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UNITED FOODBRANDS LIMITED — Call Transcript 2026
May 27, 2026
61188_rns_2026-05-27_5881051b-6645-4d38-addb-47a42e2404d4.pdf
Call Transcript
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United Foodbrands
Date: May 27, 2026
To,
| The Manager
Listing Department
BSE Limited,
P.J. Tower, Dalal Street
Mumbai – 400001
Maharashtra, India
Scrip Code: 543283 | The Manager
Listing & Compliance Department
National Stock Exchange of India Limited
Exchange Plaza, Bandra-Kurla Complex
Bandra (East), Mumbai 400051
Maharashtra, India
Scrip Symbol: UFBL |
| --- | --- |
Dear Sirs,
Subject: Transcript of Earnings Conference Call held on May 20, 2026
Pursuant to Regulations 30(6) and 46(2)(oa) read with Para A of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we hereby enclose the transcript of Earnings Conference Call held on Wednesday, May 20, 2026 at 11:00 AM (IST), post announcement of Financial Results of the Company for the quarter and financial year ended March 31, 2026. The audio recording of the said Earnings Conference Call along with the Transcript have been uploaded on the Company's website at www.unitedfoodbrands.in under Investors section.
This is for your information and records.
Thanking you.
Yours faithfully,
For United Foodbrands Limited
(Formerly known as Barbeque-Nation Hospitality Limited)
NAGAMANI
CHIKKONDIHALLI
YEKAMBARESWA
RA
Digitally signed by
NAGAMANI
CHIKKONDIHALLI
YEKAMBARESWARA
Date: 2026.05.27
16:43:41 +05'30"
Nagamani C Y
Company Secretary & Compliance Officer
M. No: A27475
Encl.: As above
UNITED FOODBRANDS LIMITED
(Formerly known as Barbeque-Nation Hospitality Limited)
Registered & Corporate Office: "Saket Callipolis", Unit No. 601 & 602, 6th Floor, Doddakonnalli Village, Varthur Hobli,
Sarjapur Road, Bengaluru-560035, Karnataka, India. CIN: L55101KA2006PLC073031
T: +91-80-69134900 | E-mail: [email protected] | WWW.UNITEDFOODBRANDS.IN
United Foodbrands Limited
United Foodbrands
United Foodbrands Limited
(Formerly known as Barbeque-Nation Hospitality Limited)
Earnings Conference Call
Q4 and Full Year FY2026
May 20, 2026
Management:
Kayum Dhanani : Managing Director
Rahul Agrawal : Chief Executive Officer & Whole Time Director
Amit V Betala : Chief Financial Officer
Bijay Sharma : Head - Investor Relations
1 | United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Moderator:
Ladies and gentlemen, good day, and welcome to United Foodbrands Limited Q4 and Full Year FY'26 Earnings Conference Call hosted by MUFG Intime. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Bijay Sharma from United Foodbrands Limited. Thank you, and over to you, Mr. Sharma.
Bijay Sharma:
Thank you. Welcome, everyone to United Foodbrands 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.
Kayum Dhanani:
Thank you. Good morning ladies and gentlemen, and thank you for joining us on our Q4 and full year FY'26 earnings conference call. FY'26 has been a defining year for United Foodbrands. 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 it.
We delivered consolidated same-store sales growth of 14.4% in Q4 FY'26 on top of 8.2% we delivered in Q3. 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 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 Q4. The structural shift that we spoke about in Q3 conference calls has not only continued but also has accelerated in Q4.
We believe these numbers, when considered together, reflect a few things about how shareholders should think about our Company going forward.
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Firstly, inflection is broad-based and structural, and not narrow. We reported two consecutive quarters of strong positive SSSG. Dine-in volumes 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 engagement, 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 guests, 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 a strong structural moat that we compounded over time.
Third, the multi-engine portfolio model is delivering as designed. When we rebranded the United Foodbrands 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 validates 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 Q4 was not driven by any significant improvement in macro environment but led by the focused execution by our teams on guest experience, daypart demand building, culinary innovation, digital engagement and store level operational discipline across our 262 restaurants and our back-end teams. This has been the result of patient multiyear work that is now translating into measurable financial outcomes.
