Thank you. Welcome, everyone, to United Food Brands Limited Q4 and full year FY '26 earnings conference call.

For today's call, I have with me Mr. Kayum Dhanani, Managing Director; Mr.

Rahul Agrawal, CEO and Whole-Time Director; and Mr. Amit Betala, CFO.

Before we begin the call, I would like to remind that some of the statements made in today's conference call may be forward-looking in nature and may involve risks and uncertainties. Kindly refer to our earnings presentation for a detailed disclaimer.

We'll start the call with Mr. Dhanani sharing his perspective on overall demand and key highlights for the quarter.

This will be followed by a detailed discussion on business by Mr. Rahul Agrawal.

Post that, we'll open the forum for a Q&A session. I will now hand over the conference to Mr.

Kayum Dhanani. Thank you, and over to you, sir.

Thank you. Good evening, ladies and gentlemen, and thank you for joining us on our Quarter 4 FY '26 and full year FY '26 earning conference call.

FY '26 has been a defining year for United Food Brands. After several quarters of working through a demanding consumption environment, we are closing the financial year with two consecutive quarters of strong, broad-based growth.

The trajectory with which we exited the financial year is fundamentally different from where we entered in. We delivered consolidated same-store sales growth of 14.4% in Quarter 4 FY '26, on top of 8.2% we delivered in Quarter 3.

Consolidated dine-in volume grew approximately 43% year on year, with Barbeque Nation India dine-in volume growing 47%, International dine-in volume growing 27%, and premium CDR dine-in volume growth 28%. Our delivery revenue— Sorry for interrupting,

I am in the range.

What I was saying is our CDR dine-in volume also grew 28%. Our delivery revenue also grew by 32% year on year, led entirely by transaction growth.

Every reporting segment and every channel has delivered strong double-digit growth in Quarter 4. The structural shift we spoke about in Quarter 3 conference call has not only continued, but also has accelerated in Quarter 4.

We believe these numbers, when considered together, reflect few things about how shareholders should think about our company going forward. Firstly, inflection is broad-based and structural, and not narrow.

We reported two consecutive quarters of strong positive SSSG. Dine-in volume are also accelerating quarter on quarter, and every segment of our portfolio is delivering double-digit growth.

This is not just about a single-brand recovery, but about the strength of the platform we have created. Our internal indicators of guest engagements, repeat visit frequency, and new customer acquisitions are all on upward trends.

Secondly, our demand is structurally captive. Approximately 90% of our dine-in transaction volumes are driven from our own captive channels, that are our own app and website, our own in-house reservation center, and direct walk-ins to our restaurants.

This means that our customer relationship remains direct, allowing us to engage closely with our guest, develop deeper consumer insights, and build stronger brand affinity. The dine-in volume growth of 43% is delivered through the strength of our captive demand engine, and we believe this is strong structural moat that we compounded over time.

Third, the multi-engine portfolio model is delivering as designed. When we rebranded to United Food Brands in September 2025, the rationale was that we had moved from being a single-brand operator to a multi-brand eating-out platform.

FY '26 results validate that thesis. Barbeque Nation India remains our anchor, and is delivering 47% dine-in volume growth.

International business grew at 27%, with restaurant operating margins in the range of 23 to 24%. Premium CDR revenue grew by 23%, with mature store margins above 18%.

Each engine is independently working, and together they create a diversified growth platform that strengthens our long-term outlook. Fourth, this is a moment to recognize the work that has gone into delivering these results.

The 14% SSSG and 43% plus dine-in volume growth in Quarter 4 was not driven by any significant improvement in macro environment, but led by the focused execution by our teams on guest experience, day-part demand building, culinary innovation, digital engagements, and store-level operational discipline across our 262 restaurants and our backend teams. This has been the result of patient, multi-year work that is now translating into measurable financial outcomes.

As we enter into FY '27, United Food Brands is in a fundamentally stronger position than we have been in several years. The operating momentum is strong across every segment and channels.

The multi-engine portfolio is validated. Our captive demand architecture is a structural moat that compounds.

Our balance sheet is being deployed to fund growth, and our leadership team is aligned around a clear set of priorities for the year ahead. Thank you, and I now will hand over to Rahul, who will walk you through the operating and financial performance and strategy priorities in details.

Thank you, Kayum. Good morning, everyone, and thank you for joining us today.

I will walk you through the operating performance for the quarter, the financial performance, and our strategic priorities for FY '27. Let me begin with the operating performance.

Q4 FY '26 has been the strongest operating quarter in our recent history. Consolidated revenue stood at ₹360 crores, growing 23.1% year on year.

Same-store sales growth came in at 14.4%, on top of 8.2% we delivered in Quarter 3, making this our second consecutive quarter of strong broad-based SSSG, and the strongest two-quarter SSSG performance the company has delivered in many years. The most encouraging aspect of the quarter was the quality of growth.

The growth was entirely volume-led, with no price increase undertaken during Quarter 4. Consolidated dine-in transaction volumes grew approximately 43% year on year.

Delivery business grew approximately 32% year on year, reflecting healthy growth across both channels. Barbeque Nation India has been the engine of this quarter's recovery.

