RBANSENovember 04, 2025

Restaurant Brands Asia Limited

10,474words

67turns

10analyst exchanges

6executives

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Management on call

Rajeev Varman

WHOLE-TIME DIRECTOR & GROUP CHIEF EXECUTIVE OFFICER, RESTAURANT BRANDS ASIA

Sumit Zaveri

GROUP CHIEF FINANCIAL OFFICER & CHIEF BUSINESS OFFICER, RESTAURANT BRANDS ASIA

Kapil Grover

GROUP CHIEF MARKETING OFFICER, RESTAURANT BRANDS ASIA

Sandeep Dey

BRAND PRESIDENT INDONESIA, RESTAURANT BRANDS ASIA

Gaurav Jain

HEAD CORPORATE DEVELOPMENT & INVESTOR RELATIONS, RESTAURANT BRANDS ASIA

Naveen Trivedi

MOTILAL OSWAL FINANCIAL SERVICES LIMITED

Key numbers — 40 extracted

Rs. 79

d Deluxe Whopper as well, which is the core. So, while we were on the value side with the two for Rs. 79 and two for Rs. 99, and also, we bought in for four weeks Rs. 99 cafe. That was the first effort o

Rs. 99,

well, which is the core. So, while we were on the value side with the two for Rs. 79 and two for Rs. 99, and also, we bought in for four weeks Rs. 99 cafe. That was the first effort on the cafe. After in

Rs. 99

the value side with the two for Rs. 79 and two for Rs. 99, and also, we bought in for four weeks Rs. 99 cafe. That was the first effort on the cafe. After instilling cafe in literally 90% of our restaur

90%

four weeks Rs. 99 cafe. That was the first effort on the cafe. After instilling cafe in literally 90% of our restaurants, this was the first campaign. It was a four-week campaign. It was offering our

91%

that. We also spoke about ‘Digital-First’ brand as we go into the digital era with AI. So, today, 91% of our transactions at our restaurant are all digital. And we continue to push that, we continue

70%

ase of customers. And that effort will come in the next few quarters as you will see it. But just 70% growth in monthly activity over the previous year on the app downloads. So, the app downloads, we

rs,

ry business, the menu that we offer on delivery, the relationships that we have with our aggregators, all those that we have been working on is to bring some efficiency in that respect. Gross margin

Rs. 15 crore

ds, we have been talking about it, that exercise is almost to its end point. We have saved almost Rs. 15 crores, and then subsequently Rs. 4.5 crores on top of that, so approximately Rs. 20 crores in saving o

Rs. 4.5 crore

at exercise is almost to its end point. We have saved almost Rs. 15 crores, and then subsequently Rs. 4.5 crores on top of that, so approximately Rs. 20 crores in saving on G&A. And we will continue looking at

Rs. 20 crore

saved almost Rs. 15 crores, and then subsequently Rs. 4.5 crores on top of that, so approximately Rs. 20 crores in saving on G&A. And we will continue looking at other aspects of controlling G&A, but we have

Rs. 1 million

ole chicken side, which has only helped get better over the last year. We were higher by around Rs. 1 million over the last year in early part when we started this journey, as you could see from November to

Rs. 1.5 million

or hot and cheesy and the whole chicken, we could improve the gap over last year to almost around Rs. 1.5 million. October, the number seems better, closer to almost around Rs. 2 million. So, trajectory-wise,

Guidance — 20 items

Rajeev Varman

opening

“And that effort will continue and it will continue to project into the future years as well.”

Rajeev Varman

opening

“It will be in all restaurants by the end of this year.”

Rajeev Varman

opening

“So, all these efforts that we are putting in, we expect a 1 point reduction in our utility cost.”

Rajeev Varman

opening

“We are starting to see that now as we have rolled this out in several restaurants, but you will see the major impact of this next year as all the restaurants are done.”

Rajeev Varman

opening

“As we will grow the delivery sales, but we will grow it now with additional profitability margins on it.”

Rajeev Varman

opening

“So, the focus of here will be continue to increase our revenues through same store sales by bringing in more traffic into our dine-in, similar to what we are doing in India.”

