Restaurant Brands Asia Ltd Management Discussions

Economy Overview Global Economy

The global economy in 2025 is expected to experience a complex mix of challenges and opportunities influenced by evolving geopolitical dynamics, technological advancements and shifting consumer behaviours. Global GDP expanded by 3.3% in 2024 following the 3.5% year-over-year growth recorded in 2023. This growth rate remains below the pre-pandemic average, reflecting ongoing challenges such as geopolitical tensions, trade disruptions and demographic shifts. Advanced economies recorded a modest year-on-year growth of 1.8%, whereas Emerging Market and Developing Economies (EMDEs) demonstrated greater resilience, achieving a 4.3% growth rate in 2024. Chinas economic recovery gained some traction, though it was constrained by persistent weakness in the property sector and softer external demand. The US economy remained resilient, buoyed by strong labour markets and domestic demand, while the Eurozone faced structural challenges, particularly in energy-intensive industries. Meanwhile, India and Southeast Asia stood out as growth leaders, driven by vibrant domestic consumption, rapid digital transformation and substantial investments in infrastructure. Recent tariffs announcements have strained the global economy by interrupting supply chain continuity and driving up costs for raw materials and intermediate goods. This has not only eroded corporate margins but also weakened investor confidence, leading to reduced capital flows and economic uncertainty.

Outlook

In 2025, advanced economies are expected to experience divergent growth on the basis of domestic demand and differing policy responses. In contrast, emerging markets, including China and India, are expected to maintain stable growth despite ongoing uncertainties in global markets. The global economy is expected to grow at a rate of 2.8% in 2025 and 3.0% in 2026. Advanced economies are expected to grow modestly at 1.4% in 2025 and 1.5% in 2026, while emerging markets and developing economies are projected to grow at 3.7% in 2025 and 3.9% in 2026. The tariffs imposed by the United States on Canada, Mexico and China in March 2025, along with retaliatory actions, may disrupt global trade, drive inflation and slow economic growth. Higher import costs could result in increased consumer prices worldwide. However, economies are expected to remain resilient by leveraging technological advancements and implementing well-planned strategies.

Source: International Monetary Fund (World Economic Outlook - April 2025)

Indian Economy

India continues to be one of the fastest-growing major economies, driven by its demographic advantages, resilient domestic demand and ongoing economic reforms. The country continues to be a dynamic player in the global economy, driven by robust GST collections and sustained growth across manufacturing, infrastructure and technology sectors.

However, global uncertainties have led to a moderation in GDP growth, with the Indian economy expanding by 6.5% in FY 2025, down from the 9.2% growth recorded in FY 2024, according to the Ministry of Statistics and Programme Implementation (MOSPI). This slowdown can be attributed to factors such as subdued manufacturing, persistent food inflation, weak urban consumption, stagnant job creation, a growing trade deficit and lower private investment. Despite these challenges, India has maintained a steady growth trajectory, driven by the strong performance of the services sector, increased infrastructure spending and government initiatives focussed on digital transformation, financial inclusion and ease of doing business.

Inflation remained a concern throughout FY 2025, influenced by global supply chain disruptions and volatile commodity prices. In response, the RBIs MPC reduced the repo rate by 25 basis points twice, lowering it to 6% as of April 2025 while maintaining a neutral economic stance. Consumer Price Index (CPI) inflation is projected at 4.9% for FY 2025, improving from 5.4% the previous year and is expected to ease further to 4.0% in FY 2026. Despite global challenges, Indias proactive policy measures, expanding middle class and strengthening domestic fundamentals are expected to support its medium-term growth prospects.

Outlook

Indian economy is projected to grow by 6.5% year-over-year (YoY) in FY 2026, maintaining the growth rate estimated for FY 2025. For the Indian economy, the impact of recent tariffs has been mixed, with export competitiveness challenged in some sectors while certain domestic industries gain from reduced import competition. Although global uncertainties have impacted commercial investments, investor sentiment remains resilient. Ongoing policy reforms and digitalisation efforts are improving transparency and efficiency, making the economy more structured and ready for the future. Despite challenges from geopolitical tensions and global market volatility, Indias economic outlook remains optimistic, with growth expected to exceed the global average. Strategic government initiatives, including the Production-Linked Incentive (PLI) scheme and investments in infrastructure, renewable energy and digital transformation, are poised to support long-term economic expansion and strengthen Indias position in the global economy.

Source: Press Information Bureau (RBI Issues April 2025 Policy Update), Press Information Bureau (SUMMARY OF ECONOMIC SURVEY 2024-25), Press Information Bureau (FIRST ADVANCE ESTIMATES OF GROSS DOMESTIC PRODUCT, 2024-25)

Indonesian Economy

Indonesias economy continued its recovery in 2024, demonstrating stable growth despite global uncertainties and domestic policy adjustments. The economy expanded by 5.03%, closely aligning with the 5.05% growth recorded in 2023. While this reflects the countrys resilience, it also represented the slowest growth rate in three years, signalling the need for stronger policy measures to maintain momentum. Although a consistent growth rate of around 5% has provided macroeconomic stability, it still falls short of the governments target of achieving 8% annual growth by 2029.

