Ladies and gentlemen, good day, and welcome to the Restaurant Brands Asia Q1 FY 2024 Conference Call, hosted by Nuvama Wealth Management. 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. Nihal Jham from Nuvama Wealth Management. Thank you, and over to you, sir. Yes, thanks, Ikko. On behalf of Nuvama Institutional Equities, I would like to welcome you all to the Q1 FY 2024 result earning call for Restaurant Brands Asia. From the management today, we have Mr. Rajeev Varman, Whole-Time Director and Group CEO, Mr. Sandeep Dey, Brand President, Indonesia, Mr. Sumit Zaveri, Group CFO and Chief Business Officer, Mr. Kapil Grover, Chief Marketing Officer, and Mr. Prashant Desai, Head of Strategy and IR. I would now like to hand over the call to Mr. Rajeev Varman. Over to you, Raj. Thank you. Thank you, Nihal, and thanks, everyone. Appreciate your interest in our company, and thanks for joining on this Tuesday call. What I'm gonna do is I'm gonna give you a quick, you know, roundup on our, you know, journey forward, both here in India and Indonesia. Then I will hand it over to Sumit, who will then carry you through the numbers for both the countries and the consolidated P&L as well. Then we will go into each country, India and then Indonesia. First, Kapil Grover will give you the marketing strategy here, here in India, and then Sandeep Dey will give you the strategy up in Indonesia. Finally, we will go back and open up for questions. With that said, just a little bit, you know, in the past, you've heard me speak about, you know, the India strategy, which is to continue to drive value. You know, we started with value many years ago when we had the two for offer. People might still remember the two for INR 50 offer that we had. Subsequent to those offer, we went to our Stunner menu, which, you know, you saw the groundbreaking, you know, advertisement that we did, which was, you know, applauded all across the world, with Hrithik Roshan. The next chapter, 2.0, on, on the value strategy is, is what we have on, you know, running right now, which is the INR 99 menu, which is doing extremely well. Actually, has driven a lot of traffic into our restaurants, you know, high 7% kind of traffic in dine-in, and so will Sumit. This value platform is integral part of our strategy in both Indonesia and India. Here in India, we continue to strengthen that, and we will, you know, from time to time, you know, upgrade and improve those strategies. The intention is to make sure we have a ground, good, stable strategy on, on, on, value. We came up with cafes, right? We, we built, you know, 240 cafes last year to prop it up to 275 cafes, and now we are sitting at about 280-plus cafes in India. Also very happy today to report to you that yesterday, we completed opening of 400 restaurants in India. Congratulations to Cicely Thomas, the development team, the construction team, Samir Devi, and the entire construction team for doing a fantastic job, and all the operations people for opening all these 400 restaurants. We continue our journey this year to go to 450 restaurants. Cafes being an integral part of, you know, our business. Now, moving forward, all restaurants open with cafes, you know, on a standard basis. That's, that's one thing that, you know, we have already installed, and we are working and, and we continue to grow the ADS on that. If you look at the last quarter, we kinda climbed up the ADS from the previous year, that we ended up by another 1,000, you know, to INR 50, at about upwards of INR 15,000. That ADS continues to climb, and, you know, roughly about half of that is incremental, so it's like a, you know, incremental sales coming into the system. Also we spoke about, you know, introduction of, you know, the premium menu, King's Collection. We spoke about, you know, the wraps and so forth, Kapil will talk to you about that. Moving forward, as we go into this balance of this year and into the next two, three years, we are going to be expanding our total consumer base by including families and kids. You will start to hear from, first hear today from Kapil, and then you will hear about this more in subsequent quarters. You will find that expansion to continue our journey to climb from our existing ADAs towards our target in, in, in the future. The final thing is the Whopper leadership, which is, you know, something that we have invested a lot of both money and time in building a fantastic product. You will find, you know, in the next quarter or so, you will find also news on, on how we're gonna go forward with the Whopper. So having a premium layer, having the Whopper layer, having the value layer, and having the cafe, all these things are in place for India. Now what the work is, is a single laser focus for the balance of this year in India to increase top-line sales and to increase the four-wall EBITDA. The team in India has put over the last, I would say, 24 months. All these, you know, basics modules in place, whether it's the value strategy, the premium strategy, the Whopper strategy, the Café strategy, all these have been completed and rolled out. Training has been completed, and now the focus will be a laser on top-line revenues and on four-wall EBITDA. You'll hear a lot about that from, from Kapil as we move into his presentation. Now, on the growth side, you know, there's, and, you know, similarly, some people speak on the Indonesia side. Indonesia has been a fantastic, and last, we've been speaking about Indonesia, about, you know, rolling out of value, rolling out of the new products, rolling out of the chicken menu. You know, we used to have only one chicken handheld, whereas that's a country which has a classic and a spicy. We introduced the spicy version. We rectified a lot of our products, which we tested, and all that was done last year. As we were doing that, we went up in SSSG of 1.7% last year. This last quarter, we further improved that by going up 5.5% SSSG, which is all driven by, you know, almost 10% of traffic in the dine-in. And Sandeep will talk more to that, but also there's, there's a very clear strategy in Indonesia now to move that business to a positive, yeah, in this year, to break even and then grow past that in, in, in the, in this coming year. Now, on the growth side, you know, one of the things that we are doing in India is obviously a journey towards 700. We are at 400. We have crossed the midway mark, and we continue to kind of march forward towards, you know, getting that 700 by December of 2026. On the Indonesia side, we have, we have two brands there. We have Popeyes and we have Burger King Indonesia. The Burger King Indonesia, we are rationalizing that. You will see that we have closed a few restaurants, and we'll close a few more, very few more restaurants, rationalize that. These are poor restaurants or, you know, in malls that died after COVID or some event that happened that kind of put compromised the location of those restaurants. You will see that that rationalization will be complete in the next little over the next quarter. Then, you know, the Popeyes story, which is we continue to build restaurants. We have got 11 restaurants, 10 up as of last quarter, and then we opened one just in the last few days. This journey will continue to get to 25 restaurants by December of this year. That growth journey continues, and you will hear more from Sandeep on that. Finally, you know, we are going to go into a digital phase two. While we have fixed the product side, we fixed all those things in Indonesia and India. We already had a winning