Restaurant Brands Asia Limited — Investor Meet, 31-01-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Restaurant Brands Asia Limited reported revenues of INR 494 Cr for the quarter, reflecting an 11.2% year-over-year growth, albeit with a slight quarter-over-quarter increase of 0.7%. The company reached 510 operational stores in India, adding 46 stores in the last quarter alone. The average daily sales (ADS) stood at INR 114, with same-store sales growth (SSSG) flat at -0.5%. Gross margins improved to 67.8%, contributing to a restaurant-level EBITDA of INR 59 Cr, marking a remarkable 14.5% increase quarter-over-quarter and 9.7% year-over-year. Total company-level EBITDA was INR 30.9 Cr, up 26.7% from the previous quarter.

**Future Outlook and Growth Drivers:** Management reiterated their commitment to enhancing dine-in traffic and digital initiatives, citing an impressive 90% of orders now processed digitally through self-ordering kiosks and apps. Focus areas include driving innovation, customer engagement via loyalty programs, and continuous improvement in profitability, particularly in the delivery channel.

**Order Book and Operational Updates:** The operational strategy emphasizes further strengthening the dine-in experience post-COVID, leveraging new menu items like chicken puffs and optimized price promotions. The Indonesia segment reported a revenue drop to IDR 269 billion, attributed mainly to store closures; however, traffic recovery signals potential future growth.

**Analyst Q&A Insights:** Key areas discussed included:

- **Revenue and Profitability:** Management confirmed sustained demand in India, particularly for dine-in services. Efforts towards optimizing delivery profitability through reduced discounts and lower commission rates with delivery aggregators were emphasized.

- **Market Position and Competitive Landscape:** The team expressed confidence in their positioning, dismissing broader market concerns, and highlighting improvements in dine-in trends and brand resilience.

- **Operational Challenges or Risks:** While acknowledging risks in Indonesia, management outlined corrective measures and a proactive strategy to keep operational costs in check.

- **Capex and Capital Allocation:** Plans for capital allocation focus on the India market due to growth potential, with affirmations of no new store openings in Indonesia to prioritize profitability.

- **Strategic Priorities and Long-Term Vision:** Management's commitment to driving profitability through innovative offers and significant digital investments was evident, with strong growth anticipated from both dine-in and digital channels.

**Market or Regulatory Updates:** The geopolitical situation in Indonesia has improved, contributing to increased customer traffic and positive sentiment towards dining at Western QSRs.

**Strategic Focus Areas:** Emphasis on digital transformation, customer engagement, and streamlining costs indicates a robust approach to capturing market share and responding to consumer demand shifts.

**Investor Insight:** The financial health, combined with management's clear growth strategy and recent performance indicators, align positively for a potential 'buy' position. Continued attention to their cost structure and operational efficiencies should bolster future profitability in both markets.