This economic stability was supported by a combination of monetary easing and fiscal initiatives. Bank Indonesia reduced interest rates by 50 basis points since September 2024 to stimulate domestic demand, while the government introduced property tax relief and raised the minimum wage to support household spending. Additionally, election-driven expenditure and a notable 4.61% year-on-year surge in investment, the highest in six years, boosted domestic economic activity in 2024, helping to counterbalance the drag from weaker net exports. These coordinated efforts have kept the recovery on course, though further action may be required to accelerate progress toward long-term growth targets.

Outlook

Indonesias economic growth outlook for 2025 remains cautiously optimistic despite external uncertainties. Bank Indonesia has adjusted its growth forecast to a range of 4.7% to 5.5%, factoring in global risks such as trade tensions and potential US tariff increases. To mitigate these challenges, there could be further monetary easing, including additional interest rate cuts to stimulate domestic demand, particularly as durable goods sales continue to show weakness. Key initiatives include a large-scale free meals programme targeting 83 million children and pregnant women, alongside electricity tariff discounts and affordable housing projects. These measures are expected to enhance household spending, a crucial driver of the economy. However, the reduction in the 2025 infrastructure budget may temper overall growth momentum, especially in contrast to the infrastructure-led expansion of previous years. While these challenges pose risks, Indonesias economic trajectory in 2025 will largely depend on domestic policy efforts and the broader global economic environment.

Source: Reuters (Indonesia expects steady 5% growth in 2025 amid ongoing trade tensions), Reuters (Indonesias economy expands 5% in 2024, more rate cuts seen in bumpy 2025)

Industry Overview

Global Food Services Market

The global foodservice market is undergoing a transformative shift driven by evolving consumer preferences, technological advancements and lifestyle changes. Food service establishments include businesses that prepare and serve food for dine-in, takeaway or delivery. This includes food retailers, counter service and table service restaurants and a wide range of food service providers. The global foodservice market was valued at USD 3,486.58 billion in 2024 and is projected to grow from USD 4,027.61 billion in 2025 to USD 6,810.86 billion by 2032, registering a compound annual growth rate (CAGR) of 7.79% during the forecast period.

Asia Pacific dominated the global foodservice market in 2024, accounting for 45.71% of the total share. Globally, fast food consumption is on the rise, driven by higher household incomes, a growing population of working women and the convenience that fast food offers. Online food delivery platforms are expanding rapidly. Restaurants are increasingly investing in automation and AI technologies. Additionally, trends such as sustainable packaging, plant-based offerings and data-driven customer personalisation are contributing to the sectors growth.

The transition toward digital food delivery combined with the growing demand for convenient meals is prompting widespread investment in the food service industry globally. As urban life becomes more fast-paced, consumers are increasingly opting for meal subscription services and ready-to-eat-on-the-go options. This trend has notably benefited low-cost and low-investment restaurant models, which are capitalising on the surge in demand. Independent foodservice operators that offer dine-in or takeaway options often have to strike a balance between variety, quality and speed, sometimes compromising one to stay competitive with quick service formats. Meanwhile, digital tools, including personalised mobile apps and social media platforms used for reviews and recommendations, are playing a crucial role in influencing customer preferences and enhancing restaurant visibility across locations.

Source: Fortune Business Insights (Food Service Market Size Analysis Type 2025-2032), Fortune Business Insights (Food Service Industry Trends - Market Growth & Consumer Behavior 2025 to 2035)

Indian Food services market

The Indian food services market has grown significantly over the past decade, driven by changing consumer lifestyles and eating habits. Dining out, once uncommon in Indian culture, has become increasingly popular, contributing to sustained sectoral growth. In the 1990s, the market was dominated by unorganised players, with organised brands barely present. The shift began in 1996 with the entry of global QSR chains, marking the start of expansion in the sector. Since 2010, the industry has not only experienced significant growth but also undergone a transformation, with organised food services now surpassing unorganised ones in market share. This shift has been supported by advancements in technology, e-commerce, cold chain logistics and the rise of delivery-led formats in urban and Tier 1 markets. Changing consumer preferences and the growing presence of brands across the country are expected to drive continued growth in this sector.

The Indian food services market was valued at 5,005 billion in FY 2024 and is expected to grow at a CAGR of 11.5% over the next five years, reaching 8,644 billion by FY 2029. Within this, the organised segment which includes both chain and organised standalone outlets was estimated at 2,410 billion in FY 2024. This segment is projected to grow at a CAGR of approximately 15.7%, reaching 5,006 billion by FY 2029 and increasing its market share from 48.1% in FY 2024 to 57.9% in FY 2029. Key drivers of this growth include rising disposable incomes, increasing nuclear families and greater internet and smartphone penetration.