As we enter into FY'27, United Foodbrands is in a fundamentally stronger position than we have been in several years. The operating momentum is strong across every segment and channel. 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 now I will hand over to Rahul, who will walk you through the operating and financial performance and strategic priorities in detail.
3 | United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Rahul Agrawal:
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 INR360 crores, growing 23.1% year-on-year. Same-Store Sales Growth (SSSG) came in at 14.4% on top of 8.2% we delivered in Q3, 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 Q4. 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. Q4 same-store sales growth in Barbeque India was 16.7%, accelerating up from 8.3% in Q3. 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 our dine-in transactions are now routed through our own digital channels, up from 53% in Q3. 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 compound over time and that are independent of external marketing economics.
Barbeque Nation International delivered strong revenue growth of 27.5% year-on-year in Q4 with same-store sales growth of 5.5% and dine-in volume growth of approximately 27%. We continue to be encouraged by the unit economics in this business. Pre-Ind AS restaurant operating margin for the international portfolio is around 24.4%.
During FY'26, we added 4 new restaurants in the international business, the most we have added in any year, including entry into new geographies. We have 3 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 Q4 with same-store sales growth of 7% and dine-in volume growth of approximately 27%. We added 12 new
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
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 Q4 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 3 engines, what stood out is that Q4 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 Q4 and 35 new restaurants in the full year. To put this in context, the 32 net restaurant additions in FY'26 alone is more than 14 net restaurant additions during the previous 2 years. We have 11 more restaurants currently under construction, which are expected to be operational in Q1 and Q2 of FY'27.
For the full year FY'26, consolidated revenue grew by 8.6% to INR1,339 crores. Full year SSSG was approximately 4.7% and 850 basis point improvement over FY'25 negative trend. Before moving to financials, I want to highlight one important framing. FY'26 was a year of 2 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 Q1 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 Q4 stood at 65.5% against approximately 68.5% in Q4 FY'25, a moderation of approximately 300 basis points. This compression is a result of deliberate choices. There are 3 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 dayparts, 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
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
where we want to operate, and we expect approximately 100 basis points to 200 basis points of gross margin recovery in FY'27 over and above the Q4 numbers. This will be driven through procurement initiatives, scale benefits and selective realization improvements. In our internal monthly MIS, gross margins have bottomed out in February 2026 and have inched up 100 basis points 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 matured portfolio restaurant operating margin is 14.4%, a 60-basis point improvement year-on-year. But this improvement is net of 2 deliberate investments. We invested approximately 290 basis points into gross margin, as I just described above. We also invested approximately 110 basis points in additional marketing, taking our marketing spend from 1.9% of revenue to 3% of revenue. Our 14.4% SSSG generated approximately 460 basis points 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 2 quarter SSSG performance in our recent history. Consolidated pre-Ind AS restaurant operating margin in Q4 was 12.6%, identical to Q4 FY'25, but the composition is materially healthier.
In Q4 FY'25, the new store cohort dragged 120 basis points of mature ROM, in Q4 FY'26, the drag is 180 basis points, entirely because Q4 was our heaviest new store opening quarter in the history. New restaurants take 12 to 24 months to ramp up to the mature store economics. The cohort we opened in Q4 will move through the ramp-up during FY'27. As they mature, the drag from these new restaurants will naturally narrow.
Our back-end cost as a percentage of revenue has stepped up from approximately 6.1% in Q4 FY'25 to 7.1% in Q4 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 scale and not cost reduction. We expect back-end 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 Q4 stands at approximately INR102 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
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
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 the same.
Let me close with our priorities for the year ahead. First, we would continue to drive volume-led SSSG. Our internal aim is to deliver mid-single-digit to double-digit SSSG on a normalized base for FY'27. We are conscious that H2 FY'27 will lap on to the strong Q3 and Q4 FY'26 trends 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'll 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%. Back-end costs will compress to 6.5% of revenue as scale benefits compound. Net impact of these 3 levers would support us to achieve 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'll report against each lever as the year progresses.
Fourth, we'll continue to scale our portfolio of brands. Premium CDR will make calibrated investments in the newer 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 we'll deploy capital where unit economics justify it.
Fifth, we will maintain capital allocation discipline. Our priority order remains unchanged. We'll fund expansion primarily for 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 comprises unit economics. We are not into entering new brand
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United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
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 a 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.
Moderator:
Thank you. We will now begin the question and answer session. The first question comes from the line of Viraj from Enigma.
