Ladies and gentlemen, good day, and welcome to Restaurant Brands Asia Limited Q2 FY 2025 Earnings Conference Call, hosted by Motilal Oswal Financial Services Limited. As a reminder, all participants' 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 and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naveen Trivedi from Motilal Oswal Financial Services Limited. Thank you, and over to you, sir. Yeah, good morning, everyone. On behalf of Motilal Oswal, I'm Naveen Trivedi. I would like to welcome you all to the Restaurant Brands Asia Q2 FY 2025 Earnings Conference Call. From the management today, we have Mr. Rajeev Varman, Whole-time Director and Group CEO, Mr. Sumit Zaveri, Group CFO and Chief Business Officer, Mr. Sandeep Dey, Brand President, Indonesia, Mr. Kapil Grover, Group CMO, and Mr. Gaurav Ajjan, Head of Strategy and IR. I would like now hand over the call to the management for the opening remarks. Over to you, sir. Thank you, Naveen. Good morning, everyone, and Happy Diwali to everyone. Today is Dhanteras, so happy Dhanteras, and then Happy Diwali. Also joining the call today is Cicily Thomas, who's leading the business here in India. Sandeep, who's leading the Indonesia business as well, is on the call. And yes, Sumit Zaveri and Gaurav and Kapil are, as every call they are, they're going to continue to be on the call. See, a couple of things. First, I just wanna kick off, and then I'll hand it over to Sumit to kinda carry you through the numbers and so forth. See, we know the environment has been tough in India, and you know, the traffic numbers have been kind of subdued and so forth. We have seen SSSG coming in negative in the industry. We had been delivering positive same-store sales for the last, I would say, eight, nine quarters, and this is the first time we will be having a negative report on SSSG. But you know, we are steadfast on our progress, and I will talk more about that, so today, if you look at what our plan for India is, so our plan for India was first to make sure that we continue to increase dine-in traffic. Is that happening? You know, we shared this with you last time. Dine-in traffic continues to improve, continues to increase. Every single month we see the dine-in traffic continue to increase. So we want to get more and more customers into our restaurants, and we are, you know, very successful in doing that. And that continues in this quarter and into this current quarter. The second objective that I shared with you was to make sure that the delivery business was getting more and more profitable. In the overall scheme of the restaurant operating margins or restaurant EBITDA being positive and getting more and more efficiency there, both those we have delivered in spite of a lower ADS this quarter. We have continued and delivered better profit over last quarter, but also better quarter over the previous year. So profitability focus in that, you know, restaurant EBITDA profitability, as well as improving the dry delivery business profitability. Both those objectives, we have achieved, so we continue to grow on those. The question of traffic and sales, we continue to drive more and more traffic into our restaurants, which was the objective, and we continue to do that by our, you know, promotion of 2 for INR 79, 2 for INR 99, and the introduction of puff at 2 for INR 59. So it's continued to drive traffic into our business. The third pillar was digital, and Cicily and Kapil will talk more about the digital transformation, where we are in terms of our numbers. But you know, our objective is to take our entire portfolio of restaurants and make them the restaurants of tomorrow, which I think we have successfully done over 60% right now, and we should probably get close to 100% by the end of this fiscal year. That digital transformation is, you know, across the counter with our guests, the experience of our guests, as well as digital transformation within our kitchen for our employees. So that we continue. We continue our dine-in traffic. We continue our digital, you know, ambition. We continue to focus on profitability, both at the restaurant level EBITDA as well as improving our delivery profitability. So that's basically the prong approach to India business. We continue to move on that. We are on plan. We continue to be on plan with our numbers, and I'll share those numbers with you now. So we are at about, not at about, but we are at 464 stores. That's 8 stores that quarter, quarter- over- quarter, and this is 60 restaurants more this year versus the same quarter last year. Okay? INAB, INR 492 crores in sales, which is 0.3% up quarter- over- quarter, and 8.5% over last year's same quarter. India's INAB 118, this is where I told you the SSSG was -3, which was +3 the previous quarter, which, has come down to minus three, but predominantly because of our focus on making delivery profitable, we have taken some pricing there, and we are okay with, you know, some of the traffic falling there. But the profitability is improving and increasing in our delivery business. Gross margin, 67.5, which is 0.7 better over last year's same quarter, and about flat, quarter- over- quarter. India EBITDA, EBITDA restaurant level, pre-Ind AS 116, was 19.8%. Let me repeat that. 19.8% higher than quarter- over- quarter. This is a fantastic job that the entire team has done over here to deliver 19.8% better profitability over the last quarter, 7.6% over year- over- year over last quarter. So restaurants are becoming more and more profitable. In spite of the tight environment and sales, we continue to improve our restaurant level profitability. We continue to drive more traffic into our, into our restaurant dine-in. And finally, company level EBITDA. Again, I'm going to say this number, 39.4% higher than the previous quarter. 39.4. It's at 24.4 crores, and it is literally point six percent higher year- over- year. So well done to the operations team in India. Cicely Thomas will talk more about this. She heads the business here, so, well done, Cicely, and the entire team. Now, just going over to Indonesia, just to kind of, you know, reiterate what we're doing in Indonesia. Sandeep is here on the call. So again, as we understand, you know, in Indonesia, we have this geopolitical climate, which is we kind of keep hoping that it will go away, but it still prevails over there. There's also some pressures over there from the macro numbers. The economy is slightly challenged over there, and we have not seen a reversal in traffic, negative traffic in this last quarter. We are hoping to see some reversal, but we did not see that. So at same 149 stores, Burger King, 25 stores, Popeyes. We haven't built any stores. We don't intend to build any stores until we fix that business over there. But here's what Sandeep and his team have done. They've put in place the entire menu. So today, we are supposed to launch this last quarter, and I'm talking about Q1, but we then finally launched it in Q2 because of the environment there, the geopolitical. And we finally, now, this quarter, which is Q3, gone on air to advertise it. So we are advertising the spicy chicken BIC, which is missing from our menu, which has got a massive following. I think, you know, we expect that 50% of our chicken