Restaurant Brands Asia - Multiple Levers To Unlock Growth: Motilal Oswal

Motilal Oswal Report

As highlighted in our quick service restaurant thematic note published in December 2021, Covid-19 has augmented the business opportunities for QSRs resulting in an optimistic outlook for all branded QSR 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 Ltd. (previously Burger King India Ltd.), being a prominent QSR player in India, is also expected to benefit from this shift.

We maintain our positive view on the company underpinned by the following factors:

• Restaurant Brands Asia is tracking well on post-Covid recovery with its average daily sales per store in Q3 FY22 (of Rs 114,000) surpassing the FY20 level (of Rs 110,000), driven by the upbeat festive season and elevated delivery channel sales.

• With ~50-55% of its stores being within malls and metros, the dine-in business is currently lagging in recovery but can rebound sharply as and when full mobility returns. The revival in dine-in business should also support its margins.

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