Quarter 4 same-store sales growth in Barbeque India was 16.7%, accelerating up from 8.3% in Quarter 3. Dine-in transactions volume grew approximately 47% year on year.

We recorded strong growth in both new customer acquisitions and repeat customer transactions. The time gap between repeat visits has continued to compress.

Our guest satisfaction scores remain on an upward trend, and more than 60% of all dine-in transactions are now routed through our own digital channels, up from 53% in Quarter 3. Our monthly active users on our app and website have crossed 1.2 million, up 51% year on year.

I want to underline a structural point about our demand architecture that we believe significantly matters. Kayum also touched upon this.

Approximately 90% of our dine-in volume are driven from our own captive channels, that is our app, our website, our in-house call center, and walk-ins to our restaurants. The 47% dine-in volume growth we are seeing is built on direct customer relationships that we own, that compounds over time, and that are independent of external marketing economics.

Barbeque Nation International delivered strong revenue growth of 27.5% year on year in Quarter 4, with same-store sales growth of 5.5% and dine-in volume growth of approximately 27%. We continue to be encouraged by unit economics in this business.

Pre-Ind AS restaurant operating margin for the international portfolio is around 24.4%. During FY '26, we added four new restaurants in the international business, the most we have added in any year, including entry into new geographies.

We have three additional restaurants under construction across Middle East and Southeast Asia. As we enter FY '27, the foundational work of establishing our presence is done, and our focus shifts to scaling each of these markets.

Premium CDR delivered revenue growth of 23.3% year on year in Quarter 4, with same-store sales growth of 7% and dine-in volume growth of approximately 27%. We added 12 new premium CDR restaurants during FY '26, taking the network from 30 in the beginning of the year to 42 at the end of the year, a 40% expansion in a single year.

While this heavy expansion has affected near-term consolidated margins, our mature premium CDR restaurants continue to deliver pre-Ind AS restaurant operating margins of 18.4% in Quarter 4, with full-year mature restaurant operating margin at 20.1%. The unit economics in this business are working well, and the new store cohort is in expected ramp-up phase.

Across all three engines, what stood out is that Quarter 4 was the first quarter in our recent history where every reporting segment and every channel grew at strong double-digit growth rate simultaneously. This validates the multi-engine portfolio model, and is the foundation we are carrying into FY '27.

We closed FY '26 with 262 restaurants in our network. 14 new restaurants were added in Quarter 4, and 35 new restaurants in the full year.

To put this in context, the 32 net restaurant addition in FY '26 alone is more than 14 net restaurant addition during the previous two years. We have 11 more restaurants currently under construction, which are expected to be operational in Quarter 1 and Quarter 2 of FY '27.

For the full year FY '26, consolidated revenue grew by 8.6% to ₹1,339 crores. Full-year SSSG was approximately 4.7% and 850 basis point improvement over FY '25's negative print.

Before moving to financials, I want to highlight one important framing. FY '26 was a year of two distinct halves.

H1 FY '26 was a trough of our demand cycle. H2 FY '26 is where our strategic interventions visibly delivered.

H2 revenue grew 18.5% year on year. Restaurant operating profits grew year on year by 14.6%, and the volume-led inflection is continuing into Quarter 1 FY '27.

As we think about the performance going forward, the right operating base is the H2 run rate, and not the full-year average. Let me now move to the financial details.

I want to spend some time here because there are specific points that warrant careful explanation: gross margin and value-led volume strategy. Consolidated gross margin for Quarter 4 stood at 65.5% against approximately 68.5% in Quarter 4 FY '25, a moderation of approximately 300 basis point.

This compression is a result of deliberate choices. There are three factors that contributed: First, a change in the business segment mix.

Barbeque Nation India, which has a lower per-cover spend than International or Premium CDR, grew faster than the other segments, which weighted down the average realization. Second, our targeted value campaigns to drive higher throughput in weaker day-parts, lunch occasions, weekday slots, and other low-throughput sessions contributed to a lower effective realization.

Third, inflation in few input items, specifically in the Middle East business related to the West Asia crisis. Our medium-term gross margin band of 67 to 68% remains directionally where we want to operate, and we expect approximately 100 to 150 basis point of gross margin recovery in FY '27 over and above the Quarter 4 numbers.

This will be driven through procurement initiatives, scale benefits, and selective realization improvements. In our internal monthly MIS, gross margins has bottomed out in February 2026 and has inched up 100 basis point in March and April.

Let me walk you through the most important reconciliation in the deck, the mature portfolio ROM bridge explained in slide 11 in our investor presentation, because it shows what is actually happening in our underlying unit economics. In Q4 FY '25, our mature portfolio pre-Ind AS restaurant operating margin was 13.8%.

In Q4 FY '26, the mature portfolio restaurant operating margin is 14.4%, a 60 basis point improvement year on year. This improvement was net of two deliberate investments: We invested approximately 290 basis point into gross margin, as I just described above.

We invested approximately 110 basis point in additional marketing, taking our marketing spend from 1.9% of revenue to 3% of revenue. Our 14.4% SSSG generated approximately 460 basis point of operating leverage, which more than offset these investments.