sales, BIC sales, will now be on this product. So we have introduced that product. We have just started marketing that product in all 360-degree and digital channels, television, so forth. So we put that out there. So that big chunk of work is done. We have cleaned out the portfolio. We are further looking at tightening up our G&A, which will be in the next four weeks. We will be working on further reducing our G&A and our overheads over there, consolidating the total G&A down to a very minimal number, and then focusing on our restaurants and seeing if there are other restaurants that need to be closed or optimized. But, you know, we have put a good team in place over there. We have the restaurants all refreshed, all the operations, equipment, you know, have been fixed. The menu has been reorganized. We have a fantastic CMO over there, Namita, who is doing a fantastic job, you know, putting together a marketing program. She's put a great menu together. She's cleaned out menu items. So all that is in place. We are just waiting for the headwinds to stop and the geopolitical issues to be behind us, and hopefully some positive macros for us to turn around. But in the interim where all this is in place, we continue to be more efficient, reduce the losses over there, the cash losses over there, and just be ready for, when things turn around, that we are a very efficient organization and very profitable over there. So with those words, I'm going to turn it over to Sumit Zaveri, who will carry you through the rest of the numbers. Over to you, Sumit. Thank you, Raj. So I'll just take you through the broad key highlights of the India performance and then take you through Indonesia performance. As far as store growth is concerned, we continue to kind of inch forward as per our plan. We're currently at 264 restaurants as we ended September 2024. During the first half of the year, as you can see, our concentration was to improve the overall substance in our restaurants. That has been our focus on the capital spend side. And you can see that we've rapidly grown to 279. As we speak, we will kind of go over 300 restaurants as far as our digital investment are concerned. Then we slowly inch up on our cafe presence in our stores as well, which stands at 365 restaurants that have cafe today. As far as ADS is concerned, we kind of at the same, more or less the same range, what we achieved in quarter one, at 118 ADS,- 3% on SSSG. As Raj mentioned, almost after 8, 9 quarters, this is the first time that we've been negative. But while we are negative on SSSG, we continue to kind of be focused on the value strategy, and we remain positive on SSS-SSTG side. Delivery mix has been more or less the same at 43%. Our revenue at the back of, the new store additions that we've been doing continues to grow. We are at total revenue of INR 492 crores, similar to what we had in quarter one, almost around 7% higher than last year. As far as gross margins is concerned, it's marginally lower at 67.5%. This is purely at the back of some of the launches that we've done on the snacking category side. Kapil will take you through that. It is planned interventions that we've done. It is not to do with any of the other macro environment, per se. We've done substantial launches, and we wanted to make sure that the launch being successful, we've really gone aggressive with the trial pricing of the launch. As we now slowly relook at the pricing thereafter, we should see the reversal on the gross margin side to come back. As far as restaurant EBITDA is concerned, it'll be pre-Ind AS 116 number of INR 552 crores, 10.6%, for the quarter. At the back of it, we continue to report, or we've gone back to over 5% as a company EBITDA number with INR 24.4 crores. So it's similar to what we achieved last year, and certainly a substantial growth from INR 17.5 crores to INR 24.4 crores. Going on to slide 10, having covered the India business, quickly going on to slide 10 on Indonesia performance. Yes, Indonesia, we continue to have a challenging environment, as Raj mentioned. The EBITDA for both the businesses are currently under check. But at the same time, we've now started making our marketing interventions to go live in quarter three. So while we have negative reported EBITDA on Indonesia side, we believe that we should now slowly start seeing some reversals on the revenue side. At the back of it, we, being fleet-footed as a, as an organization, we'll continue to look at costs in an aggressive manner, and we will certainly continue to do that in Indonesia, for sure, and look at the corporate G&A levels where we currently stand there. And so that's literally what updates about Indonesia. I'm not back getting into consolidated performance that's already shared, so we can look at that as well. So having said that, I'll put on to marketing's Kapil, to take us through the marketing initiatives on what we've done. Thanks. Thanks, Sumit, and good morning, everyone. Just to reiterate, Raj mentioned, we are pretty much on plan. We continue to stay on track on our value strategy. We firmly believe that having a consistent value strategy for driving dine-in traffic in our restaurants is key to our strategic pillars. Just to recap, we had launched the meal platform last year at INR 99 Crispy Veg Meal. That gave us significant traffic growth in dine-in. As the platform got cluttered, January this year, we tested the two for INR 79 and INR 99, and since April, that's been our national value program, which has been giving us good, good returns on dine-in traffic. Last quarter, we added the newly launched Pizza Puff as a limited time trial offer to the two for platform. And I think if you look at a two-year basis, first half of the year, we've had significant double-digit dine-in traffic growth on the back of these value programs. In addition to the ninety-nine, seventy-nine, ninety-nine platform, we continue to offer the ninety-nine meal on the BK App as an exclusive offer, so that value program continues as a part of the Crazy Hour deals platform. As a third dimension to our value strategy, we also offer great value on shareable meals. So if you look at the recent seasonal, we had the monsoon meal deals for two available on all our, dine-in assets for the guests that come in to share a good time with their family and friends. Turn on slide number 14. We now have over 365 cafes in the country, and this base continues to grow and deliver 14,000 to the platform ADS. This quarter, we continue to drive awareness and engagement programs on social media and also started experimenting with an all-day breakfast menu as an option in stores that open early, like transit and corporate trade areas. On the product innovation update, as Sumit mentioned, we launched the Veg Pizza Puff nationally. It was rolled out in the last quarter at an invitational price point of 2 for INR 59. We saw tremendous response from our guests, and some of our stores were selling upwards of 200-300 puffs per store per day. That's the kind of response we got on the product. Given this response, we've just added the chicken variant, so the Chicken Pizza Puff is being rolled out as we speak. It's already available in South India, and we are scaling up for a national rollout in the next few