Buy Restaurant Brands Asia; target of Rs 175: Sharekhan

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26 Aug, 2025 12:21

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Long-term franchisee agreement with ‘Burger King’ (expiring in Dec 2039), strong store expansion plans (700 stores by FY2026) and a differentiated menu with a focus on value and premiumisation provides it an edge over peers to scale up faster in the coming years. Launch of BK Café (to add ~6-7% to India ADS) and expansion in Indonesia (that will enhance revenues by 25-30%) will incrementally add-on to revenues and profitability in the medium to long term. Consolidated revenues are expected to clock a CAGR of 43.3% during FY2021-24E and EBIDTA margins will improve to ~15% in FY2024 from 2.5% in FY2021. This along with negative working capital will help boost return profile and cash flows.

We initiate coverage on Restaurant Brands Asia (RBA) Ltd (formerly known as Burger King India) with a Buy rating and a PT of Rs. 175. RBA an emerging QSR play with strong store expansion plans and a well-accepted portfolio is trading at an attractive valuation of 27.1x/14.1x its FY2023E/24E EV/EBITDA.

At 15:06 hrs Restaurant Brands Asia was quoting at Rs 132.15, down Rs 0.10, or 0.08 percent.

It has touched an intraday high of Rs 133.40 and an intraday low of Rs 131.15.

It was trading with volumes of 50,815 shares, compared to its thirty day average of 107,574 shares, a decrease of -52.76 percent.

In the previous trading session, the share closed down 0.71 percent or Rs 0.95 at Rs 132.25.

The share touched its 52-week high Rs 171.85 and 52-week low Rs 86.60 on 19 October, 2021 and 12 May, 2022, respectively.

Currently, it is trading 23.1 percent below its 52-week high and 52.6 percent above its 52-week low.

Market capitalisation stands at Rs 6,518.93 crore.

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