menu, so we continue that journey. We are going to step up what we're gonna do. We are already doing this, by the way, in Popeyes, and we are now going to install this in India, Burger King, as well as Burger Kings in Indonesia, which is two-fold. We call it Digital 2.0, with one, ordering kiosks in all locations, and you'll hear that from Kapil as well. Table ordering, that's something Cecily Thomas, our President in Burger King India, is rolling out. Then 100%, you know, known, known guests, which I think Kapil will address in his speech. This is the way forward, right? Top line growth in India, four-wall EBITDA in India, rationalize the portfolio of Burger King Indonesia, get to break even in Indonesia, continue the journey of Popeyes. By the way, the Popeyes restaurants are doing 2x the sales of the Burger King restaurants over there. These are very high double-digit, four-wall EBITDA. We have really cracked that menu well. We are starting to build that, those restaurants. Can you imagine when we get to 25 restaurants, it will be equivalent to 50 Burger King restaurants? Great job to Sandeep and his entire team over there, launching a great brand over there and doing a good job launching it, and the fruits of that are starting to roll in. With that said, I'm going to turn it over to Sumit Zaveri. Sumit will carry you through the numbers for the quarter, and then he'll hand it over to Kapil. Over to you, Sumit. Thank, thank you, Raj, for the initial perspective today, this time. I will take some time to just explain and take you through how we performed as far as the financial matrix is concerned. Firstly, starting with the revenue, which is literally the key driver for in terms of our business and profitability. We moved from INR 365 crores in quarter four last year to INR 422 crores in the current quarter in India. I'm first covering India standalone financials and then subsequently go into Indonesia part once I've covered the perspective on India. There is an overall growth of 16%. Raj initially mentioned that, you know, we have very clear, sharp focus on our value strategy. The perspective of getting into value strategy was to very clearly drive in traffic, and there also dovetailing back into what we really meant by driving traffic. We literally also wanted to make sure that the traffic that we are driving is on the dine-in part of the business. really looking at how we performed on that part of the strategy, our SSSG at an overall business level was at 3.6%. I'm really happy to mention the results, which we have a back of, growth in dine-in traffic. Our dine-in traffic, SSPG, as we call it out, or same-store transaction growth, was at in excess of 10% for Q1. We, we really kind of remained sharp on our strategy to grow traffic and revenue through dine-in, and that is what we've been able to kind of achieve. That gave us an improvement in ADS Four to 120 in Q1, a substantial increase of 11%. Coming back on to growth, as Raj mentioned, growth has been one of our key pillars. We have now reached 400 stores as we speak. We remain focused to get to 450 by end of this financial year, and the target of 700 by December 2026, 15 years to be one of the key milestones as far as growth is concerned. While we remained really strong at value strategy, our key was and key focus was that we should not, and we should make sure that we continue to also simultaneously remain stable or move in positive direction on gross profits. Very clearly, there is no reason internally for us that we said that, okay, because we go strong on value, does not mean that we can actually take a shortcut on the margin side, and we continue to remain strong at 66.5%. For the quarter, we strongly believe that this number is a stable state and only move in the positive directions as we go along. Coming on to store EBITDA, and I just want to kind of hop back and just kind of put saying that why did we put this kind of marketing expenses part of our performance results? We felt that, you know, as if you really look at it from the perspective of commitment that we have towards system, on an annual basis, we spend 5% of our revenue. Obviously, a lot of people understand that in business, it is not easy to spread out marketing spend. We would rather spend the money where we feel we will have maximum impact. Generally, we've always been spending higher on marketing in quarter one, and then, and then it gets, it kind of averages out at 5% for the full year. In order to make the quarters comparable, we put that number of marketing spend that we have done on, in the past year, quarter one, previous quarter and this year. If you really look at it from the perspective of a stable state marketing, which is there, which really the year would go down to, we have in current quarter delivered 9.8% on store EBITDA level, which if compared to quarter four, adjusted for marketing, would have been 7.3%, which is very clearly an improvement of 2.5% on a store EBITDA level. On a company EBITDA level, if we were to adjust for marketing, we would should be at 4.2%, as compared to 0.6% in the previous quarter. This is coupled with two things. One is a shift in the marketing cost or baselining the marketing cost. At the same time, as the revenues have grown, we've also seen the baselining of or the leverage effect of the corporate costs by almost 1 percent point over the previous quarter. Looking at, and I'm on slide six, looking at the overall numbers, as I mentioned, revenue of INR 422 crore. At the store level, we had been talking, saying that we have brought efficiencies on the labor line side, and we are at 10.1% as compared to 11.1% over last quarter, and we continue to kind of make sure that we build efficiencies on different lines of costs as we go along. On the corporate cost side, as I mentioned, you know, we have remained at a stable state of INR 24 crore. This is, as we internally target, this is likely the cost at which, in around these levels of cost at which we will remain on corporate costs, on a quarter-on-quarter basis over next quarter, as we report our numbers for the year going forward. All in all, we feel that it was a good quarter with a company level EBITDA of INR 10 crore. Adjusted for marketing, incremental marketing spend that we did in Q1, we effectively we could achieve on what we call it as a stable state at these levels of ADAs of close to around INR 18 crore at the company level EBITDA. A substantial shift from what we had seen in Q4 of at INR 533. Going into Indonesia, you know, this is something which is what we strongly feel and believe is that this is the beginning of the journey on the positive side, as far as Indonesia is concerned. If you really look at it from the perspective of average daily sales, which is literally the key driver for us to be able to take the business towards its journey to profitability. We moved ADAs from last year, 17.6 to 19.4, almost 10% increase in its overall ADAs, with an SSG of 5.5%. This is a strong positive SSG that we grew. There are no seasonality variations, so these are literally like-to-like quarters very clearly. At the same time, we continue to look at our portfolio of stores in a very hard manner, and wherever we feel that we need to rationalize the stores, we, we rationalize. We will continue to look at this. Coupled with rationalization of stores and SSG, we've been able to move the overall ADAs from 17.6 to 19.4. We will continue to build onto this sales. Sandeep, in his part, will certainly cover why we feel confident of this baseline