What this tells us is that the operating leverage equation in this business is intact. Approximately 50% of every rupee of incremental SSSG flows through the restaurant operating profit.

The mature store economics are improving year on year, and the strategic investments we made to drive volume have funded the strongest two-quarter SSSG performance in our recent history. Consolidated pre-Ind AS restaurant operating margin in Quarter 4 was 12.6%, identical to Quarter 4 FY '25, but the composition is materially healthier.

In Quarter 4 FY '25, the new store cohort dragged 120 basis points off mature ROM. In Quarter 4 FY '26, the drag is 180 basis point, entirely because Quarter 4 was our heaviest new store opening quarter in the history.

New restaurants take 12 to 24 months to ramp up from mature store economics. The cohort we opened in Quarter 4 will move through the ramp-up during FY '27.

As they mature, the drag from these new restaurants will naturally narrow. Our backend cost as a percentage of revenue has stepped up from approximately 6.1% in Quarter 4 FY '25 to 7.1% in Quarter 4 FY '26, an increase of approximately 100 basis points.

This is deliberate structural investment in our central capabilities. We have strengthened our culinary teams, our guest experience teams, our marketing capabilities, and our digital infrastructure.

This 100 basis point step-up reflects the structurally higher investment required to support a scaled multi-brand platform. The lever from here is operating leverage as revenue scales, and not cost reduction.

We expect backend cost to compress from 7.1% to approximately 6.5% as a percentage of revenue in FY '27, and further down to 6% over the longer term. Our net debt position at the end of Quarter 4 stands at approximately ₹102 crores.

We have funded our expansion of 35 new restaurants in FY '26 from a combination of operating cash flows and a measured increase in our borrowings. We are also operating well within prudent leverage limits.

For FY '27, our intent is to continue funding our network expansion primarily from internal accruals. As our operating cash flow scales with the H2 run rate, we expect our net debt position to remain same.

Let me close with our priorities for the year ahead: First, we will continue to drive volume-led SSSG. Our internal aim is to deliver late single-digit to double-digit SSSG on a normalized base for FY '27.

We are conscious that H2 FY '27 will lap onto the strong Quarter 3 and Quarter 4 FY '26 prints, and our planning factors this in. Growth will continue to be volume-led, not pricing-led.

The customer acquisition engine that we have built over H2 FY '26 is what we will strive to further leverage into FY '27. Second, we will continue our planned network expansion.

Our existing pipeline of 11 restaurants under construction, plus an additional pipeline of advanced commercial discussions, gives us strong visibility into our plan of 40 new restaurants in FY '27. This will take our total restaurant network to 300-plus restaurants by end of FY '27.

Our internal target is to reach 400 to 425 restaurants by FY '30. Third, we would continue to build on our margin trajectory.

Our internal aim is to take pre-Ind AS adjusted operating EBITDA margin to 9 to 10% in FY '27, with a path towards double-digit margins going forward. Let me walk you through how we get there from current levels: Mature portfolio ROM, which is approximately 16% on an H2 FY '26 basis, will move to 17 to 18%.

We expect approximately 100 to 150 basis points of gross margin recovery, and the balance coming from continued operating leverage on sustained SSSG. New store drag will stabilize at 1.5 to 1.8% as our FY '26 cohort matures.

That takes consolidated ROM to approximately 15.5 to 16.5%. Backend cost will compress to 6.5% of revenue as scale benefits compound.

Net impact of these three levers would support us to achieving a pre-Ind AS adjusted operating EBITDA margin of 9 to 10%. Also, this is not a step-up in any single quarter, but a measured multi-quarter build with clear arithmetic anchors.

We will report against each levers as the year progresses. Fourth, we'll continue to scale our portfolio brands.

Premium CDR will make calibrated investments in the near markets and simultaneously focus on stabilizing new store margins. International will focus on scaling Southeast Asia and follow a cautious approach in Middle East.

The multi-engine platform gives us multiple compounding pathways and will deploy capital where unit economics justifies. Fifth, we will maintain capital allocation discipline.

Our priority order remains unchanged: we will fund expansion primarily from internal accruals and manage leverage within prudent limits. Lastly, I want to emphasize on what we are not doing in FY '27: We are not chasing discount-led growth that compromises unit economics.

We are not into entering new brand categories that could dilute our portfolio focus. We are not making new acquisitions.

We are sticking to the portfolio we have built, executing on the demand pockets we serve, and compounding from here. We believe FY '26 was the year of inflection, and our focus in FY '27 will be on building further on this momentum.

With that, we are happy to open the floor for questions.

Congratulations to the entire team. I think you guys have done a fabulous job in a tough environment.

My first question is, Rahul, in your opening statement, you mentioned that the momentum of high growth continues even in this quarter. You had mentioned that last year was a year of two halves.

First half is anyways on a low base. Assuming that we continue such strong SSSG in the first half and then, in the second statement, you mentioned we'll do high single-digit SSSG.

That means you don't expect very high growth in the second half. I'm not in the same line for me.

Can you please elaborate on that? Yeah.

Thank you, Viraj. Look, the momentum in our performance between Q3 and Q4 has been clearly visible.

