💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue reached INR 305 Cr in Q2 FY26, a 2.6% sequential increase. Barbeque Nation India revenue stood at INR 230 Cr (+0.5% QoQ). International operations grew 27% YoY to INR 28 Cr. Premium Casual Dining (CDR) segment grew 17% YoY.

Geographic Revenue Split

India operations contribute approximately 75.4% of total revenue (INR 230 Cr of INR 305 Cr). International/Middle East operations contribute approximately 9.2% (INR 28 Cr), with the remainder from other segments.

Profitability Margins

Gross margin for Q2 FY26 was 66.2%, down 150 bps sequentially from Q1 FY26. Pre-Ind AS restaurant operating margins (ROM) were 8.2%, impacted by a 1.2% increase in marketing spend and 1% higher food costs from festivals. Matured restaurants maintained higher ROM at 9.6%.

EBITDA Margin

Consolidated reported EBITDA was INR 37.7 Cr with a 12.4% margin in Q2 FY26, a 17.2% YoY decline. Adjusted operating EBITDA (Pre-Ind AS 116) stood at INR 3.3 Cr (1.1% margin).

Capital Expenditure

Planned capital expenditure for FY2026 is INR 90-100 Cr to support the opening of 30-35 new outlets. Average CAPEX per new store is approximately INR 2.5 Cr with a 4-year payback period.

Credit Rating & Borrowing

Total debt as of March 31, 2025, was INR 757.5 Cr, primarily comprised of lease liabilities (INR 688.0 Cr). External borrowings are low at INR 69.5 Cr. Long-term repayment obligations are INR 19.2 Cr for FY2026 and INR 11.6 Cr for FY2027.

⚙️ Operational Drivers

Raw Materials

Food ingredients and consumables including meat, vegetables, and spices. Import of raw materials accounted for INR 85.46 Cr in FY2025.

Import Sources

Not specifically disclosed, though international operations are centered in the Middle East (Saudi Arabia, UAE).

Capacity Expansion

Current network consists of 241 restaurants as of Q2 FY26. The company plans to add 9-12 restaurants every quarter to achieve a target of 300+ stores by FY2027.

Raw Material Costs

Gross profit was INR 201.9 Cr in Q2 FY26 (66.2% margin). Food costs increased by approximately 100 bps during Q2 FY26 due to the month-long Khau Galli Food Festival.

Manufacturing Efficiency

Transaction growth was 4% over the July-October 2025 period. Mature stores in the international segment deliver 20%+ restaurant operating margins.

📈 Strategic Growth

Expected Growth Rate

30%

Growth Strategy

Growth will be driven by a 30% annual growth target in the international business, opening 30-35 new outlets in FY26, and scaling the Premium CDR segment. Volume growth is prioritized through value-driven group offers (Sizzling 7, Big Buffets) to drive transaction growth and operating leverage.

Products & Services

Buffet-style dining, delivery services, and curated food festivals (Khau Galli). Specific value offerings include 'Sizzling 7', 'Big Buffets', and 'Grill & Chill'.

Brand Portfolio

Barbeque Nation, United Foodbrands Limited (UFBL), Toscano (implied via Premium CDR).

New Products/Services

Launched the 'Khau Galli' Food Festival and new value-based group offers. Direct digital sales are being promoted through a new deal module on the company app and website.

Market Expansion

Expansion into Saudi Arabia with the first restaurant opened in Riyadh in Q2 FY26. Plans to open 4-5 new international restaurants in FY26.

Market Share & Ranking

Leading player in the fine dining/CDR segment in India with a geographically diversified presence.

🌍 External Factors

Industry Trends

The industry is facing a 'difficult timeline' with sluggish demand but a shift toward value-driven group dining. UFBL is positioning itself by investing in marketing (up 1.2%) to recapture traffic.

Competitive Landscape

Heightened competitive pressure from other fine dining and casual dining players is currently impacting the ability to maintain historical 18%+ margins.

Competitive Moat

Moat is based on the 'Barbeque Nation' brand equity and a unique DIY-grill format. Sustainability is supported by a 4-year store payback period even during weak cycles.

Macro Economic Sensitivity

Highly sensitive to discretionary spending trends; FY2025 revenue declined 1.7% YoY due to a slowdown in consumer spending.

Consumer Behavior

Shift toward value-seeking behavior; transaction growth of 4% was achieved only after implementing group-based discounts.

Geopolitical Risks

Exposure to Middle East markets (Riyadh, Saudi Arabia) introduces regional geopolitical and regulatory risks.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with food safety standards and health regulations is critical to mitigate risks associated with customer safety.

Environmental Compliance

The company adheres to ESG principles including stewardship and transparency as part of its corporate governance framework.

⚠️ Risk Analysis

Key Uncertainties

Ability to reverse negative SSSG (-1.1% in India for Q2 FY26) and the success of the ramp-up of 35 new stores in a weak macro environment.

Geographic Concentration Risk

High concentration in India (75%+ of revenue), with specific focus on urban markets like Bangalore.

Third Party Dependencies

Dependency on mall operators and landlords for restaurant sites, reflected in INR 688 Cr of lease liabilities.

Technology Obsolescence Risk

Digital transformation is underway with a focus on direct digital sales via the company app to reduce dependency on third-party aggregators.

Credit & Counterparty Risk

Liquidity is adequate with INR 19.5 Cr in free cash and INR 15 Cr in working capital limits (INR 7 Cr unutilized).