Viraj:
First of all, congratulations to the entire team. I think you guys have done a fabulous job in a tough environment. My first question is, Rahul, in the opening statement, you mentioned that the momentum of high growth continues even in this quarter. As you had mentioned that last year was a year of two halves. The 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 like high single-digit SSSG. That means you don't expect very high growth in the second half. Like those two statements are slightly not in the same light for me. Can you please elaborate on that?
Rahul Agrawal:
Thank you, Viraj. The momentum in our performance between Q3 and Q4 has been clearly visible. Some of the initiatives that we have taken have built the momentum in Q4. We are seeing this continuing in Q1 of FY'27 and we also expect this to continue in Q2 FY'27. 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 latter half of the cumulative year should continue in Q3 and Q4. And we strive to achieve that. I would believe that we would be able to comfortably deliver an early double-digit same-store sales growth. It is just that I'm on the side of caution to give guidance. Internal aim is to definitely cross double-digit same-store sales growth on the full financial year basis.
Viraj:
Sure. So at least internally, we do think double-digit growth is surely possible this year.
Rahul Agrawal:
Absolutely.
Viraj:
And because we have like really very okay or terrible 2 years and now when momentum comes in QSR business or restaurant business, it does go along. Anyway, my second question is on margins. Restaurant level margin this quarter was 12.2%, where do you see the exit run rate when you consolidate the new restaurants plus you're also opening new restaurants? So, where do you see the exit run rate for ROM for mature restaurants today, which is like 14.5% and for the overall Company? Can you just like a rough ballpark? Do we expect 150 basis point improvement in both of these metrics?
Rahul Agrawal:
You are looking at FY'26 ROM, but if you look at H2, our mature portfolio ROM is approximately 16%. We believe this number would go to anywhere between 17% to 18%
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
in the short term because of gross margin improvement. Like I mentioned in the opening remarks, we're 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 consolidated basis anywhere between 15.5% to 16.5%. Our back-end cost would be approximately 6.5%. So that would give us a consolidated corporate level pre-IndAS operating margin of 9% to 10%.
Viraj: Right. Sorry, I missed the debt number for the quarter. What is our current debt?
Rahul Agrawal: Our net debt INR100 crores.
Viraj: Right. And let's say, we open 40 new restaurants, do you think we will remain at this level of debt or will we have incremental more debt next year?
Rahul Agrawal: No, we should not. We are planning a capex of approximately INR140 crores for next year. This would include around 30 restaurants in India at an average spend of, let's say, INR2.5 crores, which will give us INR75-odd crores. International will have 5 new restaurants and an average spend of around INR6 crores, which will be around INR30 crores. Premium CDR, another 5 at an average spend of INR3 crores, which will take around INR15 crores. Around INR120 crores will go towards new store expansion and balance INR20 crores will go towards maintenance and some renovations and uplifting that we do. So approximately INR140 crores. And 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.
Viraj: Sure, thank you. And 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 22% to 25% revenue this year at least?
Rahul Agrawal: On a full year basis, yes.
Viraj: Absolutely. Thank you so much and best of luck.
Moderator: Thank you. Next question comes from the line of Devanshu Bansal with Emkay Global. Please go ahead.
Devanshu Bansal: Many congratulations for a very strong quarter. Rahul, I wanted to check on this SSSG 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 up, should this improving trajectory continue for us, right? So, is this the right way to look at it or there are some
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
macro-related headwinds that you foresee where the Q4 trends are more like which we should bake in for the first half?
Rahul Agrawal:
First half FY’27, I expect the Q4 level numbers to continue. And if the momentum that has built up in Q2 versus Q3, there may be some improvement also in Q1. Is that what you're asking? Also asking about H2 of next year?
Devanshu Bansal:
Yes, I got your comments related to H2. I was just checking, 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?
Rahul Agrawal:
Yes. Depending on the momentum that we saw between Q3 and Q4, I think all the initiatives that we took plus the campaigns and the marketing investment that we did definitely helped us to carry on the momentum in Q4 and which is why we see a shift between Q3 of 8% versus Q4 of 14%. And the base itself was approximately minus 2%, minus 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 Q4.
