Restaurant Brands Asia Limited — Credit Ratings, 01-04-2025: Credit Rating

Restaurant Brands Asia Limited (formerly Burger King India Limited) has reaffirmed its long-term credit rating of [ICRA]A- (Stable) for its enhanced term loans, raising the rated amount to ₹200 crore. Additionally, credit ratings have been assigned for new facilities, including long-term fund-based working facilities (₹81.20 crore), and short-term non-fund based interchangeable limits (₹25 crore), along with a total unallocated limit of ₹18.80 crore.

The company experienced a modest revenue growth of approximately 4.2% year-on-year in 9M FY2025, reflecting challenges in its Indonesian operations and inflationary pressures affecting demand in India. Planned store expansions and improved consumer spend are anticipated to bolster revenues, particularly following tax cuts aimed at stimulating economic activity.

Despite operational profitability enhancements, net losses persist, primarily due to a low Return on Capital Employed (RoCE) and substantial depreciation costs. The recent ₹500 crore QIP is expected to address liquidity and bolster capital for new openings, a crucial move given the competitive landscape involving organized and unorganized sectors.

Overall, the credit outlook remains Stable, supported by a growing product mix geared towards consumer preferences and a solid management team. Continuous monitoring of the company’s performance, especially regarding its Indonesian subsidiary and adherence to franchise agreements, remains vital for future growth and ratings stability. Investors may consider a cautious long-term hold, weighing operational risks against the potential for recovery and expansion.