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Burger King parent shares rise 5% as Q1 loss narrows; should you buy?
Indian Burger King operator's stock rose as much as 5.2 per cent during the day to ₹85.65 per share, the steepest intraday rise since June 19, 2024. The stock pared gains to trade 3.7 per cent higher at ₹84.4 apiece, compared to a 0.153 per cent decline in Nifty 50 as of 12:50 PM.
Shares of the company snapped a two-day losing streak and currently trade at 2.5 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 0.4 per cent this year, compared to a 4.4 per cent advance in the benchmark Nifty 50. Restaurant Brands Asia has a total market capitalisation of ₹4,908.38 crore.
Restaurant Brands Asia Q1 results
The company reported a net loss of ₹41.94 crore for the three months ended June 30, compared to a ₹49.36 crore loss a year earlier.
Overall revenue from operations for Restaurant Brands Asia grew 7.9 per cent to 698 crore, as a decline in sales in Indonesia partly offset the growth in India. Same-store sales, which refer to sales from stores open for at least 12 months, grew 2.6 per cent in India, led by a growth in dine-in traffic.
Its India store count grew to 519 stores sequentially, with the company adding six stores in the quarter. Westlife missed quarterly profit estimates, and KFC operator Sapphire Food swung to a loss in the first quarter due to higher costs.
Analysts on Restaurant Brands Asia Q1
Restaurant Brands Asia's store additions remained slow during the quarter. However, the company plans to open 60–80 new restaurants annually in India, targeting a total of 800 outlets by Financial Year 2029, driving robust store-led growth, Motilal Oswal said.
As more stores mature, increasing the contribution from new stores will also support margin recovery, the brokerage said. The Indonesian business is expected to see healthy revenue growth and margin expansion in the medium term, following the closure of non-performing outlets and a streamlined portfolio, it said. Motilal Oswal maintained a 'Buy' rating with a target price of ₹135 per share.
Antique Stock Broking said that going forward, management remains focused on driving traffic-led revenue growth through menu innovation and scaling up BK Café, while also working towards improving profitability.
Factoring in elevated employee costs and a one-time impact from early lease termination, the brokerage has reduced its Ebitda estimates for Financial Years 2026 and 2027 by 1 per cent each. Its 'Buy' recommendation is maintained with a revised target price of ₹105.
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