Buy Restaurant Brands Asia; target of Rs 150 Sharekhan

Sharekhan's research report on Restaurant Brands Asia

Restaurant Brand Asia (RBA) posted strong performance in Q2 with consolidated revenues rising 19% y-o-y; EBIDTA margins improved by 421 bps y-o-y to 9%. India business‘ SSSG grew by 3.5% in H1; H2 guidance at 8-10%; FY24 SSSG will be at ~6% and for FY25 it is likely to be at ~8%. Indonesia business to break even by FY2024-end; value offering and introduction of chicken in menu is driving higher traffic for Indonesia business.

Outlook

Stock trades at 25x/16x/12x its FY2024E/FY2025E/FY2026E EV/EBIDTA. We maintain a Buy with an unchanged price target (PT) of Rs. 150.