Devanshu Bansal:
Very encouraging. And second, on the margin front. We are definitely entering an inflationary cycle. There is inflation expected to increase on raw material as well as on the utilities of petroleum side as well. But despite that, you are expecting about 100 bps to 150 bps gross margin benefit as well as some operating leverage as well. I wanted to check these improvements that you're 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?
Rahul Agrawal:
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%. And today, the gap is already narrowed to around 3 percentage points. From here on, what we are saying is that it will improve from by 100 basis points to 150 basis points. 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. And my big guidance also is the recent months despite price increase in LPG, despite some of the inflationary pressures that we have seen in our Middle East business, I've seen overall consolidated margins slightly inching up in both the months.
Devanshu Bansal:
Sure. Rahul, so 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. What is that big initiative that you're taking, which should help you sort of drive this 100 basis points to 150 basis points? I am assuming here that you will not pull back on the initiatives that you are taking towards non-peak hours. But what is the initiative that should drive your gross margin improvement here?
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United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Rahul Agrawal:
Look, we did all of these starting from last year, July, August onwards. And relentlessly kept looking at every restaurant, every session, every daypart 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 the trade area.
I think we did that over a period of 8 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 dayparts, we realized that now is the time to take a very marginal pullback 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. These minor tweaks and corrections we'll keep on doing, but absolutely not at the cost of driving our volumes. I think we understand how each of these levers are moving. And what we're talking about on a net basis is approximately INR15 to INR20 net realization from each of the covers done. And 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 contribution that would come from these? And it's mix and match across each of these locations, which is giving us enough comfort that we would be able to command additional INR15 to INR20 of price realization as we move forward.
Devanshu Bansal:
Last question on international. The SSSG is in mid-single digit, right, there. But when we compare the currency depreciation, it's around 10%-odd versus last year. So 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?
Rahul Agrawal:
International business has around 4 locations outside of Middle East. There is some currency appreciation here, but net of that also, the overall SSSG numbers are positive for the entire year.
Devanshu Bansal:
Okay. And what's your 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?
Rahul Agrawal:
Out of our entire portfolio of around 8 restaurants, 2 restaurants specifically are impacted. One is in Bahrain and the other one is in Dubai. And in both of these places, we have seen a 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 a 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, it's very difficult to
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predict, frankly, today. But what I have seen in the last 2 - 2.5 months and some of the numbers are already with you, it is not that worrying. We obviously are feeling inflation impact in that market.
We have 2 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 the last 3 months. And that's what our approach would be. We'll just wait and watch and try and maximize the potential of our existing stores that we have there.
Devanshu Bansal:
Thanks, Rahul. All the best to your team for this continued strong momentum in FY'27 as well.
Moderator:
Thank you. Next question comes from the line of Rushabh Sharedalal with Pravin Ratilal Wealth. Please go ahead.
Rushabh Sharedalal:
Rahul, congratulations on a great set of numbers. It's been a fantastic performance. Just one question on the premium CDR segment. In Q4, we added 4 stores in the CDR segment, but our margins have literally collapsed versus Q3, especially considering the fact that more than 1 year old stores have delivered 7% SSSG. What explains this margin collapse?
Rahul Agrawal:
It's entirely new restaurants. If you're comparing this with Q3 versus Q4, Q3 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. And you will see this impact across all our business segments. Q3 and Q4 is not entirely comparable even when you look at 4 stores added in Q3 as opposed to added in Q4.
The second impact also is that in Q3, the stores pretty much came around November. December is when we don't plan to launch any new restaurants because it gets very difficult operationally to also manage the demand in the stores. In Q4, obviously, it's a different sort of base. And some of the new stores that we opened in Q4 also had impact of onetime initial setup cost, onetime liquor costs, all sort of baked into the Q4 financials.
I wouldn't say this has collapsed. I think I'm looking at this very objectively between 2 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 markets, but in newer markets of Bombay and Delhi, which is not a home market and will take some time to build up.
We are seeing month-on-month improvement in our operating margins there. But this is a place where the team will focus the most in the current financial year, and will bring it back so that we start getting mature margin in this new store portfolio also.
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Rushabh Sharedalal:
Right. Is it fair to assume that all the new restaurants, they are in premium areas, and the rents are slightly higher, one of the reasons. Is it fair to assume?
Rahul Agrawal:
That's true for the entire segment. All 42 restaurants are in premium areas and rent is slightly higher, if you compare with Barbeque restaurants.