Rajeev Varman

opening

“Second laser focus will be on Popeyes to eliminate any losses on Popeyes, and bring that business to a neutral.”

Sumit Zaveri

opening

“Our target, we have always mentioned that we would grow at a pace of 60 to 80 restaurants on annual basis.”

Sumit Zaveri

opening

“We expect the year to end at 580 restaurants as we spend.”

Sumit Zaveri

opening

“We have so far 136, we do not expect any substantial shift now on the portfolio side.”

Risks & concerns — 6 flagged

And now after 10 consecutive weak quarters of positive traffic SSSG, I think we should be confident that this strategy of ours is continuing to work.

— Rajeev Varman

We are starting to see that now as we have rolled this out in several restaurants, but you will see the major impact of this next year as all the restaurants are done.

— Rajeev Varman

Popeyes business has been a challenge for us, and we are kind of working on it.

— Rajeev Varman

Our concern, as Raj mentioned, is Popeyes, and we really need to kind of find answers to see how do we improve the overall sales and build some more efficiencies in the P&L there.

— Sumit Zaveri

Then you will start seeing the impact of that in Q2, Q3, Q4 of next year.

— Rajeev Varman

My last question is, we know that last two, three years has been difficult for consumption.

— Manoj Dua

Q&A — 10 exchanges

Hello. Good morning. So, in Q4 FY '25, we were discussing that in one, two quarters, we will monitor the Indonesia business closely to make a decision on what to do with it. So, what are you thinking about it right now?

Rajeev Varman

The efforts are the same. We are in the same boat, we are working towards that. So, while we continue to improve the business, the challenges on Popeyes, we have already kind of shared with you, but it's only 25 restaurants. And, of course, we have to find solutions, whether we keep the business or the next person comes in and takes over the business. The solutions need to be rolled to those people so they can continue to build it. So, the efforts remain the same. Right now, we are pretty excited about the Burger King part of the business over there because we can see, evidently, recovery on t

Hi, sir. Good morning. Congratulations on a good execution in India business. Sir, there is some benefit of GST deduction on certain RM costs, right? So, how are we thinking in terms of either higher promotion, menu price reductions, etc. If you could throw some light on that?

Rajeev Varman

Yes. So, these came in at the tail end of the quarter, as you know, so the impact is not visible anywhere. Further on that, as a company, we have decided and as an industry, I think at large, it has been a decision that wherever, which item we found a GST benefit, we passed on that GST benefit in that item directly to the consumer. Our efforts are on the side of supply chain, on distribution cost. We just opened two more distribution centers in India. That is going to bring a reduction in distribution cost in those restaurants around those states and those cities. So, we continue to optimize o

Hi, good morning and thanks for taking my question. First, the consistency of performance in India is fantastic, given the industry background and appreciate the efforts you guys put in there. I will add just one question. In the opening comments, it was mentioned about the GM not translating into the ROM given the reinvestment in the team at restaurant levels. And it was also mentioned that in a couple of quarters, this should rationalize. What I am not clear is, given the improvement in guest experience since these initiatives have been put in place, why are we in a hurry to rationalize it b

Sumit Zaveri

Thank you, Manjeet, for that question. So, just to clarify, obviously we will not pull it back hurriedly. The way we do it is that we see the pace at which the efficiency in terms of work levels that improves at the restaurant level. And linked to that efficiency improvement is where we will do the adjustments. Typically, we should be able to do that adjustments over the next few quarters. So, we will obviously not pull back the headcount because we feel the numbers are higher. That's something is what we would certainly not do, Manjeet. And absolutely, you are point on that a better service w

Hi, team. Congratulations on sustained performance in India. One question from my side, I understand it may be a bit early to call out, but could you provide some sense on how the Whopper Deluxe is performing and are we seeing any early signs of upgradation from the two for Rs. 79, two for Rs. 99 product?