Indian Food Service Market Format	CAGR FY 2019-24	CAGR FY 2024-29	Market Share FY 2019	Market Share FY 2024	Market Share FY 2029P
Organised Market	9.1%	15.7%	38%	48%	58%
Organised Standalone Market	7.3%	14.3%	75%	69%	65%
Organised Chain Market	13.9%	18.7%	25%	31%	35%
Unorganised Market	0.5%	7.0%	62%	52%	42%

Indias foodservice sector is undergoing a strong shift towards formalisation, with the organised market expected to grow at a CAGR of 15.7% during FY 2024-29, increasing its market share from 48% in FY 2024 to 58% by FY 2029. This growth is largely driven by the rapid expansion of organised chains, which are projected to grow at 18.7% CAGR, while the unorganised segment continues to lose share, declining from 52% to 42% over the same period.

Source: Technopak Industry Report on "Food Service Market in India" dated February 2025

Opportunities and Challenges in the Indian Food Service Market

Opportunities

Women Workforce

Improved healthcare, media visibility and above all, access to education are empowering women across urban and rural India. This has led to greater influence within families and society, along with a rise in branded product consumption, particularly in fashion and lifestyle. Female labour force participation has significantly increased from 24.5% in FY 2019 to 41.7% in FY 2014 – driven by strong government policies focussed on long-term socio-economic and political empowerment under the ‘women-led development agenda.

Urbanisation

Urbanisation is a major driver of Indias economic growth, with urban areas contributing 63% to GDP. Despite only 36% of the population being urban – below the global average – India had 519 million urban residents in 2023, the second-highest globally. This is expected to rise to 613 million (41%) by 2030, underscoring the critical role of rapid urbanisation in fueling consumption and development.

Growing Middle Class

Indias growing middle class – households earning USD 10,000 to 50,000 annually – has expanded from 5.8% of the population in FY 2010 to 33.5% in FY 2023 and is projected to reach 42% by FY 2030. This shift is driving demand for better goods, services and experiences and fueling premiumisation across sectors like housing, retail, healthcare and financial services.

Challenges

Fragmented Market and Increasing Competition

The Indian food services market is fragmented, with unorganised players holding 52% of the share. Smaller restaurants face challenges like inconsistent hygiene and poor market segmentation, making customer retention difficult amidst growing competition and experimentation. However, organised chains are successfully expanding by maintaining high standards in quality and consistency.

Shortage of Skilled Staff and High Attrition

The Indian food services sector faces a skilled labour shortage, with only a small number of graduates entering the workforce annually, leading to reliance on unskilled labour and impacting service quality. High attrition rates further increase manpower costs. To address this, brands are investing in in-house training programmes to improve staff loyalty, service quality and reduce attrition.

High Real Estate Impacting Outlet Profitability

Rising real estate prices in India significantly impact food service profitability, with rent accounting for a large portion of expenses. High rental costs in prime cities make it difficult for smaller businesses and new entrants to sustain operations, reducing their ability to maintain profit margins.

Opportunities

Nuclearisation

Household growth in India is outpacing population growth, driven by the rise of nuclear families. Average household size has dropped from 5.3 in FY 2001 to 4.2 in FY 2023 and is expected to reach 3.9 by FY 2030. This trend is fuelling demand for housing and discretionary spending. The slowdown in household growth from 2011 to 2023 may be due to factors like the COVID-19 pandemic, economic downturn and rising real estate prices.

Moving Beyond Malls & High Street

Indias rising airline and railway traffic is fuelling demand for F&B services at transit hubs. To serve time-constrained travellers, operators are introducing new formats, diverse menus and tech-driven service innovations.

Challenges

Low per Capita Spend on Food Services

Indias per capita expenditure on eating out is low due to a preference for home-cooked meals and limited dining options, lagging behind countries like the USA, China and Brazil. However, rising incomes, exposure to global cuisines and the growth of online ordering are expected to increase food service spending in the future.

Indonesian Food Service Market

The Indonesian food service market was valued at USD 30.2 billion in CY 2023 and is projected to expand at a compound annual growth rate (CAGR) of approximately 10%, reaching USD 48.5 billion by CY 2028. The development of the sector continues to be anchored by the key regions of Sumatra, Java and Bali, driven by high population density, rapid urbanisation and a strong tourism ecosystem. Within the overall market, contribution from chain restaurants accounted for 13.2% (USD 4.0 billion) in CY 2023, up from 8.1% in CY 2015. This segment is expected to grow at a CAGR of 8.1%, reaching USD 5.9 billion by CY 2028. Fine Dining and Casual Dining formats remain the dominant force in the market, collectively contributing approximately USD 24 billion (79.4%), followed by Quick Service Restaurants (QSRs) at USD 4.0 billion (13.2%) and Caf?s & Bars at USD 2.0 billion (6.6%). Sustained industry growth is underpinned by positive macroeconomic fundamentals, shifting consumer behaviours and the continued expansion of food service outlets driven by both domestic operators and international brands scaling their presence in the country.

Indonesias independent food service market leads with the majority share, driven by local eateries and a preference for traditional, diverse dining. Meanwhile, the chain restaurant segment is growing, supported by the expansion of both domestic and international brands, as well as shifting consumer lifestyles and a growing demand for convenience, consistency and standardised quality.