Rushabh Sharedalal:
Okay. Rahul, my second question is on the store additions that we are doing. The gap we are looking to accelerate store additions in a meaningful way. It's almost -- over the next 3 years, we are reaching almost 400-plus stores, right? So, the last time that we did that, it really hasn't worked out well and we had to shut many stores. What learnings from them give you the confidence that we will not face a similar situation again? And follow-up to that, can we expect that the baseline restaurant operating margin in Barbeque is maintained in absolute despite these additions?
Rahul Agrawal:
We're only targeting to add 40 on a base of 262, which is approximately 15%-odd. This year, we have added 35 new restaurants on a base of around 230, which again is approximately 15%-odd. We're 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 3 years, we are again only talking about 40 to 45 Stores. We have done it in the past. Yes, in FY23, 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 the last 3 quarters, we have an operating model in place in some of the Tier 2, Tier 3 markets also now. And frankly, in hindsight, if these initiatives that we took now would have taken at that time, maybe we would not have shut another 5, 6 restaurants. But this is also a factor of market, some of the efforts that we have 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 saw stress in any of our business segments. We have seen those multiple times in our 20-year journey, and we have come out of it very strongly. I think we're in that phase now. And the store expansion target to, in my mind, is not at all aggressive. It is very moderate; 15% expansion is not a large number.
We have always said that we would build ourselves to open 8 to 12 restaurants every quarter. Last quarter, we added 14, previous quarter, we added around 8. It also depends on the life cycle of a new restaurant coming up is slightly larger. I think 40 is something which is comfortably doable and it's not putting stress in the entire system. I think more importantly, I think there's a lot of opportunities in this country where we can scale this brand to a much larger scale.
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Rushabh Sharedalal:
Right. My last question is a clarification that you said in your opening remarks and to a couple of answers that you gave. What you said was that the 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 high double to 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?
Rahul Agrawal:
We are looking at around double digits SSSG in FY'27 overall with around 9% to 10% overall pre-Ind AS restaurant EBITDA margin.
Moderator:
Next question comes from the line of Pritesh Chheda with Lucky.
Pritesh Chheda:
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. So, what 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 and that margin bridge which you are building is for the full year and not as an exit for FY'27? So, when you're referring to 9% or 10% pre-Ind AS margin, is a number for full year and not an exit number?
Rahul Agrawal:
Yes.
Pritesh Chheda:
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?
Rahul Agrawal:
H1 was approximately 3%, H2 was approximately 8% and next year, we wish to continue on our momentum of H2 and expect it to be 9% to 10%.
Pritesh Chheda:
Okay. If you could tell us in this 400-bps expansion. And when you look at your Q4 margin bridge, so you have a Q4 margin bridge, which you have put in the presentation, which talks about 60 bps margin expansion based on price discount plus marketing expense increase and operating leverage increase. We had a margin bridge of 60 bps. I'm unable to understand that margin bridge versus the full year margin now that you're trying to plot for next year?
Rahul Agrawal:
On a full year basis, we are expecting around 17% to 18% mature restaurant operating margin.
Pritesh Chheda:
Can I just ask you itself? You have a business model, which is seasonal in nature, right, where your Q4 number -- sorry, Q3 is the highest number. You have those lean seasons and peak seasons, right? So you have -- so I hope that lean season, peak season phenomena is factored when you're calling out a 9% to 10% full year number.
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Rahul Agrawal:
Correct.
Pritesh Chheda:
Correct. Okay. That was my clarification, Rahul. Can you just extend this conversation to maybe a year later? So, let's say, if we look at FY'28, how should your business model further look like if this conversation is extended on growth and margin in FY'28?
Rahul Agrawal:
The overall bridge is actually very simple. It starts with mature restaurant operating margin, and that is a number that we should look at more closely. I think we are guiding to around 17% to 18% in FY'27 depending on some of the initiatives that we took on the gross margin side or 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 sites that we open up. And that, in my view, will be in the range of between 1.2% to 1.8%, depending on how many new sites we opened up in last 12 months. This will give us consolidated ROM. And the second is back-end cost. I think on the back-end 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% FY'27 and thereafter, inch it up higher.
Moderator:
Next question comes from the line of Keshav Parwal with Xponentia Capital.