Kapil Grover

And this is Kapil. I will take that question. Yes. So, Whopper Deluxe early days, as I said, it's a core menu offering. It is sitting at a price point of approximately Rs. 150. The two, for customer and the core customers are very different personas. There's a value-seeking customer on one end of the barbell, as Raj explained in the beginning, and there's a core customer who's driven by innovation, taste, quality, and other sort of variables. So, this is a long-term strategic plan. We have got some initial trials. We have got some really good trials. We have seen consumers come in and try the

Thank you for taking my question, and I admire companies' efforts in cross-margin same-sell store growth, ADS, traffic, and customer experience in the product expansion. I think you have touched this point, but can you give a little bit more structure to all this effort? When can we trickle into EBITDA, and going forward, any timeframe or something like that? What is the mental model we have to use?

Rajeev Varman

Yes, you know. Like I said, there's two-fold efforts. One is about optimizing the current P&L, which is building a P&L strength based on current volumes, right, current revenues, current ADS, current traffic. Those efforts are on. We continue to show you results every quarter on that. Every quarter, you go back, look at our results, look at the results of the previous quarter of the previous year. You see a movement on that. Those movements are on the net of all the initiatives that Sumit Zaveri and his entire team in maintenance and equipment, and all the other people that are working towards

I am listening to the answers which their, management is giving to my question.

Sumit Zaveri

Talked about, so, Manoj. We will just finish this answer, you asked. So, Manoj, there will always be a customer interplay between dine-in and delivery, but what is important to really note from as far as we are concerned is that we are focused on growth and profitability on both the channels through the growth of transactions. And if you really look at the transaction growth that we have seen in dine-in as well, as well as delivery is a classic reflection of that. But obviously, we do not share the numbers on the transaction growth, but we can at least tell you that both these channels are gro

Hi. Thanks for the opportunity. This one question, and then you partly answered the question at different points of time on the call, but just wanted to understand if we have to narrow down the problem statement for us and perhaps for the industry as well in India, is it more to do with consumer sentiment not spending enough or would you say that the competitive landscape has changed dramatically post-COVID and perhaps there are more players fighting for the same wallet share now?

Rajeev Varman

Look, when you are sitting on the top of, almost 10 quarters now of positive traffic into our business, I think I would say that the traffic in the business is there. What we have seen in the last several quarters is the shift is more from the premium towards value. So, if you are not a value customer, and you pretty much see that in the industry, if you look at the industry, it has moved towards value and more and more younger and college students and so forth are getting into the business through the value stream, right? So, that is the shift that you have seen in the last post-COVID, you ar

Thanks for the opportunity. And we have been doing pretty well compared to what the industry is doing. Sir, it's been eight quarters since our ADS has been stuck in the range of around Rs. 105,000 to Rs. 119,000. Although we have ambitions to reach Rs. 125,000, Rs. 130,000, Rs. 135,000 eventually, do you think with the kind of uptick that we have seen in October and with the GST curve and hopefully the consumer cycle reviving, we can reach that number, at least Rs. 125,000 ADS number in the near term, maybe Q3, Q4, or do you think it will take some more time for us to reach that number?

Rajeev Varman

Very good question, Ankit. Again, I will not make a forward-looking statement on my answer, but I can tell you this, that last year we ended up for the whole year at Rs. 114,000 and right now we have reported Rs. 119,000 for the previous quarter and I think it was Rs. 121,000 for the quarter before that. So, look, again, what I answered to Tejas, these small markers are coming and we are moving forward with them. While we can build an ambition to get back to Rs. 125,000 and Rs. 135,000, hopefully even higher sales, we are disciplined right now. They are saying that can we deliver 13%, 14% rest

Sure.

Management

Thank you, Iqra. Thank you everyone for joining in. I really appreciate your confidence in the business, your appreciation and all the motivation you provide to the team over here. We are very thankful to everyone that is kind of giving us this nudge and push and asking tough questions. We like those as well. Look, the team is completely focused on getting this business in a decent scientific and organized way over time period to grow into a very, very strong business here in India. I think we have demonstrated over the last 8 to 12 quarters how we can bring a very efficient P&L, how we can st

Management

Speaking time

Rajeev Varman

Moderator

Sumit Zaveri

Ankit Gupta

Kiran Gadge

Anuj D.

