiencies. Brokerage expects to maintain a GM range of 68-68.5 percent for FY26 and FY27. RBA has a long-term target of 70 percent by FY29.
The ROM (pre-Ind AS) rose 14 percent YoY to Rs. 59.2 crores, though margins contracted slightly by 20 bps YoY to 10.4 percent (versus estimates of 10.2 percent). EBITDA (pre-Ind AS) grew 16 percent YoY to Rs. 28.4 crores, with margins holding steady at 5 percent YoY.
RBA continues to prioritise delivery profitability, focusing on strategic pricing optimisation, menu innovation, and cost-efficiency initiatives, particularly in fixed cost areas such as utilities.
In Indonesia, RBA’s revenue declined 4 percent YoY during Q2 FY26, impacted by geopolitical challenges and the closure of 3 Burger King (BK) outlets in the quarter. Despite these headwinds, average daily sales (ADS) for BK Indonesia rose 7 percent YoY.
The ROM (pre-Ind AS) for Indonesia recorded a loss of ₹6.3 crores, compared with a loss of ₹6.7 crores in Q2 FY25 and a profit of ₹0.2 crores in Q1 FY26. The quarterly loss was primarily attributed to higher promotional spending, though adjusted margins remained slightly positive.
RBA has largely completed its store rationalisation program for Burger King in Indonesia and, for now, does not plan further expansion of its Popeyes brand in the region.
In India, RBA continues to emphasise improving store-level unit economics while accelerating store rollouts, which positions the domestic business for sustained long-term growth. The company has outperformed its dine-in peers across key performance metrics in FY25, and this strong momentum is expected to continue through FY26. During the first half of FY26, RBA opened 20 new stores, with a target of reaching 580 stores by the end of FY26 and 800 stores by FY29.
While Indonesia experienced some geopolitical disruptions toward the end of Q2, conditions have since stabilised. The company remains cautious in the near term, focusing on cost-control initiatives and efficiency improvements to mitigate losses and gradually restore profitability in the Indonesian market.
RBA added 20 new restaurants during H1 FY26, and aims to expand its network to 580 restaurants by the end of FY26 from its current count of 533 outlets. Over the medium term, the company plans to open 60-80 new restaurants annually in India, targeting a footprint of around 800 outlets by FY29, thereby driving steady, store-led growth.
The company expects BK Café and ongoing cost-efficiency initiatives to be key growth and margin drivers in the coming years. EBITDA margins are projected to expand gradually, supported by rising dine-in traffic, increased adoption/penetration of BK Café formats, and continued operational efficiencies. As a greater number of stores mature, the improved contribution from newer outlets is likely to further aid margin recovery and profitability.
In Indonesia, RBA anticipates a gradual recovery following the rationalisation of underperforming stores. However, the brokerage acknowledges that near-term challenges may persist.
Financial Performance
Restaurant Brands Asia reported a marginal growth in its revenue from operations, showing a year-on-year increase of more than 11 percent from Rs. 632 crores in Q2 FY25 to Rs. 703 crores in Q2 FY26. During the same period, the company reduced its net loss marginally by around 3 percent YoY from a net loss of Rs. 65 crores to Rs. 63 crores in Q2 FY26.
Written by Shivani Singh
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