days to further strengthen our snacking menu, which is one of the most key day parts in our category. And we will continue to have more updates on the next call as we continue to drive more guest-focused innovation. Now, on the restaurant side, we've spoken about reimagining our guest experience via digital transformation and an upgraded service experience in our stores. As we speak, over three hundred stores are enabled with self-ordering kiosks, enabled QR codes, and all our dine-in stores offer table service. I would now request my colleague, Cicily to share her thoughts on this rollout. Thank you, Kapil. Good morning, everybody. So just to take off from where Kapil said and Sumit said, this entire year, our focus has been on the digital journey and enhancing our customer and guest experience at the store through digital experience. I would like to divide this and just take you through what we've done. As Kapil mentioned, as we speak, we have three hundred and twenty stores, and this is what we've planned by the end of the year, and we are very effectively doing that. We divide the digital into front of house and back of house. And why I would do this, is our external customer and internal customers are both important when we want to actually give a very good guest experience. In the front of house, we offer table service. I'm sure many of you who have visited our stores, you'd have seen that today you can order from multiple touchpoints in our stores, which is either on the tables through a QR code, we have the BK App, and of course, we have the SOK, the self-ordering kiosk. Guests have very much appreciated the ease and convenience of ordering as there are multiple touchpoints, and also this allows them to reorder even if they've come to the SOK and gone back. We've seen that this helps us with increasing our dine-in sales, which is one of the priorities for us this year. In the mall, what is interesting is the BK App is now acting as a queue buster. This is helping us increase the throughput and the number of transactions, especially during peak hours. Now, this is also important that we look after our internal customers. We have actually launched at the back of house, something called the dynamic service system. What this does is that it actually improves efficiency of labor, and through that, even operational efficiency. Our crew is finding it very easy to operate the new system, and this helps us with expediting our orders much quicker and with much more accuracy. The last bit on team's journey, which we've just done and which we're very proud of, is that we're automating our drive-thru stores. We are in the process of this digital journey. Today, we have about four of our stores in the DT, which are through voice ordering system. We have actually enhanced the menu, the ordering process. We have spoken to customers, and today, we believe that the speed of service, along with labor efficiency and operational efficiencies, drastically improve our drive-thrus. I hope that all of you get a chance to experience this when you visit the many drive-thrus that we are opening. Thank you. Over to you, Kapil. Thanks. Thanks, Sis. Now I'm on slide number 17. You know, we've been building BK app and laying the foundation of this CRM scale-up in the future. Our acquisitions continue to grow at a very healthy pace, with the app installs growing by 33% over last year's same quarter, and a 2.3x growth in our app user base. This is primarily driven by a strong in-store execution of exclusive brand and deals available only on BK app. Last but not the least, we continue to be one of the most engaging brands on social media, with our focus on youthful, authentic conversations with our fans. The one I particularly loved was one on the Independence Day about different tastes, flavors, perspectives, but all blended in one India. That's all from my side. I will now hand over to Sandeep to share the Indonesia business update. Thank you, Kapil, and a very good morning to all of you. Today, you heard from both Raj as well as Sumit, that the geopolitical headwinds continue to impact our sales, so let me give you a little bit more insights to the overall macro environment here. You know, the overall economy has kind of slowed down. Since May 2024, Indonesia has actually recorded five consecutive months of deflation. The middle-class population shrunk by approximately 9 million, and unemployment increased significantly due to 21% increase in layoffs versus H1 of last year. Even FMCG sector is experiencing softness in demand. In fact, the top FMCG conglomerate has reported high double-digit drop in revenue and over 50% drop in their net profit. As far as QSR industry is concerned, other than the slowdown in consumption, global brands continue to experience the impacts due to the geopolitical turbulence and leading to significant drop in revenues and profits. Now, our business actually started to get much better towards the festive month of April, this year, and by third week of May, we kind of crossed the pre-boycott level sales. But unfortunately, last week of May is when the second crisis hit us, and the dine-in business actually experienced a sharp decline. As a result of which, our quarter two ADS dropped by 11% year-on-year, led by 22% drop in dine-in sales. However, as Raj mentioned, and also as Sumit mentioned, we continue to stay laser-sharp focused on controlling our store operating costs and also our overall admin costs, and at the same time, driving traffic back into our restaurants. Now, I've spoken about this during our last few calls, that this is a very strong fried chicken market, and building a relevance and credibility of our chicken menu is one of the most important strategic pillar for our business. So we have two kinds of fried chicken products in our menu, the crispy and the dunk saucy version of the spicy. However, we also understand that there's a massive demand for a non-saucy, breaded, spicy version. So we developed that product and also test-marketed for almost couple of months. We were quite encouraged by the test results, and based on its success, we launched this product across the country with a very strong aggressive offer price of IDR 17,000 for a piece of chicken and rice, which is almost like 40% discounted. We also rolled out a comprehensive three sixty degree integrated media plan to support this launch. You know, after a gap of almost sixteen months, we have gone on till the TV and also have a robust digital plan in place, including YouTube, including TikTok, programmatic, and so on and so forth. Not just TV and digital, we also have a three- sixty-degree branding, like mall branding, in-store branding, outdoor branding, and also a bunch of engagement activities like, you know, sampling and product reviews with KOLs, crew incentive programs, and so on and so forth. We are also extending this offer across all channels, be it dine-in, be it delivery, be it drive-thru, be it apps, be it coupons. Now, we launched this campaign just about a week back, and we are quite hopeful to see some positive momentum in sales. And moving on to the next slide, which is Popeyes. Now, it's a new brand, small brand, and we just have 25 stores. But the priority for this brand continues to be building awareness and continues to be generating trials. So it's a culinary brand, and our ambition is to build this brand into a chicken destination. We have massive variety in chicken offerings to address different consumption occasions. In fact, we are the only QSR having chicken in both fried as well as grilled formats. Grilled chicken is our unique differentiator, and we have strengthened that portfolio by adding more varieties like grilled wings, like grilled sandwiches to our overall signature grilled collections. We are also launching a breaded spicy fried chicken variant by next month. And with that addition to our menu, we will undisputedly be the only brand offering such a wide range of chicken in the QSR space. So the most important task at hand for this brand is to build awareness and generate trials. 