RBA - Restaurant Brand

📊 NSE: RBA 🏢 Hotels 📅 Last Updated: 12/14/2025 11:50

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 37.8% in FY2023 to INR 2,054.3 Cr. India standalone revenue grew 52.5% to INR 1,439.7 Cr in FY2023. 9M FY2025 consolidated growth was modest at 4.2% due to subdued performance in Indonesia and inflationary pressures in India.

Geographic Revenue Split

India operations contribute approximately 70% of consolidated revenue (INR 1,439.7 Cr out of INR 2,054.3 Cr in FY2023), with the remainder from Indonesia. Indonesia's contribution was impacted by store closures and geopolitical issues affecting local brand preferences.

Profitability Margins

Gross margins improved to 68.3% in Q2 FY2026 from 67.7% in Q1. Net profit margin was -4.45% in FY2025 compared to -3.92% in FY2024. Operating profit margin stood at 14.45% in FY2025, up from 13.51% in FY2024.

EBITDA Margin

Reported Company EBITDA margin was 10.8% (INR 76.3 Cr) in Q2 FY2026, a 24.7% YoY growth. Restaurant-level EBITDA margin was 16.8% (INR 117.9 Cr). The company aims for a long-term gross margin of 70%.

Capital Expenditure

RBA raised INR 500 Cr through a QIP in March 2025 to fund aggressive expansion. Previous funding includes an IPO in 2020 and a QIP of INR 500 Cr in February 2022. Expansion is primarily focused on meeting the MFDA requirement of 700 stores in India by 2026.

Credit Rating & Borrowing

ICRA assigned an [ICRA]A- (Stable) rating. External debt is limited to the Indonesian subsidiary at INR 159.8 Cr as of March 2023. Standalone India operations have no external debt except lease liabilities.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include chicken, vegetables, buns, and dairy products. The company emphasizes food free from synthetic colors and artificial flavors. Raw material costs are managed through supply chain efficiencies to target a 70% gross margin.

Capacity Expansion

Current Indonesia capacity is 143 Burger King and 25 Popeyes outlets as of FY2025. Planned expansion in India requires opening at least 700 restaurants by December 31, 2026, as per the Master Franchise Development Agreement (MFDA).

Raw Material Costs

Raw material costs are approximately 31.7% of revenue based on a 68.3% gross margin. Efficiencies in the supply chain and GST deductions on certain RM costs have supported margin expansion by 0.6% in recent quarters.

Manufacturing Efficiency

Average Daily Sales (ADS) for India stood at INR 120,000. The company is focusing on 'volume leverage' where higher sales at existing stores (SSSG) will drive better absorption of fixed costs.

Logistics & Distribution

The company is implementing a targeted delivery strategy aimed at improving margins rather than just volume, which contributed to a 0.6% margin improvement in Q2 FY2026.

📈 Strategic Growth

Expected Growth Rate

4-5%

Growth Strategy

Growth is driven by three levers: P&L efficiency, volume increases through Same Store Sales Growth (SSSG), and new restaurant construction to reach 700 India stores by 2026. Indonesia strategy focuses on closing underperforming stores and achieving cash breakeven.

Products & Services

Quick Service Restaurant (QSR) products including Burger King burgers, chicken products, Popeyes fried chicken, and digital ordering services via the BK App.

Brand Portfolio

Burger King, Popeyes.

New Products/Services

Expanded chicken product range in Indonesia and menu innovation in Popeyes to improve unit-level economics. The BK App is a key pillar for future CRM and digital engagement.

Market Expansion

Aggressive expansion in India to reach 700 stores by Dec 2026. Indonesia expansion is currently paused in favor of 'portfolio optimization' and closing underperforming outlets.

Strategic Alliances

Master Franchise Development Agreement (MFDA) with BK AsiaPac and QSR Asia Pte Ltd for exclusive rights in India and Indonesia.

🌍 External Factors

Industry Trends

The QSR industry is seeing a shift toward digital capabilities and delivery-led growth. RBA is positioning the BK App as a central CRM tool to increase order frequency among Gen Z and youth.

Competitive Landscape

Faces intense competition from established international QSR brands and local unorganized players in both India and Indonesia.

Competitive Moat

Moat is based on exclusive long-term MFDA rights (valid until 2040 for Indonesia) and a strong brand identity. Sustainability depends on meeting store-count mandates and maintaining food quality standards.

Macro Economic Sensitivity

Highly sensitive to consumer spending and inflation. Expected revival in demand is linked to potential tax cuts and interest rate reductions in FY2026.

Consumer Behavior

Shift toward dine-in recovery post-pandemic and increasing demand for value-segment products in response to inflationary pressures.

Geopolitical Risks

Significant impact in Indonesia where geopolitical tensions have shifted consumer preferences away from international brands, leading to operating losses.

⚖️ Regulatory & Governance

Industry Regulations

Must comply with FSSAI standards in India and similar food safety norms in Indonesia. Non-compliance with MFDA terms (e.g., store counts or D/E ratio > 2x) could lead to termination of franchise rights.

Taxation Policy Impact

The company is benefiting from GST deductions on certain raw material costs, which it is evaluating for reinvestment into promotions or margin retention.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the turnaround of the Indonesia business, which saw an EBITDA loss of INR 33 billion in a recent period. Continued net losses due to high depreciation from rapid expansion (INR 242.2 Cr loss in FY2023) pose a risk to net worth.