Keshav Parwal:
First of all, congratulations for the great set of results. My question is towards the AOV, especially for Barbeque India segment. So how is the Average Order Value or the Average Per Person cost for the Barbeque India customer has trended over the years?
Rahul Agrawal:
We don't call out specific numbers. But as you can see the overall dine-in or 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 changes 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 dayparts, which by design is at lower APC. So, 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 2 more quarters. And after that, it will automatically settle down.
Keshav Parwal:
Okay. So, it's fair to assume that the new levels will be slightly lower than the earlier levels that we have seen historically.
Rahul Agrawal:
No. It will be similar to what we saw in the previous two quarters.
Moderator:
The next question comes from the line of Dhwanil Desai with Turtle Capital.
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Dhwanil Desai:
Congratulations for very good repositioning and very good numbers. First question, once we have changed a large part of our growth is led by volumes. And we have always maintained that per restaurant revenue of INR6 crores to INR7 crores with certain kind of cover fees and certain volume.
Now when the volume goes up significantly and because of the changes that you have made in the daypart 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 this fashion. So how should we think about it beyond FY'27 with this model, is that number materially changing?
Rahul Agrawal:
Look, we have to appreciate the power of value-driving offers in this country. A lot of other models we have seen also working extremely well when volume-driven strategy works for those businesses. We have seen this accelerating between Q1 and Q4. We're also seeing the momentum continuing in Q1 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.
And more importantly, while we spoke a lot about value offers, we also appreciate that a lot of work has 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 an 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 a better view on how the full year is also trending. And if there's any change in our internal targets that we have 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 the last 2 quarters.
Dhwanil Desai:
Right. No, my clarification, Rahul, is that in INR7 - INR7.5 crores at peak utilization number, is that intact? Or will it change because the volume cover equation has changed now? So that's the question, right? Because that is a finite number of volumes that we can handle in a session.
Rahul Agrawal:
No, that's not the problem. Look, technically, we have 4 sessions that we can do in any single day. We can do 2 of lunch and 2 of dinner. Let's assume we have 100 seats in a restaurant. Technically, we can do 400 seats every day, which on a 30-day basis is 12,000
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
covers in a month and which at a price point of, let's say, even at a price point of INR750, we're talking about INR9 crores.
So, we do this number of 4 table turns in large parts of our restaurants on peak days like 31st December or 1st January. So, if volume keeps coming, if demand keeps coming, I don't think we have a supply constrained problem. And even if we have, for us, adding another restaurant in the similar trade area at a distance of 5 to 7 kilometers is also a very good possibility.
And we keep doing that. When we do expansion, we keep taking this into account 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 kilometers apart. I don't know if that's the question that you had.
Dhwanil Desai:
Yes. No, I think that's a question. I think you answered it well.
Moderator:
Next question comes from the line of Aman Vij with Astute Investment Management.
Aman Vij:
First, a clarification and then 2 questions. On the Salt and Toscano side, how what is the store addition we are planning for FY'27 and FY'28?
Rahul Agrawal:
FY'27, our internal aim is around 5 restaurants. I think FY'28, this can be anywhere between 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'll add 5. And maybe after 2 - 3 quarters, we will be able to further crystallize on FY'28, but my current range is around 5 to 10.
Aman Vij:
And the peak revenue per store, like you explained for Barbeque is, say, roughly INR8 - INR9 crores. What should we assume the number for these stores, Salt and Toscano individually?
Rahul Agrawal:
The peak restaurant in Salt and Toscano does around INR11 to INR12 crores. Barbeque numbers peak also is at around INR12 to INR13 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 3 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 do it also. We don't have a peak sort of problem.
Aman Vij:
Sure. My second and final question is the strategy which you deployed in the last 6 to 9 months, where you focus more on weekend lunch and even weekdays. Could you give some quantitative number 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?
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Rahul Agrawal:
The overall growth number is around 47%, Aman, between last year and this year, on dine-in side, this is broadly what will give you a sense of how the walk-ins have moved. And even on weekends, there are some sessions, I explained earlier, there are 4 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.
We exactly understand which guest or which customer is coming on which platform, is it on our call center, is it on our app or website. And depending upon the reservations in the existing restaurants or in that slot, the call center or the app would sort of tweak some offers or campaigns to ensure that the conversion grows higher.