Some of the initiatives that we have taken have built a momentum in Quarter 4. We are seeing this continuing in Quarter 1 of FY '27, and we also expect this to continue in Quarter 2 of FY '27, right?

As we enter into the second half of the year, my expectation is that some of these benefits of momentum that we are seeing in the later half of the cumulative year should continue in Quarter 3 and Quarter 4. We'll strive to achieve that.

I would believe that we would be able to comfortably deliver a early double-digit same-store sales growth. It is just that we are in the side of caution to give a particular guidance.

The internal aim is to definitely cross double-digit same-store sales growth in the full financial year basis.

Sure. We do expect that at least internally, we do think double-digit growth is surely possible this year

because

we have really very okayish or terrible two years. When momentum comes in QSR business or restaurant business, it does go a long way.

Anyway, my second question is on margin. Restaurant-level margins this quarter was 12.5%—or 12.6% rather.

Where do you see the exit run rate when you consolidate the new restaurants? Plus you're also opening new restaurants, so: a, where do you see the exit run rate for ROM for mature restaurants today, which is 14.5, and for the overall company, do we expect 150 basis point improvement in both of these metrics?

One, you're looking at Quarter 4, but if you look at H2, our ROM is approximately 16%, the mature portfolio ROM is approximately 15% 16%. We believe this number would go to anywhere between 17 to 18% in the short term because of gross margin improvement.

Like I mentioned in my opening remark, we already seeing some improvement in the month of March and subsequently also in the month of April. As the mature stores move to around 17 to 18%, the arithmetic beyond that is actually very simple.

We would have a drag of new store opening to the tune of around 1.5%. That would lead to our restaurant operating margin on a consol basis anywhere between 15.5 to 16.5%.

Our backend cost would be approximately 6.5%. That would give us a consolidated corporate-level pre-Ind AS operating margin of 9

to 10%. Right.

Sorry, I missed the debt number for the quarter. Where did we end?

What is our current debt?

100 crores. Our net debt is around 100 crores.

Right. Let's say, we open 40 new restaurants.

You think we will remain at this level of debt or will we have incremental more debt next year?

No, we should not. We're planning a CapEx of approximately 140 crore for next year.

This would include around 30 restaurants in India at a average spend of, let's say, 2.5 crores, which will give us 75-odd crores. International will have five new restaurant at average spend of around 6 crore, which will be around 30 crores.

Premium CDR, another five store, at average spend of 3 crores, which will take around 15 crores. Around 120 crores will go towards new store expansion, and balance 20 crore will go towards maintenance and some renovations and uplifting that we do.

Approximately 140 crores. If you're expecting a margin of around 9% also on a lower end of our target, I think we will generate this much amount of operating cash.

Sure. Thank you.

My last question is on the revenue bit. Assuming we do 10% store expansion—we are doing slightly more than that, but let's say, conservatively, we do around 12, 13% store expansion throughout the year, and we do double-digit SSSG, then is it reasonable to assume that we grow anywhere between 20 to 25% revenue this year, at least?

Yes, on a full-year basis, yes.

Absolutely. Thank you so much, and best of luck.

Thank you.

Team, many congratulations for a very strong quarter. Rahul, I wanted to check on this SSD trends improving in Q4 versus Q3, basically our formats are getting very strong traction.

For next two quarters, before the higher base sort of laps of, should this improving trajectory continue for us, right? Is this the right way to look at it or there are some macro-related headwinds that you foresee where the Q4 trends are more like which we should bake in for the first half?

First half FY '27, I expect the Q4 level numbers to continue. If the momentum that is built up in Quarter 2 versus Quarter 3, there may be some improvement also in Quarter 1.

Is that what you're asking, or also asking about H2 of next year?

I got your comments related to H2. I was just checking as in how H1 should pan out.

You're saying that there can be some improvement in Q1 before the base sort of starts catching up, right?

Yeah. Depending on the momentum that we saw between Quarter 3 and Quarter 4, I think the initiatives that we took plus the campaigns and the marketing investments that we did definitely helped us to carry on the momentum in Quarter 4, and which is why we see a shift between Quarter 3 of 8% versus Quarter 4 of 14%.

The base itself was approximately -2, -3 in pretty much all the quarters. If the momentum that we are seeing in the early days of this quarter continues, we should do slightly better than what we did in Quarter 4.

Very encouraging. Second on the margin front, right?

We are definitely entering an inflationary cycle, right? There is inflation expected to increase on raw material, as well as on the utilities, petroleum side as well.

Despite that, you are expecting about 100 and 100 to 150 bps gross margin benefit, as well as some operating leverage as well. I wanted to check these improvements that you are expecting, these are ex of the inflationary trends which may happen or that is also sort of baked in the guidance that you have provided?

At the current numbers, I think those are baked in. We strive to be at between 67 to 68 range.

If you look at FY '25, we were at that range. We exited the year with around 68.5%, right?

Today, the gap is already narrowed to around 3 percentage point. From here on, what we are only saying is that it will improve by 100 to 150 basis point, and the gap between FY '25 peaks of 68.5 will still be approximately 1 to 1.5%.

