Apr'25 View on Restaurant Brands Asia Ltd

Burger King India Ltd is an international QSR chain in India. It started operations in 2014 and has established ~456 restaurants across major cities. The company is an Exclusive National Master Franchisee of Burger King in India and its subsidiaries are Exclusive National Master Franchisee of the brands Burger King and Popeyes in Indonesia. The Stock looks to touch 90 very soon on back of following inputs. Rationale: • BK India reported a 0.5% same store sales (SSS) decline. • We will keep an eye on the progress on the EBITDA margin front. • We expect earnings to grow by 26.4% in FY26E & by 34% in FY27E. • Stock is currently trading at valuation of (71.8x) P/E FY27E EPS. • We value RBA using Sum of the Parts (SoTP) based fair value of Rs 82. Q3FY25 Earnings Update: Positives: • Revenues grew 11.2% yoy to Rs492.1 cr (in line). • EBITDA margin was a tad better than our moderated estimate. • RBA is prioritizing profitability over store network expansion in India/Indonesia. • BK India opened 46 net new stores qoq, taking the total to 510. • The dine-in channel delivered positive SSSG (same store sales growth). Negatives: • Indonesia’s performance remained weak on both growth & profitability fronts.