I think a lot of these digital initiatives have also happened just to ensure that whatever campaigns that we run for our guests are actually reach the guests 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 Q3. And that structural momentum in the business is what I see working on a day-to-day basis. And that is why I believe that that's a new base for us now.
Aman Vij:
Just a clarification, the dine-in volume growth for FY'27, what do you see this number to be?
Rahul Agrawal:
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. And also in the second half, given that the momentum buildup is 8% and 14% in the first and second quarters.
We'll keep doing our work, and we'll keep coming back to you as the numbers sort of come in. 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 advantage. So, we'll just build up on that, Aman.
Moderator:
Next question comes from the line of Suryansh with Xponentia.
Suryansh:
No, my question was answered. Congrats, Rahul, congrats Amit, great set of numbers.
Moderator:
Next question comes from the line of Jatin, an Individual Investor.
Jatin:
Congrats, sir, for the great numbers. I have one quick question or rather 2. Basically, I was just analyzing the presentation that you have given on the Investor website, and I was checking the Barbeque International and premium CDR SSSG numbers. They are
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
comparatively low to our Barbeque chain. So, can you give some steps, which we are taking to increase it? And what this number can be during FY'27? And 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 FY'27. So can you -- just wanted to understand your thoughts on this also.
Rahul Agrawal:
On SSSG in the other 2 platforms, I think the international business is also operating in a slightly difficult macro environment. And despite that, the Company is delivering mid-single-digit numbers, it's very commendable. I think the team there is doing a great job, and they have also sustained SSSG over a longer period of time. Over a period of last 5 years, the SSSG has been compounding. And the average revenue per store is approximately INR12 to INR13 crores, which is a very good number.
I think we'll strive to maintain this balance and be at around mid-single-digit number. 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 restaurant margins, which have slightly compressed now, is what we'll try and ramp it up to the mature portfolio level. Sorry, Jatin, I missed the second part of your question on growth. Can you please repeat that?
Jatin:
Sure. So basically, coming back on the first question. So basically, what would be a blended SSSG for the premium CDR and BBQ International that we can expect for FY'27?
Rahul Agrawal:
On a blended basis, our internal aim is to be at early double-digit numbers.
Jatin:
Okay. That is great. Sir, my second question was like we were in the last conference call, Q3 conference call, we were saying that we are expecting around 25% revenue growth in the coming next quarters, so like Q1, Q2, Q3 and then Q4. So just wanted to understand your thoughts on this, which we mentioned in the last conference call.
Rahul Agrawal:
In the current quarter, we have delivered 23%. Also, the growth is a function of 2 very important factors. One is same-store sales growth and the new expansion. And on both the attributes, I think we are in a very strong footing. And we will just continue to work on these parameters and try and achieve the aim that we have internally.
Jatin:
Okay, sir. Thank you. Thank you and all the best for your all the efforts that you are putting in.
United Foodbrands Limited
United Foodbrands Limited
Earnings Call Transcript
Q4 and Full Year FY2026
United Foodbrands
Moderator:
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I now hand the conference over to Omkar Bagwe from MUFG Intime for closing comments.
Omkar Bagwe:
Thank you, everyone, for joining us on the call today. We are MUFG Intime, Investor Relations Advisors to United Foodbrands Limited. In case of any queries, please feel free to reach out to us. Thank you.
Moderator:
Thank you. On behalf of United Foodbrands Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
Note: This transcript has been edited to improve readability and is not a verbatim record of the proceedings.
For further information, please contact
Bijay Sharma
Head of Investor Relations
United Foodbrands Limited
(Formerly known as Barbeque-Nation Hospitality Limited)
+91 080 6902 8721
[email protected]
Registered & Corporate Office:
United Foodbrands Limited
(Formerly known as Barbeque-Nation Hospitality Limited)
“Saket Callipolis”, Unit No. 601 & 602, 6th Floor, Doddakannalli Village,
Varthur Hobli, Sarjapur Road, Bengaluru - 560035, Karnataka, India
CIN: L55101KA2006PLC073031
Website: www.unitedfoodbrands.in
Cautionary Statement: This release contains statements that contain "forward looking statements" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to United Foodbrands' future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. The Company undertakes no obligation to publicly revise any forward-looking statements to reflect future / likely events or circumstances.
United Foodbrands Limited