I think the numbers that we are looking at, which is 67 to 68, will be after adjusting for some of the inflationary pressures that we are seeing. My big guidance also is the recent months, despite price increase in LPG, despite some of the inflationary pressures that we've seen in our Middle East business, I've seen overall consolidated margins slightly inching up in both the months.

Sure. Rahul, just a small follow-up here.

You have been mentioning that this gross margin drop has been because we have been sort of targeting higher promotions, etc., in non-peak hours, right? What is that big initiative that you're taking which should help you sort of drive this 100 to 150?

I am assuming here that you will not pull back on the initiatives that you're taking towards non-peak hours. What is the initiative that should drive your gross margin improvement here?

Look, we did all of these starting from last year, July, August onwards, and relentlessly kept looking at every restaurant, every session, every day-part, and how to optimize those, and just kept working on what price works for the trade area and what sort of campaigns or what sort of product also works for that trade area. I think we did that over a period of eight months, and we saw the continuous impact of these in our gross margin, which actually bottomed out in the month of February.

Post that, as we saw the momentum building up, as we started seeing some refusals in some of the day-parts, we realized that now is the time to take a very, very marginal pull-back on some of these campaign offers and move some of these to a let's say, full-price offering. That is the improvement that has helped us to improve our gross margins between February to March and March to April.

In these minor tweaks and corrections, we'll keep on doing. Absolutely not at the cost of driving our volumes.

I think we understand how each of these levers are moving. What we are talking about on a net basis is approximately ₹15 to ₹20 net realization from each of the covers done.

There we have levers like what is the base pricing, levers like what is the group offering pricing that is being done, what is the beverage contributions that would come from these. It's mix and match across each of these locations, which is giving us enough comfort that we would be able to command additional ₹15 to ₹20 of price realization as we move forward.

Makes sense. Sir, last question on International.

The SSSG is in mid-single digit, right, there? When we compare the currency depreciation, it's around 10-odd percent versus last year.

Actually, in local currency terms, the SSSG is actually declining. Is that a right inference, or maybe if you could help me correct my understanding?

It's a mix because International business also has around four locations outside of Middle East. There is some currency appreciation here, but net of that also, the overall SSSG numbers is positive for the entire year.

Okay. What's the expectation given that the Middle East part is still a bit uncertain?

Maybe if you could guide us what we should expect for the current year?

We have seen out of our entire portfolio of around eight restaurants, two restaurants specifically are impacted. One is in Bahrain and the other one is in Dubai.

In both of these places, we have seen continuous month-on-month improvement in the month of April and May from what they were in the month of March. I think we have also looked at some of the initiatives that we drove in India in that market.

Our overall volume growth there is also very handsome. Obviously, this is tough time in that market, but we have been very cautious and trying to ensure that we keep getting the daily volumes that we do in the past.

The month-on-month improvement is definitely encouraging, but how this shapes up is very difficult to predict frankly today. What I've seen in last 2, 2.5 months, and some of the numbers already with you, it is not that worrying.

We obviously are feeling inflation impact in that market. We have two restaurants under construction, which also is seeing some inflation impact.

We are very cautious about signing any new store in that market. We have not sort of looked at anything for last three months.

That's what our approach should be. We'll just wait and watch, and try and maximize the potential of our existing stores that we have there.

Got it. Thanks, Rahul.

All the best to your team for this continued strong momentum in FY '27 as well. Thank you.

Thank you, Devanshu.

Hello.

Rushabh.

Am I audible?

Yes.

Yeah. Rahul, congratulations on a great set of numbers.

It's been a

fantastic performance. Just one question on the premium CDR segment.

In Quarter 4, we added four stores in the CDR segment, but our margins have literally collapsed versus Quarter 3, especially considering the fact that more than one-year-old stores have delivered a 7% SSSG. What explains this margin collapse?

It's entirely new restaurants. If you're comparing this with Quarter 3 versus Quarter 4, Quarter 3 is perennially a very good quarter.

The December months generally do extremely well, and there's a disproportionate benefit from operating leverage that you command. You will see this impact across all our business segments.

Quarter 3 and Quarter 4 is not entirely comparable even when you look at four stores added in Quarter 3 versus four store added in Quarter 4. The second impact also is that in Quarter 3, the stores pretty much came around November.

December is when we don't plan and launch any new restaurants because it gets very difficult operationally to also manage the demand in the stores and also look for new stores, right? Most of these had done their first month in the previous October, November itself.

In Quarter 4, obviously, it's a different sort of base, and some of the new stores that we opened in Quarter 4 also had impact of one-time initial setup cost, one-time liquor cost, all sort of baked into the Quarter 4 financials. I won't say this has collapsed.

I think I'm looking at this very objectively between two segments: one is mature portfolio and the new portfolio. Mature portfolio cohort is performing absolutely fine.

The new portfolio is also, by the way, not in existing market, but in newer markets of Bombay and Delhi, right, which is not a home market and will take some time to build up. We are seeing month-on-month improvement.

We are seeing month-on-month also improvement in our operating margins there. This is a place where the team will focus the most in the current financial year and will bring it back so that they start getting mature margin in this new store portfolio also.

