Shares of a global QSR chain in India and the nationwide grasp franchisee of the Burger King model in India are in give attention to the inventory exchanges, after Motilal Oswal maintained a ‘purchase’ ranking on the inventory with a goal value of Rs. 120 apiece, indicating a possible upside of round 86 % from present value ranges.
With a market cap of Rs. 3,755.5 crores, shares of Restaurant Manufacturers Asia Restricted is presently buying and selling within the inexperienced at Rs. 64.5 on BSE, up by round 0.5 %, in comparison with its earlier closing value of Rs. 64.21. The inventory has delivered unfavourable returns of round 24 % in a single 12 months, and has fallen by over 8 % within the final one month.
Brokerage Goal & Outlook
Home brokerage agency Motilal Oswal Monetary Providers has reiterated its “purchase” ranking on Restaurant Manufacturers Asia Restricted (RBA), setting a goal value of Rs. 120 per share, representing a possible upside of almost 86 % from present value ranges.
The brokerage highlighted its valuation method, assigning a 25x Sep’27E EV/EBITDA (pre-Ind AS) a number of to the corporate’s India operations, whereas valuing the Indonesia enterprise at round Rs. 500 crores, equal to 0.7x EV/Gross sales (Sep’27E).
RBA reported a 16 % YoY income progress in its Indian enterprise for Q2 FY26, pushed by a 15 % YoY enhance in retailer additions. Identical-store gross sales (SSS) grew 2.8 % YoY, supported by wholesome traction throughout each dine-in and supply channels, in addition to from value-led choices. The corporate additionally recorded a strong begin to Q3 FY26, aided by the GST fee discount and a wholesome festive season, with administration expressing confidence in sustaining progress momentum by the quarter.
Throughout Q2 FY26, GM for the India enterprise improved by 80 foundation factors (bps) YoY and 60 bps QoQ to 68.3 %, pushed by an improved product combine and provide chain efficiencies. Brokerage expects to take care of a GM vary of 68-68.5 % for FY26 and FY27. RBA has a long-term goal of 70 % by FY29.
The ROM (pre-Ind AS) rose 14 % YoY to Rs. 59.2 crores, although margins contracted barely by 20 bps YoY to 10.4 % (versus estimates of 10.2 %). EBITDA (pre-Ind AS) grew 16 % YoY to Rs. 28.4 crores, with margins holding regular at 5 % YoY.
RBA continues to prioritise supply profitability, specializing in strategic pricing optimisation, menu innovation, and cost-efficiency initiatives, significantly in fastened price areas similar to utilities.
In Indonesia, RBA’s income declined 4 % YoY throughout Q2 FY26, impacted by geopolitical challenges and the closure of three Burger King (BK) retailers within the quarter. Regardless of these headwinds, common day by day gross sales (ADS) for BK Indonesia rose 7 % YoY.
The ROM (pre-Ind AS) for Indonesia recorded a lack of ₹6.3 crores, in contrast with a lack of ₹6.7 crores in Q2 FY25 and a revenue of ₹0.2 crores in Q1 FY26. The quarterly loss was primarily attributed to larger promotional spending, although adjusted margins remained barely constructive.
RBA has largely accomplished its retailer rationalisation program for Burger King in Indonesia and, for now, doesn’t plan additional growth of its Popeyes model within the area.
In India, RBA continues to emphasize enhancing store-level unit economics whereas accelerating retailer rollouts, which positions the home enterprise for sustained long-term progress. The corporate has outperformed its dine-in friends throughout key efficiency metrics in FY25, and this sturdy momentum is predicted to proceed by FY26. Throughout the first half of FY26, RBA opened 20 new shops, with a goal of reaching 580 shops by the tip of FY26 and 800 shops by FY29.
Whereas Indonesia skilled some geopolitical disruptions towards the tip of Q2, circumstances have since stabilised. The corporate stays cautious within the close to time period, specializing in cost-control initiatives and effectivity enhancements to mitigate losses and regularly restore profitability within the Indonesian market.
RBA added 20 new eating places throughout H1 FY26, and goals to increase its community to 580 eating places by the tip of FY26 from its present depend of 533 retailers. Over the medium time period, the corporate plans to open 60-80 new eating places yearly in India, concentrating on a footprint of round 800 retailers by FY29, thereby driving regular, store-led progress.
The corporate expects BK Café and ongoing cost-efficiency initiatives to be key progress and margin drivers within the coming years. EBITDA margins are projected to increase regularly, supported by rising dine-in visitors, elevated adoption/penetration of BK Café codecs, and continued operational efficiencies. As a larger variety of shops mature, the improved contribution from newer retailers is prone to additional help margin restoration and profitability.
In Indonesia, RBA anticipates a gradual restoration following the rationalisation of underperforming shops. Nevertheless, the brokerage acknowledges that near-term challenges might persist.
Monetary Efficiency
Restaurant Manufacturers Asia reported a marginal progress in its income from operations, exhibiting a year-on-year enhance of greater than 11 % from Rs. 632 crores in Q2 FY25 to Rs. 703 crores in Q2 FY26. Throughout the identical interval, the corporate lowered its internet loss marginally by round 3 % YoY from a internet lack of Rs. 65 crores to Rs. 63 crores in Q2 FY26.
Written by Shivani Singh
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