Manoj Dua

Devanshu Bansal

Tejas Shah

Kapil Grover

Opening remarks

Naveen Trivedi

Yes. Hi. Good morning, everyone. On behalf of Motilal Oswal, I, Naveen Trivedi, would like to welcome you all to the Restaurant Brands Asia Q2 FY '26 earnings conference call. From the management today we have, Mr. Rajeev Varman – Whole-Time Director and Group CEO; Mr. Sumit Zaveri – Group CFO and Chief Business Officer; Mr. Kapil Grover – Group CMO; Mr. Sandeep Dey – Brand President (Indonesia); and Mr. Gaurav Ajjan – Head (Corporate Development & IR). I would now hand over the call to the management for the opening remarks. Over to you, sir.

Rajeev Varman

Thank you, Naveen, and thank you, Iqra. Good morning to everyone. I hope you guys had a wonderful Diwali and the Holiday Season that comes with it. So, good morning. And let's start this with some overview on where we are. Then Sumit will carry you through the finance, and then Kapil will carry you through the marketing functions. And then, finally, we will have Sandeep speak about Indonesia and then we will close the call with the Q&A led by Gaurav. So, key priorities for India. So, priorities for India haven't changed. We are set on our goal, just, which we shared with you at least two years ago. And now we continue in that path. So, on the dine-in side, our sheer focus and laser focus is on continuing to grow our traffic in our dine-in. And now after 10 consecutive weak quarters of positive traffic SSSG, I think we should be confident that this strategy of ours is continuing to work. We continue to drive more and more traffic into our dine-in restaurants and dine-in sales. This basi

Sumit Zaveri

Thank you. Thank you, Raj. I will just kind of complete the discussion on Indonesia, which is slicing. As Raj was mentioning, that having completed the store rationalization that we were working on, substantially reducing corporate overheads, our current focus is, how do we bring overall ADS in the business better or higher than where we were last year. We have been continuing that journey through various value initiatives. We have kind of listed those various initiatives out here clearly. It is led by chicken as well as burgers. And then there are a few new product launches that we have done recently on the whole chicken side, which has only helped get better over the last year. We were higher by around Rs. 1 million over the last year in early part when we started this journey, as you could see from November to May, June also. When we kind of did the second round for hot and cheesy and the whole chicken, we could improve the gap over last year to almost around Rs. 1.5 million. Octobe

Kapil Grover

Thanks, Sumit. And good morning, everyone. While you have heard Sumit and Raj talk about how we have had consistent traffic growth, we have had good sales growth with 2.8% in this quarter, and also continue to improve profitability. The strategic initiatives behind this growth, I will talk about three things. One is our focus on driving more growth through burgers. This last quarter, in addition to the Korean program in the Q1 and the King's Collection relaunch, we added Whopper Deluxe. Now, this is an extension of the Whopper brand into the core menu at around the price point of Rs. 140, Rs. 150. Whopper, as you are aware, is a much loved product of ours. It's a very differentiated product. Consumers see great value for money in the Whopper because it offers you seven layers of taste compared to sort of basic meals available otherwise. It adds back to the brand equity because it's an ownable proposition. It is a unique product available only at Burger King. And now we have extended th

Gaurav Ajjan

Thanks, Kapil. Good morning, everyone. Our outlook remains unchanged from the last quarter. We intend to open 60 to 80 stores every year till FY '29, which will bring us closer to a number of about 800. If you recall, we finished last year with 513 stores. We have added a net of 20 stores in H1. You will see the pace of growth increasing in the second-half of the year as we look to add another 45 to 50 stores in the remainder of the year. This will bring us closer to a number of about 580. On gross margins, our gross margin for FY '25 was 67.7%. We have witnessed a margin improvement of 60 basis points this quarter to 68.3%. This has been on the back of changes in the menu mix and on supply chain and distribution efficiencies. We intend to continue this journey of margin improvement, and this will bring us to a number closer to 70% by FY '29. Thank you all for joining in the call. I would request the moderator to please open up the floor for Q&A.

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