Right. Is it fair to assume that some of the new restaurants, they are in premium areas, and the rents are slightly higher, one of the reasons?

Is it fair to assume something?

That's true for the entire segment. All 42 restaurants are in premium areas, and rent is slightly higher relatively as you compare it with Barbeque system, yes.

Okay. Rahul, my second question is on the store additions that we are doing.

After a gap, we are looking to accelerate store additions in a meaningful way. It's almost over the next three years, we are keeping almost 400-plus stores, right?

The last time that we did that, it really hadn't worked out well, and we had to shut many stores. What learnings from then give you the confidence that we will not face a similar situation again?

Follow-up to that, can we expect that the baseline restaurant operating margin in BBQ India to maintain in absolute terms despite this addition?

Yeah. We are only targeting to add 40 on a base of sorry, 40 on a base of 262, right, which is approximately, 15-odd percent.

We have added 35 this year new restaurants on a base of of around 230, which again is approximately 15-odd percent, right? We are not changing that materially.

Post that, we are planning to add 100 to 125. Sorry, I didn't understand your comment on plan to achieve 400.

This 400 is a cumulative target and not the addition. If you're looking at 100 to 125 over a period of three years, we are again only talking about about 40 to 45, right?

We have done it done it in the past. Yes, in FY '23, some of the restaurants, didn't work out.

We closed some of these in Tier 2, Tier 3 markets. I strongly believe that with the recent performance over last three quarters, we have an operating model in place in in some of the Tier 2, Tier 3 markets also now.

Frankly, in hindsight, if if these initiatives that we took now would have taken at that time, maybe would not have shut another five, six restaurants, right? This is also a factor of of market, marketing.

Some of the efforts that were taken in the tough phase didn't work out. I think it's cumulative, and the learnings in our business has always been incorporated.

It's not the first time that we that we saw stress in any of our business segments. We've seen that multiple times in our in our 20-year journey, and and we have come out of it very strongly.

I think we are in that phase now. The store expansion target, too, in my mind, is is not at all aggressive.

It is it is very moderate. 15% expansion, is is is not a large number.

We have always said that we'd build ourselves to open 8 to 12 restaurants every quarter. Last quarter, we added 14.

Previous quarter, we added around around eight. It it also depends on the the life cycle of a new restaurant coming up is slightly larger.

I think 40 is something which is which is comfortably doable, and and it is not putting stress in the in the entire system. I think, more importantly, I think there's a lot of opportunities in in this country where where we can scale this this brand to a much larger scale.

Right. Rahul, the clarification that you made in your opening remarks and to a couple of answers that you gave.

What you said was that the FY '26 has been basically a tale of two halves, and the second half should be considered as a normal half. Going ahead, that revenue growth of 20 to 25% on that—

Is it better now?

Rahul, what I was trying to say is that you've said that FY '26 was a tale of two halves, where H2 was a slightly normalized base that to consider. When you say that late single-digit to a early double-digit SSSG that you're talking on FY '27 on a normalized base, should we consider that normalized base as annualized H2 along with a 9 to 10% pre-Ind AS EBITDA margins?

Is that a fair assumption?

We are looking at around double digits in FY '27 overall with around 9 to 10% overall pre-Ind AS restaurant EBITDA margin.

Right. Rahul.

Thanks a lot, and wish you all the best. Thank you.

Thank you, Rushabh.

Sir, I just have one question since a lot of people have asked everything. My question is a clarification.

The margin bridge that you are building up with reference to the H2 number, is that correct, right? You are saying there are two halves.

H2 is a number which has to be looked at, and then the margin bridge has to be built in. Is that the way?

That margin bridge which you're building is for the full year and not as an exit for FY '27. When you're referring to 9% or 10% pre-Ind AS margin is a number for full year and not an exit number.

Yes, that's our internal aim. Because then

what happens is the margin expansion is from the base year of FY '26 is about 400 basis points. You are at pre-Ind AS 5% in full year, and because there were two halves which are different, so that number is a substantially bigger number.

Is that correct, right?

Yes. H1 was approximately 3%.

H2 was approximately 8%. Next year, we wish to continue on our momentum of H2 and expect it to be 9 to 10%.

Okay. Now in this, basically, if you could tell us in this 400 bps expansion, and when you look at your Quarter 4 margin bridge, you have a Quarter 4 margin bridge which you have put in the presentation, which talks about a 60 bps margin expansion based on price discount plus marketing expense, increase in operating leverage increase, you had a margin bridge of 60 bps.

I am unable to understand that margin bridge versus the full-year margin now that you're trying to plot for next year.

On a full-year basis, we are expecting around 17 to 18% mature restaurant operating margin. In this slide that you are seeing, the restaurant operating margin is approximately 14.

Can I just ask you here itself, you have a business model which is seasonal in nature, right, where your Quarter 4 number sorry, Quarter 3 is the highest number. You have those lean seasons and peak seasons, right?

I hope that lean season, peak season phenomena is factored when you're calling out a 9 to 10% full-year number.

Yes.

Correct?

Yes, correct.

Correct. That was my clarification, Rahul.

Thank you very much. Can you just extend this conversation to maybe a year later?

