Target: ₹150
CMP: ₹100.25
Covid-19 has augmented the business opportunities for QSRs resulting in an optimistic outlook for all branded players. Both delivery and takeaway channels were in focus over the last two years as the consumers developed new habits of food consumption.
Even as dine-in revives, the contribution of delivery would be elevated than pre-COVID levels. Covid has, therefore, permanently shifted the QSR business model towards an omni-channel play.
Restaurant Brands Asia (RBA; previously Burger King India), being a prominent QSR player in India, is also expected to benefit from this shift.
With an already aggressive store addition outlook, RBA is well placed to deliver a strong domestic growth. BK Café is likely to be a key growth driver going ahead.
Along with rapid topline growth, RBA is geared up to deliver EBITDA margin expansion driven by: dine-in recovery, addition of BK Café; and cost saving initiatives.
As more and more stores mature, declining contribution of new stores in the network would also help reduce the margin drag. Indonesia business should also witness a healthy topline growth and margin expansion in the years ahead.