Accumulate Restaurant Brands Asia; target of Rs 112: Prabhudas Lilladher

What happened

Prabhudas Lilladher issued an accumulate rating on Restaurant Brands Asia with a target of Rs 112. RBA reported same-store sales growth of 14%, average daily sales of Rs131k, and turned adjusted profit after tax positive, while its Indonesia business posted an EBITDA loss of Rs119mn.

Confirmed

Global impact / market context

A positive profit after tax means the company earned more than it spent after adjustments, helped by operating leverage, which means fixed costs spread over more sales. If this continues, earnings per share could reach Rs1.6 by FY28, supporting the target price.

Analyst inference

RBA's India strategy relies on value combos like two veg burgers at Rs79, menu innovation, and cost cuts, while Indonesia remains a drag with continued EBITDA losses. The shift from a possible sellout to revamping existing stores makes the pace of improvement a key factor for profitability.

Analyst inference

What to watch

1. Indonesia business posted an EBITDA loss of Rs119mn, and the company shifted from a potential sellout to a focused revamp of existing stores, with the pace of improvement remaining a key monitorable. Confirmed
2. RBA plans a kids program launch in December and continues value-led combos, including two veg burgers at Rs79 and chicken at Rs99, which could support in-store traffic growth. Proposed
3. Higher other income of Rs836mn in FY27 and Rs1,678mn in FY28, driven by capital infusion, is expected to support earnings per share, so any change in that capital infusion matters for profit. Analyst inference

Evidence

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