Source: Technopak Industry Report on "Food Service Market in Indonesia" dated February 2025

Opportunities and Challenges in the Indonesian Food Service Market

Opportunities

Urbanisation and Lifestyle Changes

Rapid urbanisation and evolving consumer lifestyles are increasing the demand for convenient dining options, including quick-service restaurants (QSRs) and delivery services.

Challenges

Low Penetration of Food Services Market

Indonesias food service market faces the challenge of low outlet density, with only 1,332 outlets per million of urban population, far below countries like China, India, the UK and the USA. In CY 2023, Quick Service Restaurants (QSRs) had a density of just 76 outlets per million and their contribution to the total market is only 13%, much lower than in China (25%), Brazil (37%) and developed economies like the USA (52%) and the UK (33%).

Opportunities

Franchising and Chain Expansion

Indonesias foodservice market is expanding rapidly, led by QSRs and caf?s, with Java contributing over 60% of revenue. Less saturated regions offer strong opportunities for geographic growth.

Government Initiatives

Programmes like the free meals initiative started in January 2025 are expected to create new opportunities within the foodservice sector, including job creation and increased demand for local produce.

Quick-Service Restaurants (QSRs)

Global QSR Market

The global QSR market is growing and is driven by urbanisation, convenience and digital innovations. Brands are expanding into emerging regions, adapting to local tastes and meeting the demand for healthier, sustainable options. In 2024, the global fast food and QSR market was valued at USD 265.86 billion. According to IMARC Group, the market is projected to grow at a CAGR of 4.10% between 2025 and 2033, reaching USD 381.79 billion by the end of the forecast period. North America led the market in 2024, accounting for over 39.9% of the global share. This dominance is supported by a large urban population, frequent dining-out habits, diverse menu offerings, expectations for swift service, promotional pricing strategies and continuous investment in innovative food concepts, loyalty programmes and enhanced in-store experiences. Urbanisation is a key driver behind the growing demand for fast food and QSRs. As more people move to cities, longer working hours and fast-paced lifestyles reduce cooking time, leading to increased consumption of convenience food. QSRs provide quick, affordable meals that fit into tight schedules.

Challenges

Halal Certification Compliance

Indonesias halal labelling law, effective from October 2024, requires all food items to carry halal certification. Some importers and restaurants face challenges due to complex supply chains and unclear guidelines, potentially leading to trade disruptions and higher costs.

Supply Chain Issues

The inconsistent supply of quality ingredients, coupled with inefficiencies in logistics, poses significant risks to the smooth operation and reliability of food service businesses.

Low per Capita Spend on Food Services

Indonesia has one of the lowest per capita spending on dining out, mainly due to limited dining options in smaller cities and towns. As a result, its food service expenditure is lower compared to countries like the USA, China and Brazil. However, factors such as poverty reduction, increased purchasing power and exposure to global cuisines are expected to drive higher dining-out frequency in the coming years, leading to greater consumer exploration of dining options.

In the United States, customisation and convenience are emerging as key drivers of growth in the fast food and QSR markets, which currently hold a market share of 86.50% in 2024. In 2024, chain and franchise-owned units emerged as the industry leaders, commanding a 57.0% share of the market. Their standardised business models ensured consistency in service, pricing and product quality, appealing to a wide customer base. The franchising approach enabled rapid geographic expansion and local responsiveness while maintaining central control over the brand and operations. American cuisine dominated the fast-food and QSR sectors in 2024, capturing 26.3% of the market. This segment, known for its familiar offerings like burgers, fried chicken, fries and sandwiches, remained popular due to its value, familiarity and widespread availability. The burgers and sandwiches category led the global fast food and QSR market with a 51.2% market share in 2024 by offering portable meals that cater to both individual and family needs.

Source: IMARC Group (Fast Food and Quick Service Restaurant Market)

Indian QSR Market

Indias organised Quick Service Restaurant (QSR) sector is growing rapidly, with over 100 brands operating 8,500+ outlets nationwide. The organised QSR sub-segment in India is projected to reach 649 billion in FY 2024 with an impressive growth rate of 17.9% CAGR expected to expand to 1,476 billion by FY 2029. This growth will largely be driven by the chain QSR market which accounts for approximately 58% of the total QSR sub-segment in FY 2024 and its share is anticipated to increase to around 60% by FY 2029.

Indian QSR Market

( billion)

The Indian QSR market is becoming increasingly competitive with a rising number of both domestic and international brands actively expanding their presence. International chains are expanding through robust supply chains, standardised processes, global best practices and ongoing product innovation. These brands are strategically placing outlets in high-traffic areas such as malls, high streets, office complexes, airports and highways, while adopting varied store formats to enhance consumer reach. The market has seen a continuous influx of new players capitalising on shifting consumer preferences for convenience, affordability and consistency in dining experiences. Quick-service restaurants are increasingly adopting AI and machine learning to optimise crowd management in both their dining areas and kitchens. As consumer demand for quick and high-quality food continues to grow, both established and emerging brands are positioning themselves for success in this dynamic and rapidly evolving sector.