100% of our stores have self-ordering kiosks, and more than 90% of the dining business happens through those kiosks. We have also launched our app and rapidly scaling up downloads. So in the next couple of weeks' time, we are launching a very strong coupon strategy, both digital, through our apps, through our kiosk, as well as physical, to drive trials and drive repeat frequency. And last but not the least, we will continue to be absolutely maniacal about providing elevated guest experience through table service and every other aspects of guest touch points. That is from my side about the Indonesia business, and now I hand it over to Gaurav to share the overall outlook for the business. Yeah. Thank you, Sandeep. Before Gaurav takes over, this is Raj here again. I just want to summarize before we give you, you know, our way forward slide. Look, the India business is very strong. It continues to be extremely strong, and in this environment, it seems to be the only business in the QSR industry which continues to grow positively in profitability, right? So, you know, this is it because of the immense amount of work that we have done in our planning over the last, you know, five, six years in growing the brand profitably. So the business is strong. Traffic and dine-in continues to increase, and it's been increasing for a very long time now, and Kapil shared those numbers with you. Our delivery business continues to become more and more profitable. We are taking several steps, and you'll hear some of the steps in the next quarter, when we share them with you. But we are-- we continue to make that business more and more profitable, and that's our aim there. And Cicely and her team are doing a fantastic job getting the digitalization done in India. So that's, that's the, you know, the strength of getting more customers in, you know, getting transactions rapidly done there, providing all the convenience to our customers. So all these three efforts are on track. The India business is extremely strong. Indonesia, headwinds are there, but in the view of this headwinds, we have taken the following step, as Sandeep articulated. Look, when the economy is usually deflated or it's down, QSR actually thrives in countries like Indonesia and Malaysia and so forth. But due to these headwinds from geopolitical issues, we still kind of face that trauma over there in that business. I think with us having completed the menu, brought in the extra item in there, now positively going on 360-degree advertising of this new product, and of course, the beautiful menu that he's put together, I think we are now looking at everything that we have done is in place, and we are now positively tightening up our belt on G&A and so forth, and we expect that this business will become profitable in the future. So thank you, Sandeep, and I'll turn it over to Gaurav to just kind of summarize the way forward. Thank you, everyone, and we'll take your questions after that. Over to you, Gaurav. Thanks, Raj. Good morning, everyone. I am on slide 24, titled The Way Forward. I think at the end of the last financial year, we had 455 restaurants. Our plan remains to open 55 restaurants this year, giving us a total of 510 restaurants. At the end of last quarter, we had opened nine restaurants, and of the remaining 46, locations have been identified, and most of these restaurants are already in construction. Overall, we remain on track with our restaurant growth plans. For gross profit, as you all know, for last year, our average stood at 67%. Last quarter, despite inflationary pressure, we achieved 67.5%, and our medium-term plan of achieving 69% by FY 2027 remains intact, and this will be on the back of pricing, especially on the delivery side that Raj spoke about, as well as some of the supply chain and distribution initiatives that we are taking. On Indonesia, last year, we had broken even at the restaurant level. This quarter we've been hit by some of the geopolitical headwinds, but, going forward, on the back of the launch of the new spicy chicken, the marketing plans, as well as some cost containment measures, we are targeting to reach cash breakeven at a country level. Thank you everyone for joining in. With that, I would request the moderator to please open up the floor for Q&A. Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. We have the first question from the line of Gaurav Jogani from JM Financial. Please go ahead. Hi, sir. Thank you for taking my question. My question is on regards to the profitability on the India front. You know, while we saw that the ADS had declined by around 6% odd for this year, for this quarter particularly, but despite that, you know, the margins have kind of held on, both at the restaurant level and at the company level. So how should we see costs going ahead from here on? And the way forward, if you can guide something, and what will be the levers for the costs, you know? Yeah. Thank you, Gaurav, for your question. Yes, thank you for, you know, citing that we continue our profitability in spite of all the sales pressures. Look, if I mean, if you'd look at our P&L and you've just put the ADS that would have been there, even getting it back, minus three back to zero, you'll find that all those numbers would have been much better, if you had 3% more sales on top, right? So yeah, those efficiencies, we continue. If you look at the margin side, gross margin side, we'll find efficiencies because we are building more restaurants in cities which have now two or three restaurants, could probably take 10, 15 restaurants. We continue to build there. So what happens is the primary, distribution cost gets spread over instead of two or three restaurants, maybe 10 restaurants. So that, cost on transportation continues to decrease, and you will find efficiencies as one of those handles is basically on gross margin, which is through transportation and so forth. Also, economies of buying. You know, as we continue to increase the volumes, number of restaurants increase, what happens is, we are able to bring in multiple vendors into our system, and then, you know, we are able to bring efficiencies to our P&Ls through better buying, right? Also, in the same respect, you find that the existing vendors are able to produce more at economies of scale, and that also is another handle that's available. See, the advantage, Burger King or RBL has in India is it's the sole operator for the entire