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Motilal Oswal Report
Restaurant Brands Asia Ltd.'s India business posted 20%/48% YoY growth in revenue/Ebitda (inline) in Q3 FY24. Store addition was healthy (added 38 stores), with same-store sales growth at 2.6% (estimate: 3.5%).
Amid a tough demand environment, most quick service restaurant brands are expected to post muted growth metrics (SSSG, average daily sales). We believe Restaurant Brands Asia's performance is better than its peers'.
As the near-term industry demand outlook remains weak, Restaurant Brands Asia has lowered its SSSG guidance for FY24 to 3% from 6%; however, it has retained 8% SSSG guidance for the medium term.
Despite a deceleration in growth metrics, Restaurant Brands Asia could improve Restaurant Ebitda margin (pre IND AS) to 12%, up 180 basis points on YoY and 150 bp on QoQ.
We do not expect such margin improvements for peers in Q3.
Indonesia business revenue rose 1% YoY (miss) to Rs 1.6 billion, largely due to store adds. Indonesia Ebitda loss narrowed to Rs 24 million (estimate loss Rs 76 million and Rs 181 million/Rs 72 million in Q3 FY23/Q2 FY24). We maintain our 'Buy' rating on the stock.
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