Source: Technopak Industry Report on "Food Service Market in India" dated February 2025

Indonesian QSR Market

The Indonesian Quick Service Restaurant (QSR) sector remains highly competitive, with both international and domestic brands playing key roles in driving growth. There are around 1,10,000 QSR outlets across the country, 18% of which are chain outlets. The QSR market in Indonesia was valued at USD 4.1 billion in CY 2023, reflecting a strong growth trajectory with a Compound Annual Growth Rate (CAGR) of 13.6% since CY 2020. Over the next five years, the market is projected to continue expanding at a CAGR of 8.3%, reaching an estimated USD 6.1 billion by CY 2028.

Source: Technopak Analysis

In 2023, the chain segment contributed 63% of the total market share, a slight increase from approximately 61% in CY 2020 and is expected to grow to 64% by CY 2025. The chain market has witnessed a robust growth rate of 15.2% CAGR between CY 2020-2023 and is anticipated to continue growing at 8.4% CAGR from CY 2023-2028, reaching USD 3.9 billion by CY 2028. Increasing disposable incomes, urbanisation and a rising preference for branded dining in smaller cities are fueling QSR growth. Enhanced infrastructure, the spread of shopping malls and transit hubs and the widespread use of food delivery platforms have further boosted QSR brands expansion. The rapid expansion of international chains has also spurred the emergence of local players, who are capitalising on the growing consumer demand for fast, affordable and consistent dining options.

Source: Technopak Industry Report on "Food Service Market in Indonesia" dated February 2025

Company Overview

Restaurant Brands Asia Limited (RBAL) is 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 across India. The master franchise agreement enables the Company to leverage Burger Kings globally renowned brand name to strengthen its brand recall in India. RBAL also leverages the technical, marketing and operational expertise associated with the global brand.

In Indonesia, RBAL operates as the master franchisee for the brands, Burger King^? and Popeyes^? through its subsidiaries, PT Sari Burger Indonesia (‘BK Indonesia) and PT Sari Chicken Indonesia (‘Popeyes Indonesia), respectively.

Founded in 1954, the Burger King^? brand is a global quick service burger chain known for food quality and value and as the only place guests can get the iconic flame-grilled Whopper^? burger. The Burger King^? system operates more than 19,700 locations in more than 120 markets.

Business performance

India Business

The Company recorded strong growth in its India operations during FY 2025. RBAL recorded a notable revenue increase of 11.80% in FY 2025, with revenue from operations rising to

19,677.59 million, up from 17,600.72 million in the previous year. The Companys growth was driven by a positive same-store sales growth (SSSG) of 1.1% for the year and opening of 60 new restaurants during FY 2025. RBAL also reported its highest-ever EBITDA (Pre Ind-AS 116) of 993.85 million, reflecting a 32% year-on-year increase. The Company continued its expansion strategy by opening a net of 58 new restaurants, bringing the total number of operational restaurants to 513 as of March 31, 2025, with 464 of its restaurants featuring BK Caf?s^?. BK Caf?s^? are designed to offer a unique and inviting space where customers can enjoy high-quality coffee and an expanded menu in a comfortable setting, aligned with the brands commitment to providing an exceptional dining experience.

RBAL has successfully surpassed the milestone of 500 restaurants in India, marking a decade of impressive and sustained growth. The Companys digital-first strategy has significantly contributed to sales, with a large portion of its revenue now generated through digital channels. The Company has outlined plans to achieve comprehensive digital integration across its entire network in the near future. In addition, RBAL expanded its snack offerings, introducing new products designed to create incremental occasions to serve its customers. To further engage customers, the Company launched targeted marketing campaigns. Furthermore, RBAL has accelerated the growth of its BK Caf? network along with using various promotional activities to increase guest frequency and build brand awareness.

Indonesia Business

The Company in Indonesia was impacted due to geopolitical headwinds, with BK Indonesia reporting a 2.2% year-on-year decline in Average Daily Sales (ADS) for FY 2025 as ADS decreased to Indonesian Rupiah (IDR) 18.1 million from IDR 18.5 million in the previous year. POPEYES^? brand in Indonesia achieved an ADS of IDR 15.2 million for FY 2025. The Company recorded a total revenue for Popeyes Indonesia of IDR 139 billion in FY 2025 compared to IDR 144 billion in the previous year.

RBAL is enhancing its profitability through a well-defined strategy which includes expanding its menu offerings, closing underperforming outlets and improving cost efficiencies. The Company is also capitalising on strategic synergies between its India and Indonesia operations to turnaround its performance in the Indonesian market. A nascent recovery in dine-in trends, along with targeted menu innovations and the continued cost optimisation is contributing to a better market position. RBALs key strengths lie in its exclusive brand rights across India and Indonesia, the ability to customise menus to suit local preferences, a favourable royalty structure capped at five percent and access to the technical, marketing and operational expertise of globally recognised brands.