country, which means we can really plan and strategically put our distribution centers all across India to bring the best, you know, transportation costs to our restaurants. So that's a big lever there. Second is, you know, last time we spoke on utilities. We told you we were focusing highly on utilities. Our entire team was focused on utilities. We have taken several steps, you know, putting in some technical, you know, machines, which wash the air before it comes in, reducing the temperature before it goes into the air conditioning systems. We have also, you know, reduced the number of boilers, water boilers in our restaurants, so that, you know, those heating temperatures are all coming from one central area. So that has brought efficiencies to our restaurant. We are also working on our equipment, and you will hear from us in the next two quarters on an efficient equipment that we will be rolling out, which will bring down utilities as well. So a lot of work, you know, also in, you know, putting up all these blinders in restaurants with high sunlight and high glass. We have done a lot of things. It's a list of stuff. So the utility unit consumption, in spite of the fact that unit prices continues to go up, the unit consumption, we have continued to reduce it. So you will find that as a big lever as well. And then Cicely is also doing a fantastic job in managing the labor. As you know, with SOKs and digital, you know, machines in our restaurants, there's optimization of total labor that is utilized and better convenience to our consumers and so forth, so all these are levers, and then, you know, our delivery team is doing a fantastic job in making sure the efficiencies in delivery, whether it's taking pricing, whether it's, you know, taking some increased costs on packaging, whether it's in negotiating low prices on delivery, aggregators and so forth. So all these efforts we have put in place, and, you know, product mix is another one, right? What you sell is what determines the profitability of the company. So all this on the delivery side are, you know, key handles to kind of continue to bring this down. So all these are in place. So you will see a gradual... If you look at our P&Ls, you look at our numbers, and I would, you know, invite everyone to go back and look at the last eight quarters of our numbers. You'll find a strategically planned progress in our numbers. You will not find, you know, ups and downs. You will find a strategically planned progress, and that's due to just planning. It's how we are planning our distribution, how we are planning our utilities program, how we are planning our equipment, what Kapil is doing in planning our traffic in the restaurants, what Cicely is doing in bringing SOKs. All this is in a planned way, we are moving it forward. So those-y ou know, you might have a quarter here and there where you'll have some inflationary pressures, but the plan is in place, and you'll find all these key drivers that I just gave you continue to drive those costs lower and profitability higher. I hope that answers, Gaurav. It's a long answer, but I wanted to cover all the levers. Thank you very much, sir. I suppose the line for Mr. Gaurav has been disconnected from his side. We will take the next question, which is from the line of Ms. Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, good morning. Good morning, Raj and Sumit. Thanks for the opportunity. Raj, you mentioned that the SSG is -3%. If I look, for 57% business is coming from dine-ins. I think Kapil also mentioned that the Pizza Puff intervention is also bringing double-digit traffic growth. Now, outcome of this is that SSG has declined -3% and ADS is flat. How we should think of, and maybe if you can give me a little more depth, is the dine-in ADS is higher and SSG is positive, and delivery ADS is coming down. So some more better understanding on these numbers. Yeah, fair question. So two things, right? One is, if you look at the dine-in traffic, it continues to grow, so our focus is on that, and we'll continue driving that. Now, how are we driving our dine-in, you know, business? We are driving through value at this point, right? We have other levers and Kapil has already put those in plan, and you'll see that in the future, but we are driving that through value. So there's an APC reduction when you're at two for INR 79, two for INR 99. You understand that. So that APC reduction, a traffic increase continue to give us a positive momentum on the dine-in business. Now, delivery, you know, we have taken some, you know, serious decisions to make sure that this business continues to generate more profitable, right? In spite of us, you know, increasing some of the prices there, you know, negotiating some of the deals over there, we have made this business, delivery business, more profitable at a lower sales than it was at previous higher sales. In spite of us dropping some of those delivery sales, we have actually improved our profitability EBITDA on it, and that's why you see that even at minus three, we are delivering a higher profit this quarter again, and it's because of this lever that we're focusing on. I hope that clarifies a little more for you. That is helpful. But again, just to add on, we have now mentioned that BK Cafe ADS is also driving fourteen thousand. Yeah. That is also creditable. So, I mean, to drive the traffic, you're doing the right things, but somewhere the math is not happening. So that's what I wanted to have a little more depth. Yeah. So in addition to, you know, opening those cafes, you understand that we put 60 restaurants, new restaurants, that are well below the ADS. I mean, I don't want to throw an ADS number here because no one does that in the industry. But they run below ADS. They catch up in about, you know, a year, year and a half, they catch up with the average ADS. By year two, they start becoming a full-fledged restaurant. So we added those 60 restaurants between the previous quarter and this quarter. And you find that that is one of the levers that kind of keeps the ADS where it is. That we add on these new restaurants would take about a year and a half to kind of ramp up to the average ADS. So they do bring the average down slightly. Apart from that, you know, there is no other lever that I can share with you that you would like to put in your model. But I'll turn it over to Sumit, if he has any other, you know. And you can reach out to Gaurav and if you're putting your model together, he can help kind of answer some of your questions in detail, as you need them. Yeah? Sure. My second question to Sandeep. When you look back in Indonesia, I think there are two targets which you have mentioned, is to run the business profitably, and we want to be EBITDA positive. So just tell me path to profitability. Of course, the country will not recover very, very soon. I mean, these pains will continue, to my sense, though I'm not political expert. But I think in the current scenario, if situation further doesn't deteriorate, how we are planning to get our path to profitability? Maybe, Sandeep, before you take this, I'll just take this first, and then you can add if I'm missing anything. So, Pardeshi, as far as Indonesia path to profitability is covered, it is two-pronged. One