number and what will be our path to grow from here. As far as Popeyes is concerned, we are at 10 stores. Our journey is to get to 25 by end of the year. We, we remain focused in terms of making sure that this PDSs continue to remain on a higher side. We are currently at 40 million EDS. This seems to be a strong 40 million for us. Margins, gross profit margins on this brand is something which has been one of the big positives for us, and we will continue to build and grow from there. If we going on to slide number 9, if we really look at it from the perspective of quarter one performance for Indonesia, we did a revenue of INR 189 crore, as compared to INR 150 crore last year, last year or previous quarter, very similar numbers. As a company, at the top level, we are at INR 12.5 crore loss. Just similar to like the way we, we invest ahead, at the start of the year on marketing side, we've done it, done similar investments in Indonesia as well. Uh, in the current quarter, our investments in marketing for Indonesia stood at seven point seven percent, which is two point seven percent ahead of what our annual plan is. Uh, if we really adjust for that, uh, then the loss, uh, at the company EBITDA level, uh, would reduce down to around seven odd crores. Uh, we had very, uh... At the beginning, when we started the year, we had very clearly laid out, uh, that we are working towards reaching to profitability in Indonesia. That's our very sharp, clear focus for the year. We strongly feel that the performance in quarter one, we strongly feel that we are on that path to be able to get to, uh, achieve the profitability for the financial year of the five twenty-four as we go along. With that, just a quick, on the consolidated performance, between the two countries. We are at INR 610 crores of revenue, up from INR 514 crores over last year. A marginal company-level EBITDA loss of INR 2 crores. As I explained, some parts of it is on account of investments, higher investments that we did in India. On the marketing side, which was around close to INR 8 crores, and incremental marketing spend that we did in Indonesia, which was around INR 5 crores. If you really adjust for, for the money that we invested ahead of the curve, at a company EBITDA level as well, we are standing positive, or we feel confident of the numbers that we want to achieve going forward. With that, now I will hand it over to Kapil, who will take us through the initiatives that we have on the marketing side of things. Over to you, Kapil. Thanks, Sumit. Good morning, everyone. As you heard, Raj and Sumit share quarter one results, where we've seen about 3.5% SSAG, which is on the back of system sales of 25% and 91 new store openings. I just want to reiterate how the team has stayed focused on the key strategic pillars. Now, on slide number 12, number one is our ambition to be the value leader in the market, and we continue to offer our guests great value for money and drive additional footfalls in our restaurants. Value is not just about tactical promotions, it's a constant endeavor to offer food, experience and service that is really worth it. I will share how the 99 meals promotion helped us drive strong dine-in traffic growth this quarter. The second pillar is our endeavor to offer differentiated products. On our core menu, we have the flagship product, Whopper, and I will also share how we continue to build the premium end of the menu, King's Collection, over time. BK Cafe is a new incremental layer that we've now added to 286 stores, and this will continue to grow over the long term as a strong innovation and a very profitable menu. The third pillar on the district side, we have committed to significantly improve our guest experience and offer them even more convenient ways of accessing Burger King at store or at the convenience of their homes. Last but not least, we continue to build a strong brand with the Gen Z, which will relate very strongly with our audience. Moving to slide number 13, our key initiative this quarter was the launch of Tasty Meals Promotion, starting at INR 99, available in dine-in and takeaway. This menu is an extension of the summer menu, whereby we improvised the proposition by offering a complete meal around our winning summer products, like Crispy Range, the Makhani Range, and the Crunchy Tacos. In April, we rolled out a complete 360 program around 99 meals, with television, digital media, out-of-home branding, and mall sandwiches wherever we have stores. We also leveraged the cricket season with a moment marketing campaign, which is very engaging. As a result, this campaign helped us drive incremental dine-in traffic growth, same-store traffic growth of over 10% in this quarter, which is a very strong sign of how we progress on this business in the future quarters. Slide 14 talks about the launch of the new innovation on our menu. We strengthened the King's Collection portfolio by adding premium wraps to our menu. Now, this is a loaded wrap with a soft paneer patty or a crispy fiery chicken patty, along with fresh salads and very delicious sauces, and it offers a great meal solution on the go. Now, this is based on consumer insights that wraps and rolls, whether you look at the kathi rolls in the north or the frankies in the west or the Calcutta rolls, it's a demand for a filling, satiating product of this format. This product got added to our menu last quarter, and we continue to build the premium end. In addition to that, we continue to build Whopper franchise by offering new taste experiences every quarter. Last quarter was the Twisted Whopper-... which was our limited time offering, is there allows us to, you know, build with the walk of fans. They come back and they can try a new variant every time. It helps us to build frequency over time. Slide 15 talks about the cafe menu. Cafe, we continue to build awareness through very innovative use of social media, influencer marketing, and a lot of focus on driving at store awareness and trial captions. This has helped us drive incremental revenues of INR 8,000 through the cafe menu across 286 operating stores. Well, Rajeev mentioned about, you know, almost INR 15,500 total cafe areas. Of that, 50% is almost incremental. This cafe business, in the long term, as we grow awareness and trials, will help us build new occasions in between meal day parts and build a new line of business over time. Moving on to digital experiences that I mentioned in the beginning, you will see that Burger King stores will now offer three new experiences to our guests. The Burger King app continues to grow and offer consumers a very convenient way of ordering dine-in or delivery. We have now started to improve our loyalty program, the Crown Rewards, and you will see more progress in that in the coming time. This will help us drive more frequency with our guests. The self-ordering kiosk is a new interface, which will, you know, the new guests are adopting this interface very rapidly. It allows them to explore the menu, pay and order via a very seamless digital experience. You couple that with the new initiatives that we're testing on table service. Effectively, as we scale this up, the guests can walk into a Burger King store, use the Burger King app or the kiosk or the QR codes that are placed on the tables, right? They can select their favorite menu item, avail very exclusive offers on the BK app or Crown Rewards, and get their food served on the table. This will become a very sort of elevated experience for our Burger King guests. On slide 17, I shared