Let's say, if we look at FY '28, then how should your business model further look like if this conversation is extended on growth and margin in FY '28?

See, the overall bridge is actually very simple. It starts with mature restaurant operating margin, and that is a number that we should look at most closely.

I think we are guiding to around 14 17 to 18% in FY '27. Depending on some of the initiatives that we took on the gross margin side, on operating leverage side, this number has to slightly inch up.

Once this inches up, I think everything else is pretty simple. The new store margin drag is a function of new store size that you open up.

That, in my view, will be in the range of between 1.2 to 1.8% depending on how many new sites you opened up in last 12 months. This will give us consolidated ROM.

The second is backend cost. I think on the backend cost, we had some increase in the current quarter, and now this will also auto-correct and have the operating leverage advantage as we move forward.

Our first step would be to reach a milestone of around 9 to 10% in FY '27, and thereafter, inch it up higher.

Hi, Rahul. Congratulations for the great set of results.

Question is towards the AOV,

Hello. Is it clear now?

Yeah. My question is towards the AOV, specially for Barbeque India segment.

How has the average order value or the average per person cost for the Barbeque India customer has trended over the years?

We don't call out specific numbers, but as you can see, the overall dine-in growth versus overall dine-in transaction growth, there's a difference which led to an overall company-level AOV decline of around 14, 15%. This, obviously, is a mix of change in business mix.

Like I said, we have higher covers done in Barbeque India, which is at a lower APC than what we command in International business or Premium CDR business. The second impact is we have built our weaker day-parts, which by design is at lower APC.

Our average realization is actually largely a change in the mix that we have seen in our business. On a trend basis, this may continue for two more quarters, and after that, we automatically settle down.

Okay. It's fair to assume that the new levels will be slightly lower than the earlier levels that we have seen historically?

No, it will be similar to what we saw in the previous two quarters, yes.

Okay. Got it.

Thank you so much.

Thank you.

Hi, team. Good morning, and congratulations for very good execution and very good numbers.

First question, Rahul, is that a large part of our growth is led by volumes, and we had always maintained that per restaurant a revenue of ₹6 to ₹7 crore with certain kind of cover fees and certain volume. Now, when the volume goes up significantly, and because of the changes that we have made in the day-part side of it, is that number changing, and will there be a limit on that SSSG growth because of the number of table turns that we can do in a session?

How should we think about it beyond FY '27? With this model, is that number materially changing?

Look,

we have to appreciate the power of value-driving offers in this country. In a lot of other models, we have seen also working extremely well, and when volume-driven strategy works for those businesses.

We have seen this accelerating between Quarter 3 and Quarter 4. We are also seeing the momentum continuing in Quarter 1 of this financial year.

I think our role is to keep executing, keep focusing on providing the guest experience and engagement that we are doing. More importantly, while you spoke a lot about value offers, we have to also appreciate that a lot of work has been gone towards building guest engagements, be it through various chef-driven activities, be it through various store-level engagements that we have done.

I think we'll keep doing all this with a clear focus that we would want to build volumes in our business. Whether this accelerates further from here, we would definitely love to see that.

I think any acceleration from here would lead to also driving average revenue per cover on a overall basis, which will then translate into margins. I think the numbers that we have sort of taken as internal benchmarks are based on the current numbers.

I would not be surprised if this surpasses also because of the momentum that is continuing in future. I think when we come back after Q1 results, we will have better view on how the full year is also trending, and if there's any change in our internal aims or internal targets that we've taken for the next financial year.

I would leave up to that. I think as of now, we are happy, and we are also extremely focused on building up the volumes that we have done in last two quarters.

Right. No, my clarification, Rahul, is that ₹7, ₹7.5 crore at peak utilization number, is that intact or will it change because the volume cover equation has changed now?

That's the question, right? Because there is a finite number of volume that we can handle in a session.

No, that's not the problem. Because, look, technically, we have four sessions that we can do in any single day.

We can do two of lunch and two of dinner. Let's assume we have 100 seats in a restaurant.

Technically, we can do 400 seats every day, which on 30-day basis is 12,000 covers in a month, and which at a price point of let's say, even at a price point of ₹750, we're talking about ₹9 crores, right? We do this number of four table turn in large part of our restaurants on peak days like 31st December or 1st January, right?

If volume keep coming, if demand keep coming, I don't think we have a supply or a constraint problem. Even if we have, for us, adding another restaurant in the similar trade area at a distance of 5 to 7 km is also very much possible.

We keep doing that, right? When we do expansions, we keep taking this into accounts saying the volumes have gone up to a level which is impacting the guest experience.

We go ahead and open one more maybe around 6, 7 km apart. I don't know if that's the question that you had.

No. I think that's the question.

I think you answered it correctly. Thank you.

That's it from my side.

Okay. Thank you.

Yes. Good afternoon, Rahul.

First a clarification and then two questions. On the Salt and Toscano side, what is the store addition we are planning for FY '27 and '28?

FY '27, our internal aim is around five restaurants. I think '28, this can be anywhere between 5 to 5 to 12.

I think the first focus, like I said, is stabilizing the existing new store portfolio. We have almost tripled our store count from 14 to 42 now.

