Shares of restaurant companies on the BSE climbed as much as 10% following better-than-expected June-quarter results, with Travel Food Services and Restaurant Brands Asia leading the gains amid sector recovery signs.
Shares of restaurant companies climbed as much as 10% on the BSE on Friday after a run of June-quarter results that pointed to better profitability and firmer sales across parts of the quick-service restaurant sector. Travel Food Services led the advance, rising 10% to ₹1,465.10 and touching a 52-week high, while Restaurant Brands Asia gained 5% to ₹94.60 and also hit a fresh peak. Devyani International, Sapphire Foods India and Jubilant FoodWorks rose between 2% and 7% even as the BSE Sensex slipped 0.53% to 78,535.55 at 1:59pm.
The strongest momentum in recent weeks has been seen in Restaurant Brands Asia, the Burger King India operator, whose shares have jumped 42% in the first five trading sessions of August from ₹66.58 at the end of July. The company narrowed its consolidated net loss to ₹28.3 crore in the quarter to June from ₹48 crore a year earlier, helped by tighter cost control and pricing changes. Revenue rose 18% to ₹822.6 crore, led by the India business, while Indonesia remained a drag on overall performance.
Restaurant Brands Asia also reported same-store sales growth of 13%, supported by stronger dine-in and delivery demand and value-led offers. It added nine stores in the quarter and reaffirmed plans to open 80 outlets in FY27. Motilal Oswal Financial Services said the turnaround in Indonesia and the sustainability of the domestic recovery will be key factors to watch, and kept a buy recommendation on the stock with a target price of ₹125.
More broadly, Motilal Oswal said the listed QSR universe has been a weak spot for investors over the past four years, with aggregate market value falling 20% between FY22 and FY26 and declining another 25% in the past 12 months. The broker estimated that the sector is worth about ₹67,000 crore, with India revenue of roughly ₹20,000 crore and a store base of more than 6,600 outlets. It expects expansion to slow to 10% to 11% in FY27 and FY28 from 15% in FY22 to FY26, which it believes may ease pressure on unit economics and shift investor focus towards same-store sales growth, productivity and earnings delivery. On that basis, it upgraded Jubilant FoodWorks to buy and maintained buy calls on Devyani, Sapphire Foods and Restaurant Brands Asia, while staying neutral on Westlife and United Foodbrands.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