is we had already taken a look at the portfolio. We're down to 149. We had taken corrections on the G&A side. We are going to look at that much more closely, and we'll have a harder look even before the business starts to recover on the revenue side. The third piece to this path to profitability, obviously, is to get the sales back to higher levels. We started to invest in the marketing from this quarter. We were earlier planning to start from quarter two, but now we've just started from quarter three, where we've gone live with our chicken promotion. So, a combination of continue to push the brand on the revenue side and then having a very hard look at the G&A is what we are going to address over the next two quarters as we speak, in our path to the first level of cash break-even or profitability, and thereafter, we will build on, onto it. But that's actually how we are going to focus on Indonesia over the next coming two quarters there. And then, you know, as the scenario changes, then we will keep looking at our strategy and way forward on Indonesia. Sorry, Sandeep, if you may want to add. I think you have rightly pointed out some of the key levers. Just other than that, I would add a couple of more points. We are also, what we are trying to do is optimize the overall store operating costs, including the gross margin line, right? Raj did speak about all the efficiency levers we are driving and including the gross margin through procurement efficiencies. In fact, some of those, we are also leveraging some of the India contracts and trying to get the buying price reduced for the Indonesia market as well. So that's also a leverage we are, you know, enjoying. Some of the gross margin improvement levers are in play, and we will see some of those efficiencies coming in in the times to come. At the same time, Naveen, who manages our operations, is doing a fantastic job in bringing the overall store controllable costs down. So quarter- on- quarter, we have optimized the labor cost, improved the productivity of labor. TPLH has significantly gone up, and that is also helping us actually reducing the break-even threshold at a store level, at a significant manner. So, these are the few levers which we will continue to work, other than, of course, optimizing the overhead at a G&A level, significantly down to, as a means to path to our profitability. That's very helpful. I was quite pleased, because despite the relevance and the pain in the economy and macro are not looking better, you guys are spending money on the advertising. So I was more curious, I mean, that's my last check with you, that how much spend we are doing absolutely on the digital media and the ATL? Yes, Shirish. If you can quantify in terms of percentage or maybe absolute number. Thank you. Thank you for the question. So, look, you know, two things we have done. One is we have stopped putting CapEx into that market, which means we are not building any new restaurants, right? We closed down several restaurants. We were, you know, about 26 restaurants were closed. So no more CapEx is going into the restaurant. We are just trying to get the existing portfolio to become profitable. And you are absolutely right, we already had reached restaurant level breakeven, right? We had done that, before the second event happened in Gaza, and then there was headwinds on that event. So we had those issues, right? But we had brought it down to breakeven over there. Now, if you go back and look at our marketing program, we were very, very selective. See, last quarter we were supposed to, and when I say last quarter, I mean Q1, not Q2. We were supposed to go with the marketing program, 360 degrees. But that event happened and we said, "You know, let's just be prudent with this, hold back, and now we are in Q3, going back into the market." We are supposed to, as per our franchise agreement, spend 5% of our sales on marketing. It's required, and we are well within that. We'll end up being well within that 5%. It's mandated by our agreement. We'll end up the year, you know, 5% or lower on our marketing spends. But that's the money we are putting in. You know, the quantity of money we are putting in there is sufficient to do a good job, 360 degrees marketing, whether it's on television, digital or LSM, which is local store marketing. All three elements have been triggered. I think the market is kind of, there's a new government that formed in October. They are, as you know, they're moving their capital from Jakarta, so there's a lot of investment required. The government is advocating now for investments to come from abroad and so forth. So, I think the environment's slowly loosening up and having seen that, we have gone out and we have put this marketing spend. I hope, Shirish, that answers your question. We usually don't share numbers and how much marketing we're putting in until after the fact, but you can understand it's about 5% of our total sales in marketing. Thank you, Raj and team. Happy Diwali to you. Thank you. Thank you, sir. Thank you very much. Ladies and gentlemen, in order to ensure that the management can address all of your questions, I would request you to please ask one question per participant. You can rejoin the queue for a follow-up question. We have the next question from the line of Tejas Shah from Avendus Spark Institutional Equity. Please go ahead. Hi, team. Thanks for the opportunity. Just one question from my side. Just wanted to understand the character of the QSR slowdown that we are witnessing currently in India. Specifically, how do you weigh? Because in last two, three quarters, we have heard multiple factors like geopolitical reasons or competitive intensity, general consumer slowdown. So first of all, is the list exhaustive here, or do you feel there are certain other factors? And if you have to assign or rank them in terms of which factor is contributing more versus relatively less, how would you go about it? Yeah. See, generally, if you look at the market, I'll give you a macro understanding that we have and you know, what Kapil has been doing for the last, you know, seven, eight quarters. You know, the market is slightly on the value side. That's the way we look at it. I don't see a market up and down. Generally, there's always demand. There is always demand in the market. What kind of demand that is? Is it a luxury demand? Is it a demand on the upper end of the menu, or is it a demand on the lower end of the menu? That's the only difference between the way I look at it, generally, and I'm not giving you just an India point of view. This is generally the point of view I've seen all of my life, whether in North America or Europe, that generally, as things get tight, the demand shifts to the value side of the menu. So we continue to drive traffic there. So, when you have more footfalls coming into your restaurant, how can you say that there is no demand, right? So we don't say that. We say that there is demand, but there is a value demand at this point. It will graduate to the mid of the menu and, you know, hopefully that, this December, we should go back into, you know, a more normal kind of, APC or, average per check kind of a pricing, which I think is what, Kapil is estimating, it to go to. So it