Restaurant Brands Asia plans 80 FY27 openings as Motilal Oswal sees 75% upside
Motilal Oswal retained its Buy call and Rs 125 target on Restaurant Brands Asia after India revenue rose 24% year on year in the June quarter and gross margin expanded to 70.8%. The brokerage cited menu-led footfall, delivery growth, supply-chain gains and an 80-store FY27 expansion plan.
What happened
Restaurant Brands Asia reported stronger-than-expected India performance, with revenue up 24% and gross margin reaching 70.8%. Motilal Oswal retained its Buy
Key facts
- Motilal Oswal target price: Rs 125
- Potential upside: 75%
- India revenue growth: 24% year-on-year in June quarter
- Brokerage India revenue-growth expectation: about 19%
- India gross margin: 70.8%
- Gross-margin expansion: 310 basis points year-on-year
- Indonesia revenue decline: 4% year-on-year
- Nine stores added in Q1
- Planned store openings: 80 in FY27
- FY27 EBITDA estimate raised: 5%
- FY28 EBITDA estimate raised: 8%
- India valuation multiple: 25x EV/EBITDA
- Indonesia operations enterprise value: Rs 500 crore
Why this matters
The 80-store FY27 pipeline positions Restaurant Brands Asia to deepen its QSR footprint through disciplined site selection and an expansion model supported by improving unit economics.
What to watch
- Quarterly net store additions versus the implied FY27 run rate for 80 openings.
- Same-store sales growth, especially whether menu-led footfall offsets discounting and delivery mix pressure.
- Gross-margin durability above the reported 70.8% level and movement in restaurant-level EBITDA margins.
- New-store maturation curves, store-level profitability and evidence of cannibalization in clustered markets.
- Delivery mix, aggregator commission trends and direct-order penetration.
- Rent, employee and food-inflation trends relative to menu-price increases.
- Management commentary on capex, debt, franchise versus company-operated mix and opening-format mix.
- Prioritize KFC-led openings in underpenetrated Tier 2 and Tier 3 cities, where delivery coverage can supplement dine-in demand.
- Use clustered store expansion to lower logistics costs, improve inventory turns and increase local marketing efficiency.
- Accelerate delivery-only, express and smaller-footprint formats where full-service unit economics are less attractive.
- Increase menu innovation and value bundles to protect traffic, but tighten discounting if gross-margin expansion begins to reverse.
- Stage openings against store-level return thresholds rather than pursuing the full target uniformly across markets.