Key developments

India Business

RBAL Crosses 500-Restaurant Milestone in India, Marking a Decade of Rapid Growth

The Company reached a key milestone by surpassing 500 restaurants in India as of December 2024. The Company launched operations in November 2014 with its first 10 outlets, following its conceptualisation in 2013. The Company has since added over 500 restaurants within a decade, marking rapid and sustained growth. RBAL has emerged as one of the fastest-growing restaurant brands in the country. The Company credits this achievement to the unwavering commitment of its team and the continued support of investors and loyal customers who have been instrumental in its growth journey.

Accelerating Growth through a Digital-First Strategy

The Companys digital business strategy is anchored in innovation, customer convenience and a clear focus on profitability. The Company has accelerated its digital transformation, with 466 out of 513 restaurants equipped with self-ordering kiosks. In stores with kiosks, over 90% of sales is being generated through digital channels including QR-based table ordering and its increasingly popular mobile app in FY 2025. The Company has witnessed a 28% year-over-year increase in app downloads, significantly enhancing both delivery and dine-in experiences. The Company is aiming for near-total digital integration across its network through its "Kings Journey" initiative. The Companys strategy also delivered financial gains, with delivery margins improving by over 1% and contributing to stronger unit-level profitability.

Enhancing Snacking Offerings and Boosting Customer Engagement

During FY 2025, the Company expanded its snacking portfolio with innovative launches such as BK Pizza Puff and a range of chicken-based handheld products. These offerings were strategically developed to cater to evolving consumption patterns and stimulate incremental customer engagement. The Company also executed aggressive television and digital marketing campaigns to reinforce its value proposition and boost dine-in footfall.

Fast-Tracking BK Caf? Expansion

RBAL rapidly expanded its BK Caf? network, adding 113 new caf?s during the year to reach 464 operational caf?s. The Companys BK Caf? offerings provide additional dining opportunities, especially for breakfast and during evenings, driving higher guest frequency at its restaurants. RBAL undertook various promotional activities to build brand awareness.

Indonesia Business

Strengthening Portfolio Profitability through Strategic Optimisation

RBAL is enhancing business performance through a focussed strategy of portfolio optimisation and cost efficiency. The Company has expanded its range of chicken products, further enriching its menu offering. As part of its profitability improvement efforts, RBAL has closed underperforming outlets, aiming to boost operational efficiency. The Company is also working with landlords to renegotiate rental terms, which is benefiting unit-level economics. These steps are intended to help restaurants achieve profitability. Additionally, BK Indonesia has closed underperforming stores, bringing the total to 143 Burger King and 25 Popeyes outlets at the end of FY 2025, aligning with its strategy to streamline operations and prioritise profits.

Recovery and Growth in Consumer Trends

RBAL has experienced geopolitical headwinds in Indonesia. However, Average Daily Sales (ADS) growth from November to March suggests early signs of improvement for the business. Same-Store Sales Growth (SSSG) for dine-in has turned positive in Q4 FY25, indicating the potential for continued growth. RBAL is encouraged by the positive shift in market trends. In the past, sustained marketing efforts have been a key driver of growth. Although external events have caused temporary setbacks, RBAL remains optimistic, with the brand continuing to witness positive momentum in consumer engagement and sales.

Enhancing Menu Appeal and Market Position

The Company implemented targeted initiatives to revitalise the Burger King business in Indonesia:

Build relevance and credibility for the chicken menu by launching a new Spicy Chicken offering

Establish leadership in burgers through Whopper Jr. trials with an entry-value promotion

Whopper Taste Supremacy: Enhance overall flavours and taste

Drive dessert innovation to gain market share with co-branded desserts and local flavour limited-time offers (LTOs)

Strengthen the value proposition across channels and menu layers by introducing a permanent value layer

Experienced executive teams

India	Indonesia
The Company is led by a seasoned management team comprising senior professionals with deep experience in the food and beverage industry, retail and prominent fast- moving consumer goods brands. RBALs core leadership has remained consistent, with most team members being part of the organisation since its inception in India.	The BK Indonesia and Popeyes Indonesia management team in Indonesia is composed of individuals with significant expertise in the QSR industry and related sectors. This talented team, along with a strong organisational culture, plays a crucial role in steering the company towards profitability.

Business supply chain management

India	Indonesia
The Company has developed a strong distribution network and a reliable fresh product supply chain to effectively support its cluster-based growth strategy.	BK and Popeyes Indonesia have developed a strong distribution network and a reliable fresh product supply chain to effectively support their cluster-based growth strategy.

Groups market entry and growth approach

The Company leverages an efficient restaurant roll-out and development process built on standardised procedures that align with the brands global standards. RBAL adopts a people-centric approach to elevate guest experiences and supports operations through a vertically integrated and scalable supply chain.

Key Business Challenges in India and Indonesia

Fluctuating Fuel and Commodity Prices: RBAL faces volatile prices for fuel, freight, energy and ingredients such as palm oil, chicken and cheese along with packaging materials. Increase in these may have a substantial effect on restaurant margins and operational performance.