is right now a value demand, which means a lower APC, but we continue to drive more traffic. We generally are expecting that this, over the next two, three quarters, will start becoming more, you know, a mid to a higher level kind of APC, and you will expect the SSSG to become positive for most of the players. Just, just to double-click on that one factor so other things are clear. Since we are getting higher footfalls or traffic has not been compromised, as you highlighted, should we say that at least in India, the geopolitical factor is not weighing in as heavily as it is in Indonesia? Yeah, I mean, Indonesia is a very different situation. Malaysia, Indonesia, Turkey, some of our businesses in Middle East, they're all being impacted severely. Here at Burger King, we have not seen, any kind of impact in our portfolio, in our portfolio, wherever it is, from geopolitical issues. We might have a miss on that, we may not fully understand that, but we personally don't see that as one of the events that is pushing. I think it's generally, I think demand has moved to the value side of the menu. And you know, Kapil has been extremely prudent in keeping his marketing programs there, and hence you have seen a better performance in the last several quarters from RBA. Very helpful. Thanks and all the best to the team, and Diwali wishes to the whole team. Thanks. Thank you. Thank you so much, sir. The next question is from the line of Amnish Aggarwal from Prabhudas Lilladher Private Limited. Please go ahead. Yeah, hi. I have just basically two data points on which I have queried. One is your other income, which has shown a sharp increase from something like INR 3.9 crores to INR 7 crores. So any reason for that? And the second is other expenses, which have shown a sharp decline, both. For example, if I look at on a QOQ basis, so they have actually dipped from INR 195 crores- INR 186 crores. So this kind of a trend was not there last year, because last year they actually increased by INR 2 crores. So any clarity on this would be helpful. Thanks. Okay. So one is that the other expenses reduction is largely honestly on account of the efficiencies that, that we've put into place, what Raj was mentioning. Other income is more from the perspective of some of the longer term contracts that we've negotiated with our vendors, plus income from surplus funds that we have. So it's a combination of both those that is there. The cost line reductions that we are seeing are all the efforts that Raj mentioned on the utilities and various other kind of initiatives that we've been constantly working on, is really the result why we are seeing the reduction in the cost lines there. That part of the effort will continue, on whether it is on the G&A side or whether it is on the middle or the P&F side. We will continue to remain focused on those part of initiatives there. There is no cut in ad spend, it means? Sorry. There is no cut in ad spend QOQ as a percentage of sales? That you will, that we've kind of mentioned, if you see slide eight, Amnish, there is a marketing expenditure which we kind of share. It's current, in the current quarter, it is 4%, which last quarter was around 5%. But on an average, we spend 5% on a full year basis. So if you really look at it from the perspective of ad spends on a annualized basis, we would always be at 5%. Okay. Thanks a lot. Thank you so much. We have the next question from the line of Dhwanil Desai from Turtle Capital. Please go ahead. Hi, good morning, guys. First of all, congratulations for a very decent performance in a very challenging environment, especially for India, so my first question is, you know, when we, you know, if we go back in time, when we acquired the Indonesia business, I think the idea was that, you know, it's one of the fourth most populous market, growth is there, we'll, you know, achieve good growth, and there is, decent room for, you know, gross margin improvement and, you know, the restaurants available economics is much better, so now, given that, you know, Indonesia has been a pain point for us, for some time now, how do you guys think about that market? Let's say, you know, if our assumptions which we had at that point in time are not now accurate or relevant, you know, do we think of doing something else in the Indonesian market, either, hiving it off and selling? Some thoughts on that? Yeah. Thank you, thank you for your question. We appreciate your concern. But, look here, these are geopolitical headwinds, right? The assumption were never made on geopolitical, right? We never bought that business saying, "Hey, after we bought it, there's gonna be a strike in the Middle East and a war over there, which is gonna have an impact, way, you know, thousands of miles away in Indonesia." See, this business in the heyday, you know, this is pre-COVID, used to run a 15% plus kind of a EBITDA at the restaurant level. That's the business that was, right? Now, you know, the damage that has been done to this business, and it's not just us, it's the entire industry. You know, Sandeep kind of articulated what's happening with the other QSRs over there. KFC is actually a public company. You can Google and see their results as well. So this is more driven by geopolitical. It's as I call it, acute, it's not chronic, which means that it'll go away and we will come back to you know, basically good sales and you know, people will come back and embrace the business. We see that, because you know, when we go out and talk about value, we do see you know, uptick in our delivery sales and takeouts. People are still like a little hesitant to be sitting in the restaurant for to be seen sitting in a American brand kind of a restaurant there. But I think my sense is, these are acute. They happen, and they go away. And I think it'll, and the government tailwind is very, very promising. I think the new government formation, the ambition of them to, you know, get some foreign investment there to support the brands that have come in and built there, whether it's Unilever, whether it's all the rest of us. I think there's a lot of focus on that, and I think we will benefit from that, but it'll take a little time. We have to have patience. So while we need some time and we have to, we need to have that patience, we are not just sitting, waiting for good things to happen, right? We fixed the menu. We put in this extra thing. We went out boldly, and we started marketing this product. On the other hand, we are also taking the second 2.0, I would say, on G&A, and you will find very pleasing numbers towards Q4 on all the steps we are taking on our G&A forefront. We're gonna make this a very efficient business, right? We are going to make sure that this business becomes extremely efficient, and we- our ambition is to get back to the fifteen plus kind of gross margin, the margin, restaurant level margin that it used to enjoy. It's doable because now the things are in place, and we have got a good team over there, a good leader like Sandeep running it. We have, you know, Naveen, who's a very good operator who runs all the restaurants there. We have a very good CMO there, Namita, who is doing a fantastic job. So I think all the things are in place. You know, unfortunately, these events