Burger King India finally works but its stock still refuses to celebrate

**Snigdha Sharma** (0:01)
Earlier this month, Burger King India was acquired, and the person who just bought the business comes from the world of, well, pharmaceuticals.
Ayush Agarwal is 37 years old, and his family is behind Ajanta Pharma, a mid-sized drug company worth nearly Rs. 43,000 crore. Not the buyer that most people were expecting for Restaurant Brands Asia, which is the listed company that runs Burger King India and Indonesia.
But, Agarwal is actually no stranger to food. He has spent more than a decade building his own brands. You've probably heard of some of them already. Chinese Walk, Big Bowl, The Momo Company, they are all a part of his quick service restaurant company called Lenexis Foodwork. And earlier in July, Lenexis completed its takeover of Restaurant Brands Asia from the previous owner, Everstone Capital. At first glance, it looks like a solid bet. Over the last five years, Burger King India has become a genuinely good business. Its restaurant level profits have more than doubled, and gross margins are at record highs. The chain has posted five straight quarters of same store sales growth, even while shoppers, cutback and rivals have been struggling to fill tables. But here is what's puzzling. The business is good, but the stock does not believe it. You see, Restaurant Brands Asia trades close to its IPO price of 60 rupees. But back in late 2020, that IPO was subscribed 156 times, and the stock nearly doubled on day one.
All that faith has drained away now even as the company underneath it got stronger. So what is holding it down?
Two things. The first is Indonesia. An old acquisition there keeps bleeding money year after year. And the second is the new owner and how he paid. Lenexis did more than buy a steak. It poured nearly 1500 crore rupees into the company, and much of that is debt backed by Agarwal's pledged shares in Ajanta Pharma itself. And this second problem points to the real question hanging over this deal. A Burger King operator does not need that kind of money. Its own expansion plans cost a fraction of it. So why is it here?
Welcome to Daybreak, a business podcast from The Ken. I'm your host, Snigdha Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that's worth understanding and worth your time. Today is Tuesday, the 28th of July.
Let's start with the good stuff first, because to be fair, there is a lot of it. Burger King India is one of the country's better run quick service restaurants. In the four years leading up to the financial year 2026, gross margins climbed from under 66% to nearly 70%, and that is ahead of what management itself targeted. Restro-level EBITDA margins doubled to nearly 12%.
The store count also doubled to over 580
Same store sales growth hit 6.3% in the March quarter, and that is the chain's best run in almost three years. If you compare that with others like McDonald's or KFC, their recovery seems badger. A lot of this traces back to timing. Burger King entered India in 2014, and this was around the time that McDonald's fell into one of the longest franchisee disputes in global restaurant history. As that litigation dragged on, McDonald's expansion in the North and East was stalled.
A gap had opened up, and Burger King walked straight through it, and it held the sole right to develop and run its outlets so that it could scale cleanly. And today, it is India's second largest burger chain by store count behind only McDonald's. But not every number is moving up. Average daily sales per store have stayed flat at about 1.16 lakh rupees for three years now.
Management points to the age of the stores. Nearly a third of them are less than three years old, and newer cafe formats start with lower volumes. CEO Rajeev Verma even made this point to investors. There is also a bigger shift underway. Aniket Nikum, who is a former Subway India operator who now runs ABN Capital, says that Zomato and Swiggy have fragmented the market. Scale, location and branding used to be real barriers. Now, anybody with a kitchen and a delivery listing can chase the same customer.
Another investor also pushed back, saying that every player has already adjusted. For Burger King, delivery has settled into a steady 42-44% of its sales over the last four quarters. But if the India business overall works, why does the stock say otherwise? More on this in the next segment.
The paying point is Indonesia. In 2022, the company paid over 1,000 crore rupees for an 88% stake in Burger King Indonesia. And the logic sounded strong. Investors were told that it was the world's fourth-most populous country with over 270 million people. Also higher per capita income and cheaper rentals. So, for Burger King, India was the first engine, and Indonesia was meant to be the next. But so far, that bet has not really worked out. In the financial year 2026, Indonesia made up less than one-fifth of the company's consolidated revenue of over 2,820 crore rupees. Three years ago, it was nearly a third. Its store count fell from 186 to 162 And its restaurant beta has stayed negative for two straight years.