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Robust India performance; confidence-boosting print

* Restaurant Brands Asia (RBA) reported 24% YoY revenue growth in its India business (est. 24%) in 2QFY27, led by a 14% YoY increase in store count. Same-store sales growth (SSSG) was 14% (est. 13%), led by healthy traction in dine-in and delivery channels thanks to value offerings. New launches such as Peri Peri Burgers and Korean Burgers received a strong consumer response and helped drive incremental traffic. Management highlighted that the shift of Navratri and Shradh to Oct’26 had a minimal impact on reported growth, given its balanced vegetarian and non-vegetarian menu.

* India GM was up 200bp YoY/down 40bp QoQ at 70.4% (est. 70%), impacted by an increase in chicken prices. India ROM (pre-Ind AS) rose 54% YoY to INR910m, with margins expanding 250bp YoY to 12.9% (est. 13.2%). Pre-Ind AS EBITDA grew 94% YoY to INR551m (est. INR555m), while EBITDA margin expanded 280bp YoY to an all-time high of 7.8%. Management focuses on improving profitability through pricing optimization, menu innovation, and tighter control over fixed costs, including utilities.

* Indonesia revenue grew 3% YoY. Indonesia RoM (pre-Ind AS) improved to INR8m vs. loss of INR63m in 2QFY26. The company has largely completed the rationalization of Burger King stores and currently does not intend to expand, with its focus remaining on improving profitability.

* Consolidated revenue grew 20% YoY to INR8.5b, led by strong performance in the India business, while Indonesia continued to weigh on overall growth. Reported EBITDA (post-Ind AS) rose 45% YoY to INR1,101m, with margins expanding 220bp YoY to 13%. Consolidated net loss was INR238m vs. INR633m YoY.

* RBA continues to focus on improving store-level economics and maintaining an expansion strategy in India. It added 17 stores in 2Q and increased India store potential to 80-100 stores per year (earlier 60-70 stores) over time. In Indonesia, the turnaround strategy continues and the company focuses on reducing losses through operational improvements and tighter cost controls. The pace and sustainability of the recovery will remain a key monitorable in the coming quarters. We reiterate BUY with a TP of INR125. We value India business at 21x Sep’28E EV/EBITDA (pre-IND AS) and Indonesia EV at INR5b (~0.9x EV/sales Sep’28E).

Key takeaways from the management commentary

* The value strategy focuses on customer acquisition, with the 2-for-INR79 and 2- for-INR99 offers continuing to attract customers. App-exclusive deals also supported engagement, with usage frequency increasing 7% YoY.

* The company also noted that the shift of Navratri and Shradh to Oct’26 had a minimal impact on reported growth, given its balanced vegetarian and nonvegetarian menu.

* Management indicated the potential to increase annual restaurant openings in India from 60-70 currently to 80-100 over time, supported by a larger identified opportunity and a stronger expansion pipeline.

* The company has planned a capital infusion of ~INR1.3b into Indonesia, subject to the required approvals and business milestones. The investment was envisaged at the beginning of the year and is intended partly to support operating losses and working-capital requirements.

Valuation and view

* We maintain our EBITDA estimates for FY27 and FY28.

* RBA continues to focus on improving store-level economics while maintaining an expansion strategy in India. The company added nine stores in 1QFY27 and reiterated its plan to open 80 stores in FY27.

* As more stores mature, improving the contribution of new outlets across the network is expected to support margin recovery. Indonesian business should see a gradual recovery as RBA has rationalized its portfolio by closing nonperforming stores. That said, we expect near-term challenges in Indonesia to persist.

* Inspira Global has acquired a controlling stake in RBA through Lenexis Foodworks and retained the existing operating leadership team. We reiterate BUY with a TP of INR125. We value India business at 21x Sep’28E EV/EBITDA (pre-IND AS) and Indonesia EV at INR5b (~0.9x EV/sales Sep’28E).

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