Restaurant Brands Asia Jumps 13%, Hits 52-Week High After Rs 1,494 cr Block Deal; Details

Restaurant Brands Asia (formerly Burger King India) shares rose 13 per cent on the NSE to hit a 52-week high of Rs 135.40 in Friday’s intra-day trade after over 25 per cent of its total equity changed hands on the exchange. The stock surpassed its previous high of Rs 134 touched on October 4, 2022.

CNBC-TV18 reported citing sources that the company’s promoter entity, Everstone was likely the seller in this transaction.

As of the June quarter, Everstone held a 25 per cent stake in the company.

The company’s net loss had widened in the June quarter to Rs 50.5 crore as against Rs 47.5 crore in the year ago period, dragged by the rising raw material costs for Burger King’s India business and high spending on more stores.

Revenue, however, rose 25 per cent on year to Rs 611 crore from Rs 489.2 crore in the same quarter of the previous fiscal. The management has also retained its guidance of 10 per cent same-store sales growth (SSSG) for FY24 and 8 percent for FY25.

Restaurant Brands Asia is one of the fastest-growing international Quick Service Restaurant (QSR) chains in India during the first five years of its operations based on the number of restaurants.

As the national master franchisee of the BURGER KING brand in India, it has exclusive rights to develop, establish, operate and franchise BURGER KING branded restaurants in India.

Brokerage firm ShareKhan sees a favourable risk reward for the stock, largely backed by expectations of breakeven for its Indonesia business in FY2024.

“Popeyes to lead the growth in medium term along with consistent improvement in the burger business in the Indonesian market,” the brokerage firm, which has a ‘buy’ call on the stock said.

Prabhudas Lilladher believes that Restaurant Brands Asia remains on a path to profitability in India with domestic business parameters improving in average dollar sales (ADS), gross margins, and profitability. The brokerage also feels that the business restructuring in Indonesia is showing initial gains with expected cash breakeven by FY24.

Prabhudas Lilladher has an ‘accumulate’ call on the stock, with a price target of Rs 142.