a few examples of how we continue to build a very engaging brand through social media, a lot of innovative content, and we continue to build brand love with Gen Z. The effort has been recognized on Indian and global platforms. The summer campaign won a silver at the New York Neo Awards, and also got shortlisted at the Cannes Award as one of the top 10 campaigns in the world for most effective use of influencers. At this point, I'll hand over to Sandeep to talk you through the Indonesia business update. Thank you, Kapil, and a very, very good morning to all of you from Indonesia. You heard both Raj as well as Sumit talking about the overall business performance for the Indonesia market and the progress we have made in the last quarter. What I'm going to do in the next few minutes is share with you some of the work we are doing to move our key strategic growth pillars forward. First things first, let me reiterate that for the Indonesia market, our single-minded objective continues to be building back a profitable company. In order to deliver that, we will continue to focus on three of our strategic pillars. Number one, it is an extremely strong chicken market, and one of our key strategies is to build our credibility in chicken. Second, we will continue to establish leadership in burgers. Third, we are building a comprehensive dessert menu, which will help us drive incremental locations and, over a long period of time, incremental traffic. I'm going to talk about each of these three pillars in a bit. Most importantly, the bedrock for all these strategies are having a very solid foundation with regard to operational excellence, products, people, capability, processes, and thereby ensuring that we provide best-in-class guest experience every single time. We will always continue to provide a very strong value propositions to all our guests across the entire menu layers. I'm going to talk about each of the strategic pillars. First, let me talk about the chicken. See, Indonesia as a market is where the staple food is fried chicken and rice, and we have identified a gap in our menu both with regard to taste as well as the variety. The team did a fantastic work. They worked very hard, improved the quality and taste of the classic chicken, and also developed a spicy variant. Now, both these variants, by the way, we did a detailed research with guests, and both these products performed extremely well in consumer research. After that was understood, we launched these products in the last quarter and offered a very aggressive trial price of INR 25,000 for a meal. Okay, just to give you a context, the normal price for such meals in any other quick service restaurant are typically in the range of INR 35,000-36,000. We supported that launch with a very comprehensive 360-degree marketing campaign, and we are quite encouraged to see the initial results. In fact, the biggest indicator is that the incidence of chicken improved by 25% odd. Of course, helping us increase in both sales as well as traffic. I'm moving to the next slide, which is slide number 22. Our next strategic priority is to build burger leadership. We have to build that through taste credibility, build that through flavor innovation, and also offer strong value propositions across the entire menu layer. We have built a robust menu architecture, offering great-tasting burgers across all the price bands. It starts at a 29,000 for a burger meal. By the way, these ideas, I'll just give you some numbers so that we can understand from the INR perspective. 29,000 for a meal corresponds to around INR 155. We call this, you know, branded value layer as Kinging. We also have offerings at a price gap of every INR 10,000, which is every INR 50-INR 55, and going all the way up to INR 79,000 for a gold collection meal, which is our premium layer. These burgers are pure taste indulgence and, at the same time, quite affordable pricing. Now our strategy is to promote these products and generate trials across all these layers. We have created some aggressive offers like, you know, 2 for INR 39, which by the way, include the junior whopper as well, where a guest can enjoy a very deep discount, almost to the tune of about 45%. We also have a bunch of other aggressive offers, and now we are promoting them through social, through digital, through coupons. Now, moving to the third pillar, which is the dessert pillar. Now, dessert is a very big business opportunity in this market. A couple of quarters back, when we launched a branded dessert partnering with Nestlé, a Kit Kat Fusion, we got some fantastic results. Our volumes of dessert went up almost 3 times, and the incidence grew almost about 10%. Based on that learning, we are building a pipeline of branded desserts in partnership with both local as well as global partners, and at the same time generating trials for these indulgent desserts through a very aggressive pricing. The final objective is to drive incremental locations and in the long term, drive incremental traffic. Now I'm moving on to slide 24, which is my last slide, and I'm talking, I'm going to talk about Popeyes. The Popeyes brand we launched in last December, and it's been over seven months, and we continue to drive reasonably high sales and a very, very profitable overall EBITDA. Go forward, our focus is to build on three strategic pillars. Number one, our number one priority is to make sure that we continue to deliver blockbuster new store openings. Now, you know, we have a lot of global best practices across multiple markets, and we have our own learnings from the previous successful launches. Based on all those learnings, we have built what we call it as a new store launch playbook. We plan to follow that playbook for all our new store openings to ensure that every single launch is a successful one. Our plan is to open 25 stores by the end of this year. Last July, I mean, the last month, we opened 1 store. Our store count is at 11. We have another five stores under construction and almost about 10-12 stores, which are at various stages of pre-construction and lease signing. We have a robust pipeline to ensure that we build about 25 stores of Popeyes this year. The second pillar is to build this brand into a chicken destination. See, we are basically a culinary brand, and we are not only winning products to give out to taste, but at the same time, an enormous amount of variety of products to address different occasions. Our priority now is to generate trials for all our iconic products. We are taking 1 product at a time and running campaign with attractive offers to generate trials. The intent is to get our guests to try all our iconic products and then eventually find their own personal favorite. Over a period of time, they will become loyalists of our products and eventually the brand. The third pillar, Raj spoke about it, the Digital 2.0. Our third pillar is to build a brand with digital-first experience. All our restaurants, by the way, have kiosks. Every restaurant has video walls, which run, you know, brand content, product content, and all our drive-through menu boards are digital menu board. Our long-term ambition continues to have 100% known diner seats, right? We are moving quite positively in that direction. At this moment, almost 37% of our dine-in sales is done through kiosk, and each of those sales actually comes at almost 18%-20% higher check. Our near-term plan is to take that number from 37 to close to 60-65. That is all from my side about the Indonesia business, and now I hand it over to Prashant to share the overall outlook for our business. Thanks, Sandeep. Friends, there is no major change in the outlook that, you know, we had presented last time around. I'll just reiterate that we remain committed to delivering the 10% plus same-store growth in the current year, taking gross margins to 67% this year and to about 69% over the next 2 more further years. In Indonesia, as we had guided, we remain committed to delivering a cash breakeven, maybe a little bit profit this year, and to open about 325 restaurants between Burger King and Popeyes over the next 4 years' time. With that, I open up the floor for Q&A. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Sir, hi, thanks for the opportunity. I just wanted to understand the gross margin performance better. Despite this launch of value offer at INR 99, we have been able to sort of maintain our gross margin. Just wanted to understand how we have been able to achieve that, is there any sort of price hike that we have taken for the rest of the portfolio? Yeah. Thank you for your question. We haven't taken any price hike. In fact, as you can see, we are on national TV and across the entire country talking about INR 99. That's our strategy on the marketing side. You're absolutely right, we have maintained a gross margin. There's a couple of things. As you would have known from our presentation, that we continue to grow our cafe business, right? We have grown that business, and that comes at a higher margin, and we continue to kind of use that to make sure that we're moving in that journey. There are a lot of, you know, programs that are in place- ... within the supply chain department, whether it is from procurement, whether it's on rate, decrease on, you know, delivery or transportation, or whether it is on the, you know, the ingredients itself. Multiple buying, we continue to do that, by introducing newer and, our, supplier base, we continue to grow that. The second thing is we also, you know, continue to make sure that our patties and so forth are efficiently delivered. Now, as we, we have moved from, you know, 300 restaurants to 400 restaurants, those synergies are also playing in, right? Because each distribution center is now not delivering, you know, five or 10 restaurants, maybe delivering 15 or 20 restaurants. So we save a lot of that as we amortize the primary costs into all those restaurants. You will continue to see this, this, you know, either stabilize or continue to move in the, in the north direction. Our objective, as we have outlined, is to, to move this to about 67% this year, and then we're kind of fully confident that that's where we're gonna go. Just to add to what Raj mentioned earlier, it's question: Had the 99 offer not been there, we believe we would have delivered a further 100% increase in, in gross margin. You can say broadly, that's the, that's the impact. Got it, sir. You mentioned that the, SSSG in dine-in channel was in double digits. I just wanted to check if you could mention, what is the kind of SSG in the dine-in channel? Devanshu, SSSS was in the region of around 10% on the dine-in channel, on the transaction growth side, and SSSG was around 7% on the dine-in channel, sir. Sir, one question I wanted to understand. We have also sort of on our overall business level, we have seen about 6% SSSG and about 3.5%-4% SSG, and the competition itself has seen about 7% SSG, and largely, they have also indicated that their transaction growth was largely has driven the SSG for them. Our margins have sort of gotten more impacted vis-a-vis the competition. Just wanted to understand why is there such a sort of investment that we have to do for generating similar amount of transaction growth, and why the competition is able to achieve at a lower investment? Any thoughts on that, please? Yeah, we don't like to talk about competition. It's not fair on our, our part. All we will tell you is, we started this business in 2014. We've been running this business for about nine years. You know, when they came in, the number of years that they have taken to reach where we are. We also believe as we continue to build scale, coffee, which is still just about INR 8,000 of incremental ADAS to our number, as our overall product mix gets better, we are confident of delivering better gross margin. From that perspective, you know, just look at what we are or where we are, keeping that metric in mind. Got it, Prashant. It's more, the timing journey, which is making the brand content. The third one, we haven't provided this contribution of channel-wise sales for India business. If you could just give me that number, I'll be done. Sure. Devanshu, so we, you know, on the back of the strategy of putting dine-in traffic back in store, for work towards getting dine-in traffic in store, we were at 40% delivery share, so it has come down from 43% in the previous quarter to 40%. The journey that we had embarked upon to kind of make more sales in the dine-in part of the business is something which we are doing. And we will make sure that this number is forming part of our presentations going forward. Yeah, a pointed stand on that as well. Yeah, just, just on what Prashant was speaking, I just wanted to make sure that you clarify. See, the ADFs of Q1 of FY 2023 and the ADFs of Q1 in FY 2024 is exactly the same, 1.8, right? The ADF, you know, basically drives the volume and all the numbers kind of like, right? Let me explain to you what happened there. We added about 70 plus restaurants. 90 stores. 90 stores. 91 stores. Yes. 91 stores between that quarter and this quarter, the quarter of FY 2023 to the quarter of FY 2024. Now, these stores always start at a lower radius. In most businesses, most concepts, they start because they're in, you know, the, the, the traffic slowly picks up, right? Now, the, the SSSG stores or the stores that get comping, they deliver the ADF of 126, right? When we put these new stores, you know, obviously, with the low radius, they got down this, the, the total ADF down to 120. Now, as these stores mature over the next two quarters, you'll find that they will go towards the average ADF as well, right? So that's the difference between adding a whole bunch of brand-new stores to your portfolio versus not adding them. If you don't add them, then your, your, your existing portfolio, which is climbed to 146, of course, that's going to deliver much higher margins. I hope that really clarifies the difference that you were asking. Hello? Thanks, Rajeev. Yeah. Thank you. Our next question is from the line of Soham Samanta from Centrum Stock broking. Please go ahead. Hi, Rajeev. Thanks for the opportunity. Just two questions in the beginning. Starting from you and, it, it's, it's up to Kapil also. We have spoken a lot about driving traffic. I just wanted to understand, on the ground, what are the currents you are getting? Is the consumer downtrading, and that's why the traffic is becoming more important? Because what I see that our value strategy over the last two, three years has remained steady. There are two parts. One is that, what is the consumer traffic is saying? Is there is a downtrading, and that's why this value proposition is becoming more important, and that's why they're driving the traffic? The second part is that if you can say that, what is the impact of this strategy driving traffic in terms of quantitative numbers? Is the traffic is on or any quantitative number you can share? Yeah, thank you, first of all, for joining the call. Traffic and on the value platform. See, we have