Shares of Restaurant Brands Asia surged 5.8 percent to Rs 108 per share on May 17 after the company reported a mixed January-March quarter (Q4FY24) performance. However, brokerages remain positive on the company's long-term prospects, given management's expansion plans.
So far in 2024, the Burger King and Popeye operator has declined over 6 percent, which trails the benchmark Nifty 50 index that has seen a rise of 2 percent.
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Analysts at Prabhudas Lilladher shared an 'accumulate' rating on Restaurant Brands Asia, saying that the accelerated store expansion strategy will boost profitability in the long-term.
"India business revenues were a miss in Q4, however EBITDA margins were above estimates led by stable raw material costs and successful application of cost optimisation techniques," the brokerage firm said.
Motilal Oswal analysts also shared a 'buy' rating on the counter, seeing India business outperformance over other markets amid positive same store sales growth (SSSG). "India business revenue was in-line with estimates led by 16 percent YoY increase in store additions and 2 percent SSSG," they wrote in a post-result note.
ALSO READ: Restaurant Brands Q4 results: Burger King operator's net loss widens to Rs 92 crore
Restaurant Brands Asia's consolidated net loss widened to Rs 92 crore in Q4FY24 as against Rs 80 crore a year back due to higher depreciation and interest expenses. However, its consolidated revenue was up 16 percent YoY to Rs 597.1 crore in Q4FY24.
While India's business revenue rose by 20 percent YoY in Q4FY24, Indonesia's revenue climbed by a paltry 6 percent YoY. Consolidated EBITDA, meanwhile, jumped 153 percent YoY to Rs 69 crore in the March-ended quarter.
The company added 16 stores and closed 2 stores in India during the quarter, taking the total count to 455 stores.
Going ahead, the management targets opening of 700 restaurants in India by FY27 and increasing India's gross profit by 69 percent by FY27.
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