Stringent Food Safety Regulations: There has been growing awareness leading to a stronger preference for food prepared under stringent hygienic conditions. The focus on food safety and quality has significantly increased. In India, food service providers, including QSR chains, are required to comply with strict regulations regarding hygiene, sanitation, food production, handling, pest control and other relevant areas to ensure consumer health and safety. Similarly, QSR operators in Indonesia must meet rigorous hygiene and food safety standards.

Shortage of skilled personnel and high employee turnover:

RBAL is in the food service industry, which is labour-intensive, faces challenges from shortage in skilled labour, high rates of employee turnover and rising costs associated with retaining staff. The company may experience instability due to these factors, which can lead to a potential decline in the quality of food and services offered to consumers.

Elevated rentals for commercial real estate: The food service industry is grappling with significant challenges related to high rental costs. The industry faces escalating real estate prices, particularly in malls and prime urban locations, which could affect profitability and hinder expansion.

Intense market competition: The food services markets in India and Indonesia are highly competitive, largely due to a very large unorganised sector. There is also increasing competition from delivery focussed cloud kitchen. Small and mid-sized restaurants struggle with low customer loyalty primarily because of inadequate adherence to hygiene and food safety standards. QSR operators enjoy a competitive edge due to their rigorous food safety and hygiene protocols, efficient operating procedures, consistent taste profiles, and implementation of global best practices. These factors contribute to their ability to attract and retain loyal customers, ensuring higher rates of customer retention.

Financial Review

(Rs in Million)

Particulars	Standalone		Consolidated
	FY 2025	FY 2024	FY 2025	FY 2024
Revenue from Operations	19,677.59	17,600.72	25,507.20	24,370.58
Other income	238.93	184.95	311.65	184.97
Total Income	19,916.52	17,785.67	25,818.85	24,555.55
Less:
Cost of materials consumed	6,355.13	5,802.32	8,911.72	8,719.71
Employee benefit expenses	2,988.99	2,650.46	4,311.48	4,096.56
Finance cost	1,411.42	1,141.47	1,608.89	1,412.45
Depreciation and amortisation costs	2,546.28	2,110.28	3,714.81	3,561.32
Other expenses	7,490.48	6,770.57	9,599.89	9,132.89
Loss before tax expense	(875.78)	(689.43)	(2,327.94)	(2,367.38)
Less tax expense (current and deferred)	-	-	-	-
Loss for the year (1)	(875.78)	(689.43)	(2,327.94)	(2,367.38)
Total other comprehensive income/ (loss) for the year, net of tax (2)	(19.81)	(8.14)	(22.44)	(53.81)
Total comprehensive loss for the year, net of tax (1+2)	(895.59)	(697.57)	(2,350.38)	(2,421.19)
Controlling Interest of RBA (Equity holders of Parent)	N.A	N.A	(2,184.16)	(2,236.30)
Non-Controlling Interest (Minority Interest)	N.A	N.A	(166.22)	(184.89)

Key Financial Ratios

Particulars	FY 2025	FY 2024
Debtors Turnover (in days)	3.95	2.95
Inventory Turnover (in days)	4.14	4.19
Current Ratio	1.53	0.50
Gross Debt Equity Ratio (excluding lease liability)	0.06	NIL
Operating profit margin	14.45%	13.51%
Net profit margin	(4.45%)	(3.92%)
Return on Net worth	(3.67%)	(3.73%)

Risks and mitigation

Risks	Impact	Mitigation
Operational Risks	Operational lapses or inefficiencies may compromise quality, hygiene standards and service levels, potentially leading to customer dissatisfaction and financial consequences for the Company.	The Company follows strict quality control protocols aligned with global best practices and regulatory standards. It conducts comprehensive training programmes and regular audits to uphold its commitment to food safety and operational excellence.
Supply Chain Risks	Disruptions in the Companys supply chain may negatively impact operations and profitability, resulting in product shortages, higher costs and potential loss of revenue.	The Company has adopted a diversified sourcing strategy by engaging multiple suppliers for key ingredients and materials. It has also optimised its distribution network and inventory management systems to ensure a steady and efficient supply.
Inflationary Pressures	Increasing input costs driven by inflationary trends can affect the Companys margins and overall profitability.	The Company actively monitors market conditions and leverages its scale to secure favourable terms with suppliers. It uses strategic pricing and menu engineering to preserve its value proposition while protecting profitability.
Consumer Retention	The inability to retain and attract customers in the competitive QSR landscape may lead to a loss of market share and negatively affect the Companys growth and financial performance.	The Company consistently innovates its menu, reinforces its value proposition and elevates guest experiences through technology-driven initiatives and exceptional service quality. Its strong brand equity and customer loyalty programmes further strengthen its competitive edge.
Regulatory Compliance	Non-compliance with applicable laws and regulations concerning food safety, labour and environmental standards may lead to penalties, legal issues and reputational harm for the Company.	The Company has established strong governance frameworks and dedicated teams to ensure full compliance with all applicable laws and regulations, including those related to food safety, labour laws and environmental standards.
Information Technology Risks	Potential cybersecurity threats and data breaches may compromise the Companys systems, resulting in operational disruptions, financial losses and a decline in customer trust.	The Company has established comprehensive cybersecurity measures, including advanced firewalls, encryption protocols and regular security audits to protect its systems and safeguard sensitive data. Each restaurant features a digital menu board and follows a clearly defined data security policy. The Company also maintains Service Organisation Control (SOC) reports for both front-end and back-end Point of Sale (POS) systems and holds key security certifications for critical applications. RBALs Information Technology (IT) team actively monitors and manages IT infrastructure to detect and mitigate potential threats. As an added precaution, the Company does not store customer financial details such as Card Verification Value (CVV) numbers or card expiry dates.
Talent Management	The inability to attract, retain and develop skilled talent could impede the Companys growth plans, operational efficiency and overall competitiveness.	The Company has established an efficient resource hiring process and emphasises employee engagement, training and development initiatives. It cultivates a culture of inclusivity, diversity and growth opportunities to attract and retain top talent.