been doing value now for the last 8 years, right? It's not that we have started doing value because there's a downturn or. It, it's just part of the way that QSR operates. They have a value, you know, offering, they have a premium offering, and then they have the core menu, which is a ladder menu. This is not specifically because the market is down or so forth. In fact, you know, you'll see both the competitors, both the, the companies in the burger sector, both reported a higher traffic. You know, that's, that's got to tell you more about the market. There's a higher traffic out there, to, to especially to our burger, burger business. I don't think that's only a issue or that's a downturn. You know, you will have a month here, a month there, for example, when you have Shravan going on, you will have every Monday will be down because most people are fasting on that day. You know, this year we have two Shravans, two months of Shravan, versus, you know, every 10 years, I think, instead of just having one month of Shravan, you have two months of Shravan. All these nuances come and go. Generally, you know, the way we are seeing it is, is, you know, we did INR 2 for 50, and then we did the Stunner menu, and now we're doing the INR 99 menu. You can see that we have only, you know, kind of, done value at a higher price point, right? Not at the INR 50 for 2, now we are at INR 99, right? I think the, the strength of the market is there, and, you know, all, information out there in the market industry is that, it's going to continue to grow at double-digit numbers. Especially the chain, you dine-in restaurants, both in Indonesia and India, are going to be growing significantly faster than the entire food industry. We are confident on that. That's why the growth, you know, that we have planned, for this year and then, you know, for the next 2 years as we kind of make our way to 700 restaurants. Kapil, you want to add anything else? No, just to add to what Raj already shared, I think consumers will continue to seek value for money, or as they call it, worth it. I think we are not just, you know, offering value at INR 99. We continue to have a very balanced menu. We actually were able to sustain volumes of every layer of our menu through the promotion. Wherever consumers find, you know, that the price they're paying for and what the experience they're getting or the product they're getting is worth it, they will continue to sort of invest, and, and grow that, that, that value. That's helpful, Kapil. Again, I'm asking, quantitatively, what is the traffic growth which has happened? Maybe if you can say or spell it out, what is the MAU growth we have seen? Sir, we don't share traffic data on a quantitative basis, only on the% basis is what we share. Yeah, as I shared, we have seen dine-in traffic growth in excess of 10% in quarter one. Okay. All right. My second question on Indonesia. I think it's heartening that Sandeep has done a lot of efforts. What is the best impact we will, we will see? Today, with the 10 stores in Poco, you can't really guess what kind of areas we will see. Obviously, as compared to BKI, the, the, the areas is double. I'm just curious, is the BKI will show the higher growth or Poco is will see the higher growth? Honestly, Poco has a more relevant menu in terms of local population. When you run 25 stores, what kind of areas we can expect? Yeah. First of all, let me just kind of tell you that the Indonesian market, very similar to Indian market, it continues to grow. I think the chain restaurants are, you know, are projected to grow at 16% each year for the next five years, right? That is the expectation of, of that market generally, right? In that market, and that's why it's such an exciting market for us to go in there and establish, establish this business. I mean, we have now got access. Our company has got access to two great markets, India and Indonesia. We were there at the right time. We did the deal, we got access to this market. Now we have two strong brands to build there. Now, Burger King, look at this. The last year, as we were turning, turning around, as Sandeep was putting in all these things like the menu, the, you know, the back to basics and so forth. As he was doing it, he got a 1.7% jump in SSSG. Now, that was completed by the end of last year, then this first quarter of this year, he jumped up 5.5% again at SSG on top of that, right? That SSSG is on top of all the, the, you know, restaurant, the dine-in traffic that is coming in. The ADAS went up from, you know, 17+ to $19+ million, right? We know that that, that business is, is now on track because all the elements have been fixed. The menu has been fixed, the restaurant has been fixed, the operations, the team, everything has been all in place, right? Over the last, you know, four, five quarters, I've been talking to you about all these things we were doing. Now they're complete, and now we are now marketing it and getting the product out. The Popeyes story is fantastic because, you know, you saw we started off at, you know, INR 15 million kind of ADAS on those restaurants, and we are doing... Those are the launch ADAS. When we opened the restaurant, the whole town was there, right, in the first few....Of course, we have settled down to between, you know, INR 35 to 40 thousand, INR 40 million kind of business over there. I think this is a stable business moving forward. And as we build these restaurants, just imagine it in, in a chicken market, 25 restaurants is, is a drop in the bucket, right? There's a journey towards 300 restaurants we're gonna build there. I think both these businesses are strong businesses. We have opened several of these Burger Kings along with Popeyes together, and we have seen that, that's a winning combination. They're doing really well. Even the latest, the last restaurant, the 11th Popeyes we opened, was a joint restaurant with Burger King. Two together are doing a fantastic job sharing, you know, rents, sharing a lot of, CapEx and so forth, and delivering some very high volume on either side. I think it's a winning combination. Now, entirely, will we build them that way? No, we will try to see wherever the opportunity exists to combine those two restaurants and put them together so we can supervise them better, we can, you know, get the inventory to them at a cheaper price and so forth, and deliver those values. I hope those both your questions, too, that were answered on this. Thank you. Sorry to interrupt, Mr. Samanta. May we request you to rejoin the question queue for follow-up questions, as there are several participants waiting for their turn. Thank you. Our next question is from the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas. Please go ahead. Yeah, good morning, sir. Thanks for giving me the opportunity. I just have one question on our SSAG guidance. This year, for India business, we are, we have maintainable guidance of around 10% SSAG. In quarter one, the SSAG stayed at around 3.5%, and Q2, because of the extended travel season and, you know, demand is yet to recover fully. Q2 is also expected to be little on a moderate side. Considering that, the second half should be quite strong for us to achieve, you know, double-digit kind of SSAG. Can you just help me on that line? Yeah, we agree with you, and we completely conquer with- conquer with you. Also, you know, we get into October, we have the Cricket World Cup coming up in India. Plus, interestingly for us, because we have a pretty decent mall portfolio, the malls have now begun to