Tue. Sep 26th, 2023
    Restaurant Brands Asia Shares Soar After Block Deal Worth Rs 1,494 Crore

    Restaurant Brands Asia, a company operating in the Quick Service Restaurant (QSR) space, experienced a significant increase in its shares by 12.5% to reach a 52-week high of Rs 135.40 in early trade on September 15th. This surge came after a block deal worth Rs 1,494 crore took place, with about 12.54 crore shares or 25.4% equity being traded. The exact parties involved in the transaction have yet to be confirmed, but sources suggest that Everstone, the company’s promoter entity, may have been the seller.

    As of the June quarter, Everstone held a 25% stake in Restaurant Brands Asia, and the company’s net loss had widened to Rs 50.5 crore due to rising raw material costs for Burger King’s India business and increased spending on new stores. However, revenue saw a 25% growth from the previous fiscal year, reaching Rs 611 crore.

    Despite the loss, the company has retained its guidance for same-store sales growth (SSSG) of 10% for FY24 and 8% for FY25. Moreover, Restaurant Brands Asia aims to achieve 67% gross margins in FY24 for its India business.

    Brokerage firm ShareKhan believes that there is a favorable risk-reward ratio for the stock, mainly driven by the expectation of a breakeven for its Indonesia business in FY2024. Similarly, Prabhudas Lilladher is confident that the company is on a path to profitability in India, with improvements in average dollar sales, gross margins, and overall profitability. They also suggest that the business restructuring in Indonesia is showing initial gains, with an expected cash breakeven by FY24.

    In conclusion, Restaurant Brands Asia’s recent block deal and positive growth outlook have contributed to a surge in its share price. The company’s focus on expanding its India business and improving profitability in key markets has garnered support from brokerage firms, further reinforcing investor confidence.

    – Quick Service Restaurant (QSR): A type of restaurant characterized by fast food service, limited menu options, and quick turnover of customers.
    – Block Deal: A large transaction where a substantial number of shares are bought or sold by a single party.
    – Same Store Sales Growth (SSSG): A measure of revenue growth from existing stores that have been open for a certain period of time.

    – Moneycontrol
    – CNBC-TV18
    – ShareKhan
    – Prabhudas Lilladher