 

Risks	Impact	Mitigation
Environmental, Social and Governance (ESG) Risks	Failing to consider addressing Environmental, Social and Governance (ESG) concerns can harm the Companys reputation, erode stakeholder trust and jeopardise long-term sustainability, potentially impacting its brand value and financial performance.	The Company has been prioritising responsible sourcing, minimising its environmental impact and aligning its ESG reporting with relevant standards.
Social Media Risk	Negative comments, viral misinformation, or employee misbehaviour on social media can damage public perception which quickly erodes brand trust and impact the companys reputation.	The Company has rolled out a social media policy and provides regular training for employees on this. It uses monitoring tools to track mentions and sentiment. There is a plan for crisis management and response protocols are in place.
Business Continuity and Geopolitical Risks	Unforeseen events such as natural disasters, pandemics or geopolitical tensions can disrupt the Companys operations and affect its financial performance.	The Company has created comprehensive business continuity plans, including contingency measures, crisis management protocols and disaster recovery strategies, to ensure resilience and minimise disruptions.

Human Resources

RBAL focussed on reinforcing a culture of openness, trust and empathy during FY 2025 through impactful human resources initiatives. The Company nurtured its organisational culture by encouraging employee growth and prioritising overall well-being. RBAL maintained a workforce of approximately 10,000 employees across more than 115 cities in India. The Company placed significant emphasis on building a culture of continuous learning and capability development to address organisation-wide requirements.

A Culture of Ongoing Learning

RBAL believes in nurturing and developing internal talent to take on higher responsibilities. The Company takes great pride in its Restaurant Advancement Program (RAP), which, over the past nine years, has developed and empowered both Area Leads and Market Leads. RBAL remains focussed on empowering its frontline and operation leaders to enhance their capabilities and skillsets. The Company supports their growth to ensure they deliver exceptional guest experiences and improve leadership roles within the organisation.

RBAL made significant strides in FY 2025 by driving behavioural interventions across various levels.

Internal system control and its adequacy

RBAL boasts an efficient and clearly outlined internal control framework designed to protect its financial data and assets from unauthorised use or disposal. The Companys system manages evolving business risks, ensures reliable financial information and enables timely, accurate reporting of transactions while strictly adhering to regulatory laws. RBAL meticulously documents its overall governance system, including policies and procedures, under expert supervision.

RBAL assigns the internal control team the responsibility of continuously monitoring these controls, supplemented by an external team, to ensure the systems adequacy and effectiveness. The Companys Audit Committee conducts regular reviews of audit reports provided by the internal audit team. RBAL ensures that key observations and audit findings are thoroughly discussed and communicated to the management, which then implements corrective measures to enhance business processes and internal control mechanisms.

Outlook

The Company is advancing its strategic priorities with a balanced focus on growing its dine-in business and enhancing the profitability of its delivery operations. RBAL has observed steady improvement in restaurant footfall, reflecting the success of its emphasis on in-store experience and customer engagement. The Company has also implemented a targeted delivery strategy aimed at improving margins rather than just expanding order volume. These strategies will enhance greater financial benefits in the near term and support a more efficient and robust business model.

RBAL continues to strengthen its digital capabilities, positioning the BK app as a key pillar for customer engagement and future CRM initiatives. The app has seen strong traction through in-store promotion and exclusive offers, which have increased visibility and usage. Moving forward, the Company plans to enhance user engagement and boost order frequency through personalised digital experiences. Additionally, RBAL is leveraging its social media presence to build stronger connections with Gen Z and the youth.

The Company remains committed to strategic execution in Indonesia, focussing on menu innovation, consistent brand delivery, cost optimisation and increasing sales to turnaround the business. The immediate priority for the Indonesia business is to achieve breakeven on a cash basis. These targets represent the Companys core strategic focus, with the entire team working together towards their successful achievement.

Cautionary Statement

The Management Discussion and Analysis may contain statements regarding the Companys goals, forecasts, assessments and expectations, which could be considered ‘forward-looking statements under applicable laws and regulations. Actual outcomes may differ materially from those expressed or implied in these statements due to various factors. Therefore, investors are encouraged to conduct their own evaluations and consider all relevant factors before making any investment decisions.