do well because of the way the movies are doing. Overall, as I said, you know, had we seen a significant challenge to this, we would have probably gone and, you know, corrected that SSAG. As we move forward month-on-month, the cohort of a store perspective also changes and more store coming to the SSAG bucket. Right. Just one question on the value offering. This value offering would help us to achieve incremental footfall, as you said. You don't expect it to be a gross margin kind of a dilutive if your transaction, number of transactions or number of, you know, footfalls, increase. That is the reason why you don't expect gross margins to, you know, gross margin diluting, this particular strategy, or there would be a mix improvement which should help to mitigate the impact because of the increase in sales on the value offering? Prashant was saying earlier, you know, if, if we've been doing this value offering, we would, we'd probably be way past 67% right now, right? We are taking some of that gross margin and invested into, into this traffic, right? We have a lot of work streams right now in play, and some of the work streams you will see over the next two quarters coming, because they were already put in place. The benefits of that are going to start coming in now. Then some of the work streams will go in next quarter, which will bring benefits into, into the next balance of the year, right? We, we are very confident that as far as the gross margin, we've, we've always been on the money on this. If you go back and look at all the quarters, since we went public, every single time we report better or, you know, stable, gross margins, because we have built a good, kind of infrastructure to deliver that, and we continue to do that. By the way, just remember, our gross margin includes paper products, it includes food, it includes complete distribution, secondary and primary. Everything is in there. It's, it's, it's something that we believe strongly in, and I think we will continue our journey towards 67, and then, you know, we'll, we'll give you guidance for the next two, three years, post that. Kaustubh, just to add to what Raj mentioned, I guess because of the 10% traffic growth that the team spoke about, a lot of focus has been because of the 99. Kapil mentioned extensively in his commentary that for us, value is one pillar. Building Whopper and premium Kings Collection is also a very important part of our, our menu architecture, right? As you come into the festive period, you will see Whopper coming to television. All I'm trying to say is our product mix also spans across a premium menu, which is very, very strong at Burger King, and we will continue to invest and build this. With coffee incrementally beginning to, you know, show its presence is where we feel that, you know, we'll be able to deliver the gross margin guidance of 67%, despite the INR 99 offering. Right. Thanks, thanks, and all the best for the future. Thank you. Thank you. Our next question is from the line of Aliasgar Shakir from Motilal Oswal. Please go ahead with your question, sir. Yeah, thanks so much for the opportunity. I had a question on your, you know, store level EBITDA margins in India, which is somewhere about 8%. If you could just share over the next three to four years, how will the journey be for the store level margin? You did give a lot of indication of, you know, your growth, SSSC and, you know, store additions. Also, if you could, you know, share how the store level margins should, you know, behave in the next three to four years and, you know, in how much time we should reach, you know, probably mid-teens or higher teens kind of number. Just, a follow-up there. If you could also, you know, kind of explain, you know, what could be the levers so, you know, productivity, gross margin, as you mentioned, will also be improving. You know, what could be the levers of that? Thank you so much. Ali Asgar, as you know, and, you know, people who have been listening to our calls, we don't guide on restaurant margins. We don't guide on company level EBITDA margin. However, because, you know, you have enough history of a lot of the QSR plates, you will understand a lot of the operating leverages is very directly linked to the growth in ADS. We have shared with you our SSSG guidance for this year and our long-term SSSG guidance of about 8%. If you overweight this to the ADS number that we have shared, you will get a sense in terms of the operating leverage that will kick in, which will expand our, our store EBITDA margins and our, our company EBITDA margin. From that perspective, I, I don't want to go beyond this, Aliasga r, if you will, for, for some reason, understand, where we are kind of coming from. Understand. No, this is helpful. You know, the question I was asking is more from that point of view that, you know, productivity wise, see, because we have a smaller store related to, you know, some, our competition. You know, productivity wise, where would you benchmark yourself today? You know, and, you know, I mean, how much scope you see that, you know, improvement basically in the next three, four years? Just to let you know, that there is no restriction on our stores to do any kind of ADS right now. We are not, you know, we are not building small stores. We, you know, our average size is about 2,400 sq ft, right? We don't have any constrictions coming in from that. We're not worried about that. Traffic is coming in slowly into our restaurants, because, you know, like I said, 91 stores were built on the back of this FY, Q1 FY 2023 to Q1 FY 2024. Those 91 stores usually take a little while to kind of get speed up, and then, you know, they hit the average, and then, you know, some of them go way beyond the average. This is what it is, right? You know, the SSSG guidance is, is for this year, then we have SSSG long-term guidance. You know that our gross margin continues our journey to 67 and then beyond. You know that labor is, is more, kind of a, fixed to a variable expense, so that keeps shrinking as the productivity goes up. All the other expenses, except variable rent, you know, will become a lower percentage of margin. You should be able to, you know, guide that. To make a forward looking on, on the growth, on the margins of the restaurants, probably won't be proper for us to do. I think you, you, you understand the model, and you, you've seen the concepts of year that have been there for 30 years. You should be able to put all this together and, and, you know, kind of make your guidance over there. If you have any other questions, you know, as you're doing this, feel free to call Prashant or, you know, Sumit, and, they'll be happy to help you. Absolutely. No, this is very, very detailed and helpful. Thank you so much. Just last one question is on BK Cafe. I, I wasn't very clear. The incremental sales it is doing is about INR 8,000, right? But overall is about INR 15,000. Can you just explain that point? Is overall in a cafe, about 15% contribution is coming from, you know, BK Cafe? Is that understanding correct? I see. The, the reason we also... you know, we're kind of a little bit strict on ourselves, right? We can just report 15,000 ADS, 16,000 ADS, and so forth. Every time we sell, you know, a cafe, sometimes it cannibalizes not buying a soda. Then we take the difference between the price of the soda and the, the soda as in, you know, CFC carbonated drink, versus the cafe price, and we only report that as incremental sales, right? While our, our, our ADS has now grown up to over 