Anand Rathi has assigned a 'Buy' rating to Restaurant Brands Asia, setting a price target of Rs 115 citing strong operational growth in India. While domestic store sales are rising, the company’s consolidated performance faces pressure from losses in its Indonesian operations, a key factor investors should monitor.
Anand Rathi has initiated coverage on Restaurant Brands Asia with a 'Buy' rating, setting a target price of Rs 115. As of early November 2026, the company's shares are trading in the range of Rs 90 to Rs 91. This recommendation comes as the company navigates a mixed financial environment, balancing strong domestic growth against challenges in its international business segments.
The brokerage's optimism is primarily driven by the company's performance in India. During the second quarter of the 2027 fiscal year, the domestic Burger King operations reported a 14% growth in same-store sales, which measures how well existing outlets are performing compared to the previous year. This improvement in sales, combined with menu innovation and better digital reach, helped the company expand its operating profit margins by 200 basis points compared to the same period last year.
Operational Divergence in Indonesia
While the India business is showing momentum, the company’s performance in Indonesia remains a complicated factor for investors. The Burger King brand in Indonesia has reached a point where it is generating positive operating cash flow at the store level, thanks to cost-control measures. However, the Popeyes brand in the same region is currently a loss-making segment. Management is actively reviewing strategic options to address these losses, which have acted as a drag on the company’s overall profitability.
Expansion and Strategic Risks
The company’s management has maintained its growth strategy, targeting an addition of 70 to 80 new outlets annually. The goal is to reach approximately 670 stores in India by the end of the 2027 fiscal year. While this expansion aims to capture market share in a competitive quick-service restaurant sector, it also comes with risks. The sector is highly sensitive to input costs and intense competition, which can impact margins if not managed effectively.
Beyond operational execution, there are specific financial factors that shareholders often monitor. The company currently faces a low interest coverage ratio, which indicates that earnings are not substantially higher than interest obligations. Additionally, around 40% of the promoter shareholding is pledged, a factor that investors typically track closely as it can influence stock price stability and governance perceptions.
Moving forward, the primary items for investors to track include the progress of the turnaround in the Indonesian Popeyes business, the actual execution speed of the new store openings in India, and the company's ability to maintain margin improvements amid rising competitive pressure.