This year, we will add five. Maybe after two, three quarters, we will be able to further crystallize on FY '28.

My current range is around 5 to 10.

The peak revenue per store like you explained for Barbeque is, say, roughly ₹8, ₹9 CR, what should we assume the number for these stores, Salt and Toscano individually?

The peak restaurant in Salt and Toscano does around ₹11, ₹12 crores, right? By the way, Barbeque numbers peak also is at around ₹12 to ₹13 crores in India.

I don't think we have a capacity sort of problem in any restaurants. If the demand is very well distributed, I think we can easily do three table turns, or let's say 100-seater restaurant can do 300 covers in a day, which is 9,000 covers in a month.

A lot of restaurants does it also. We don't have a peak sort of problem.

Sure. My second and final question is the strategy which you deployed in the last six to nine months, where you focused more on weekends, lunch, and even weekdays, could you give some quantitative numbers in terms of change in footfall you saw pre this and post the changes you made, both for weekends and weekdays, if you can talk about?

The overall growth number is around 47%, Aman, between last year and this year, right, on dine-in sides. This is broadly what will give you a sense of how the walk-ins have moved inside.

Even on weekends, there are some sessions, like I've explained earlier, there are four sessions in a day. In weekends also, if some sessions are not doing in some trade areas, we have intervened to see how we can also improve our conversion.

I think one thing that we should also appreciate is that our demand structure is largely captive, right? We exactly understand which guest or which customer is coming on which platform.

Is he on our call center? Is he on our app or website?

Depending upon the reservations in the existing restaurant or in that slot, the call center or the app would sort of tweak some offers or campaigns to ensure that our conversion grows higher. I think a lot of these digital initiatives have also happened just to ensure that whatever campaigns that we ran for our guests is actually reached the guest and also when the guest comes in, they are converted.

It is not just a simple tool of reconfiguring the price and waiting for the business to happen. I think overall, we have to look at the 47% growth numbers that we have seen, and that is on back of another 25 that we saw in Quarter 3.

That structural momentum in the business is what I see working on a day-to-day basis. That is why I believe that that's the new base for us now.

Just clarification. This dine-in volume growth for FY '27, what do you see this number to be?

I can't give you a number for the full year. What I can say is that the current momentum will continue as we are seeing definitely for the first half.

Also in the second half, given that the momentum build-up is 8 and 14 in the first and second quarter. We'll keep doing our work, and we'll keep coming back to you as the numbers sort of comments.

I think what we are most excited about today is that this strategy is working. We are seeing our guest scores improving a lot.

We are seeing our repeat guests working to our advantage. We'll just build up on that, Aman.

Sure, Rahul. Thank you for answering the questions.

Thank you.

No, my question was answered. Thanks, guys.

Congrats, Rahul. Congrats, Amit.

Great set of numbers.

Thank you, Suryansh.

Thank you for the opportunity. Congrats, sir, for the great numbers here.

I have one quick question, or rather two. Basically, I was just analyzing the presentation that we have given on the investor website, and I was checking the Barbeque International and premium CDR segment SSSG numbers.

They're comparatively low for our Barbeque chain. Can you take us through some steps which you're taking to increase it and what this number can be target in FY '27?

Second question is in our last conference call, you were saying that we are looking for a 25% revenue growth in each and every quarter in '27. Just wanted to understand your thought process on this also.

On SSSG in the other two platforms, I think the International business is also operating in a slightly difficult macro environment. Despite that, if the company is delivering mid-single digit numbers, it's very, very commendable.

I think the team there is doing a great job, and they have also sustained this SSSG over a longer period of time, over a period of last five years. The SSSG has been compounding, and the average revenue per store is approximately ₹12, ₹13 crores, which is a very good numbers.

I think we'll strive to maintain this balance and be at around mid-single digit numbers. That is our internal aim.

Similarly, in our premium CDR business, we would maintain a similar range of mid-single digits that we have done in the past. I think the focus in that business is scaling up.

The mature portfolio is doing well, and that is what the planning is to scale it up well and the new store margins, which have slightly compressed now, is what we'll try and ramp it up to the mature portfolio levels. Sorry, Jatin, I missed the second part of your question on growth.

Can you please repeat that?

Sure, sir. Sir, basically, coming back on this first question, basically, what could be a blended SSSG for these premium CDR and BBQ International that we can expect for FY '27?

On a blended basis, our internal aim is to be at early double-digit numbers.

Okay. That's great, sir.

Sir, my second question was in the Q3 conference call, we were saying that we are expecting around 25% revenue growth in the coming next quarters, like Q1, Q2, Q3, and then Q4. Just wanted to understand your thought process on this we mentioned in the last conference call.

In the current quarter, we have delivered 23%. Also, the growth is a function of two very important factors: one is same-store sales growth, and the new expansion.

On both the attributes, I think we are in a very strong footing. We will just continue to work on these parameters, and try and achieve the aim that we have internally.

Sir. Thank you, and all the best for all the efforts that you're putting in.

Thank you.

Thank you everyone for joining us on call today. We are MUFG InTime, investor relation advisers to United Food Brands Limited.

In case of any queries, please feel free to reach out to us. Thank you.