happen, and you have to kind of suck it up. Just like during COVID, we had global event, right? So we just have to suck it up and kind of do all the right things and get ready for when things improve. Thanks, Raj. Thanks for the elaborate answer. One more question on India. So I think, you know, we have been very razor-sharp focusing in terms of our value strategy. So if I look at our peer or competition, I think in last three quarters, they have significantly increased focus on value offerings. And I think they always had a value offering, but I think the focus has increased there significantly. So in that kind of a context, how do we see our traffic growth and ADS and SSSG panning out for next three quarters? Do we see significant impact from that? We will continue to be focused on increasing our dine-in traffic. That's a commitment we have from the entire team, that we will continue to drive more people into our restaurant. We have beautiful SOKs there. We have a DSS system. We have table ordering. Our drive-through restaurants have beautiful digital, you know, digital menu boards and ordering systems outside. We are now going to make the experience of this consumer moving forward, a 2.0 kind of experience when they come into our restaurant, so that's what's going to be our main focus of this team. On the delivery side, we already are among the top in, if not the top, the biggest driver of traffic in delivery. We have just taken our focus, as a company to make sure that we now start making that, business more and more profitable. So we are putting a lot of emphasis on what products we are selling, what, discounts we are giving, what, you know, packaging charges, all that stuff, we have started putting a lot of focus on it, and we have started increasing its profit, significantly. So that effort will continue. The environment, from time to time, you'll find all the players in value area. You'll find sometimes, when everyone's in value area, we, you know, one operator might choose to go into the, you know, the upper end of the menu. But that's how we... You know, that's how the industry rolls, and, we're not worried about that. We've now got enough experience of 10 years operating in India, so we understand that very clearly. Great. Thanks for the answer, and wish you all the best, and Happy Diwali to all. Thank you. Thank you. Thank you so much. The next question is from the line of Nihal Mahesh Jham from Ambit Capital. Please go ahead. Yes, sir. Good morning. I just had one question. For the India business, if I look at your delivery and dine-in growth, both are similar, I think around 9%. However, a lot of the other QSRs, we've seen that delivery has done much better. So is it that the value offerings that we had specifically for dine-in is something that drove a lot of the traffic, whereas on the delivery side, given those offers were not available, is the reason we saw similar growth? Yeah, you know, and, I'll let Kapil kind of answer the second part of that thing. But see, you choose how you're going to bring traffic in, in the dine-in business. So there's a strategy, there's a value proposition, there's a communication proposition, and there's an operations, you know, initiative. So you put all those in place to drive traffic into the dine-in. So that is in place. He's picked, this two-for, kind of, platform there, and he continues to drive. That doesn't mean that we stop doing the business on the Whopper or on our, you know, gourmet end of the menu, which are King's Collection. We don't stop doing that business, you know, and we don't stop, putting in snacking items. We don't stop all our effort in cafe. But there's a value strategy that Kapil does. That value strategy is different in dine-in. Now, coming on his delivery business, driving traffic through delivery, very different strategy in place, right? Whether it is, as you call it, Blitz over here, that is available on one aggregator, whether it's a discount on another aggregator, what is discounted, what menu items are in those menus, that is a strategy that, you can kind of fine-tune from year to year. And now the focus over there is to make sure that PNL continues to increase the profitability. We want to bring raise that profitability level to another level. With, I don't know, Kapil, if you wany to add it. No, I think, Rajeev, you summed it up quite well. It is a channel-wide approach. Every channel, you know, has its own sort of consumer insights and needs, and we sort of cater to that, based on our understanding of the consumer, and it has to be a balanced approach. You know, we don't sway on one side. We balance out value with innovation on the demand side, and these are not tactics, these are long-term plays, so we'll see them play out in the next few quarters, in the same direction. Sure, I'll take this offline also. Thank you so much. Thank you. I think we are past eleven o'clock. We can take one more question, and then we'll call off the meeting. Thank you. Okay, sir. Thank you very much. The next question is from the line of Rohit from iThought PMS. Please go ahead. Yeah, good morning. Am I audible? Yeah. Yeah. Good morning, everybody. So just one question on the balance sheet. I think, I mean, so I think we have about INR 100 crores of cash and some debt as well, which has gone up in the last probably 3-4 quarters. So as we sort of, this is a - I mean, at a com - at an overall entity level, as we expand probably in India from probably at the end of this year, from 500 to closer to 700 in a couple of years, and also probably Indonesia is taking a bit more time to turn around. So is there probably need to raise more money? Is that something that the com - the management is thinking? Or, are you comfortable with the cash flows that you'll generate for the ramp-up that is there, at least in India? Thanks, Rohit, for that question. So yeah, we are evaluating the overall liquidity position very closely. Yes, we do believe that there will be some amount of liquidity that we might have to add. We are just kind of still internally finalizing the plan in terms of which path we could take. But yes, we would look at some kind of... Yeah. And just to add to what Sumit just said, you know, we're not putting any CapEx in Indonesia, so you'd appreciate that. All the marketing spend over there comes from within the sales that we generate there, so there's no ratio there. We continue to grow here in India, and we will, you know, shortly, kind of share those plans for the next, you know, little while, next few years. Probably by the end of this year, we will share all that with you guys. But yes, we are evaluating all those and making sure that we are, we continue to grow and build a large organization here in India. Thank you. Got it. Thank you. That's all from me, sir. Thanks. All right. Thank you, guys. Thank you everyone for joining. Again, a very, very happy Diwali to everyone. I'll turn it over to Gaurav, and, unless, is there anything else? No. Thanks, Raj. Thank you everyone for joining in. In case any of your questions are unanswered, my contact details are there at the end of the presentation. Please feel free to reach out to us. Thank you, everyone. Thank you. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.