15,000 per store per day. By the way, since you know, a lot of these cafes are new, they've not even got a quarter behind their belt, right? Not even a quarter behind their belt. So when we report 15,000, generally, you know, half of that is incremental, the other half is potentially cannibalizing something else the person could have purchased, which they have opted to switch to cafe. I hope that makes it clear. Got it. This is very clear. Thank you so much. Thank you. Our next question is on the line of Harsh from Dimensional Securities. Please go ahead. Hi, good afternoon, sir. First question is on the Indonesian business. Since we are down to 169 stores, I just want to I wanted to understand on the BK side, how many more stores do we plan to rationalize there? Yeah, it, it's a not, not a lot. I mean, we're looking at, you know, single-digit number of stores. We've basically rationalized the portfolio. We're, we are just working on a few of them, will probably be successful. The reason we can't give you the numbers, we are trying to keep them all open, right? We're trying to negotiate rents down, and if we do, then we'll keep them all open. If we're not able to, then, you know, we'll rationalize a few of them. You know, the good, the good part of Indonesia is, is, is it's turned around, right? We worked, we put in a year, we fixed all the stuff, we put it all in place. Now, it's all turned positive. It gave a whole year of positive SSSG. Now, it's, you know, double that, more than double that SSG positive for the first quarter. Sumit's got a great team. He's a great leader. He's, he's building a strong business over there. Coupled with Popeyes, and Popeyes are coming in and doing a great job. We are very, very confident with the business there. I always was. I mean, the day we purchased this to today, I completely am very confident this is a strong business in the long run, because the market is very strong. Right? Both these businesses, we continue driving that in upward direction. Yeah, okay. On the innovation side, as you mentioned, that the strategic initiatives on the menu side is done with the chicken menu, and we are also introducing the range of desserts and also a value offering. Just wanted to understand on the ADH side, currently we are at around IDR 18 million, IDR 180 million-IDR 190 million. Where do we see What is the ideal target for the Indonesian Burger King ADH? Yeah, we are not guiding currently, as you know, on the Indonesian business, because we just over the last six months, made all the strategic changes. Our big picture internal target and what we've shared with you guys is to ensure that, you know, we break even this business, which will be INR 100 crore spend from last year. We are now seeing some stabilization coming back on the BK Indonesian side. As you know, we reported a INR 19.4 million ADS. Today, to sit here and guide will be a little tough for us. Just give us another couple of quarters. Once we kind of get a little strong sense in terms of the visibility, we will come and revisit this over the next two quarters. Thank you. We move to our next question. Our last question for today's question and answer session comes from the line of Krishnan Sambamoorthy from Nirmal Bang. Please go ahead. Yeah. Can you hear me? Yes, Krishnan. Yeah, yeah, Prashant. Prashant, there was a mention of building relevance and credibility of the chicken menu in BKI. Here, the aim initially was to increase the proportion of chicken and reduce the proportion of mutton, right, in, in Indonesia. What is the stage of progress that has been made over the last year, and where do you intend to be from a year's time? Yeah. First of all, it's not mutton, it is, beef over there. They sell beef and then they sell chicken. If you look at, you know, the market generally, where the burger players, there's, you know, a few burger players there, 70% of their sales is chicken and 30% of their sales is usually in the beef sector. That's generally where the industry is. In, in Burger King, as we took the business over, where we saw the opportunity was, we saw that the chicken business was at about 30% and the beef business was at, at about 70%. Now, we're not trying to decrease the 70% beef business. I think we actually want to grow that business as well, because we are a leader in delivering Whopper, and we are the leader in, in burger taste and quality all around the world, as we are known for it. There's no intention in, in decreasing that portion. We will continue to increase that portion. If you look at the pie, you will find that slowly, as the chicken-- Because we did not have both the chicken elements, right? We only had one, which is a classic chicken, but wasn't really classic, wasn't really spicy. It was sitting somewhere in between those. Now we have a proper, you know, classic, for, for those that don't like spicy products and even for the kids, you know, we have a classic version. Then the spicy version, which really kicked off and started doing really well, you know, is generating new people coming in that never had that spicy version. You will see that this 30% portion will start to grow, and it will not grow at the expense of the 70% beef business. As it grows, you'll find the proportion of the pie will be more evenly spread. You know, my, my conversations with Sandeep, and Sandeep is on the call as well, is, is the first step is to make sure that at least we start selling 50% of our portfolio as, as chicken. We'll start working towards that and then, and then beyond that. I don't know, Sandeep, if you want to add anything else. I just want to add one thing. You know, if you actually walk into our restaurant, you would see the way the consumer is actually consuming this chicken. I said in our presentation that fried chicken is a staple food here. What is happening is they are buying burgers and adding a piece of chicken onto their meal. The chicken incidence is just coming as an incremental incidence without compromising or cannibalizing our burger sale. That is how actually the overall business is increasing. That's the beauty of this market, having a, you know, combination of burger and chicken as an overall portfolio. I hope that answers to your question, Krishnan. Yes, that's useful. Any, any timeline of, what Raj mentioned about the equal contribution from, from chicken and burgers? Maybe it's a year and a half, two years, three years. Would you like to, have a guess there? All at this moment, I can tell you is, during the campaign period, actually, our, our chicken portfolio almost reached to the tune of about 50%, right? Then after that, we are stabilizing, but we, we have moved the goal. I actually said in my presentation that the overall chicken incidence from the pre-campaign period to post-campaign has gone up by about 25%. It's not going to take a long period of time is all I can tell you at this moment. Thank you. Ladies and gentlemen, that brings us to to the end of our question-and-answer session. Due to time constraint, that was the last question of our question-and-answer session. I now hand the conference over to the management for closing comments. Thank you, everybody, for taking the time and joining us. I know we've not got a chance to answer everybody's question. As you know, my email is on the, on the presentation. Feel free to write an email if you have any further questions on this, and we'll be happy to answer. Thank you. Thank you. On behalf of Nuvama Wealth Management, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.