Good evening, everyone. On behalf of Motilal Aswal, I am Nabeen Trivedi. I would like to welcome you all to the Restaurant Brand Asia's 2QFI27 earnings conference call. From the management today, we have Mr. Rajivarman, all-time director and group CEO, Mr. Sumit Jhaveri, CEO, India Business, Mr. Kapil Grover, group CMO, Mr. Sandeep Deh, CEO, Indian Asia Business, and Mr. Gaurav Ajaan, head of corporate development in IR. I will now hand over the call to the management. Over to you, Gaurav.
Thanks, Naveen. Good evening, everyone. As we are using Zoom for the first time this quarter, I wanted to inform you of the flow of the meeting. We will start with the presentation by the management team, which you will be able to view on your screens as we move along. The presentation is also available on the stock exchanges, as well as the investor section of our website. Do note that we have a new corporate website with the address www.rbrandsasia.com. The presentation will be followed by Q&A. For Q&A, please use the raise hand option and we will announce the name and enable the microphone for that person. The speaker must also ensure that the mic is enabled at their end and then speak. After the question is over, the speaker's microphone will be disabled. In the interest of time, I request you to limit your questions to a maximum of two and rejoin the question queue if required. With that, I will hand over to Raj for his opening comments.
Thank you, Gaurav, and thank you, Nabeen. Folks, good evening to everyone, and thank you for your interest and passion around the restaurant brand-ish quarterly results. Welcome to this session. And you just heard Sumit Zaveri assigned to a new role. He's been promoted to lead the business here in India. Sandeep is also on the phone who leads the business in Indonesia. So with Sandeep and with Sumit Zaveri leading the two tall businesses, we will now proceed with the numbers and then let me talk to you about the strategic pillars that I usually talk to you about. First of all, just to give you a perspective, you see on your slide number, slide number, yeah, that's the one, right? Slide number four. So, you know, the India business, which is 607 restaurants, today, actually, we opened our 619th restaurant. So there's 619, but this is a quarterly 607 number. It's in 144 cities. In Indonesia, we have 137 restaurants in Birking and 25 Popeye's restaurants. Just to give you a perspective, revenue mix, which is 83% of the revenues actually come from the India business, and the balance 17% comes from Indonesia. By the end of March, this number will be more, over 90% of the business will be coming from the India business And the rest from the Indonesia business. Consolidated numbers that you see up there, you know, consolidated revenues were up 20% from 703 crores to 844 crores. Restaurant EBITDA, which is in INR of the year, from 53 crores to 92 crores, almost 91.8. And consolidated company-level EBITDA, which was 11.3 crores last year, same quarter, is at 43.2 crores Q2 of this quarter. So this is up 281%. Our restaurant-level EBITDA is up 73%. Revenue is up 20%. Store counts up 75. Restaurants in the consolidated scheme. Good slide, please. Just quickly, I speak about the strategic pillars. We have added a new pillar to our strategic pillars, as you can see in the middle, which is called families. I'll talk about it in a minute. But as you go through our strategy here in India, we continue to drive our value strategy. It's an integral part of who we are. This has been there from 2014 when we first entered the Indian market, and that we continue to be true to that value strategy. We continue to offer a program, which is right now two for 79, two for 99 on our app. And this continues recruiting new customers into our business. Our innovation platform, you saw the Peri Peri rollout right after Korean season two, which was followed by the season one that we had earlier. And each time we're doing these new innovations, we continue to see incremental sales coming in through this premium layer of ours. The Families Program is what we're launching this month, this in November, and you will start to experience, you know, over the next several months, the efforts around our family program, which will now become one of our pillars as we move forward as a business. In this, you will find a kids' family program that is being launched. You will also find some exciting stuff coming in very quickly, which Kapil will speak to in a few minutes. With the Avengers program, we have a whole family of products that we will be launching in the innovation or premium layer of this business. Digital, as you know, we have invested into this digital about five years ago. We continue to strengthen that. Self-ordering kiosks, our app, which is now live with our CRM engine, we continue to kind of drive that. App frequency is up about 7% year-over-year in Q2. You will find a lot of the digital elements, again, shared by Kapil as he speaks about the business there. But profitably, Pillar, you've seen some headwinds from the entire industry has seen headwinds when it comes to price and cost of groceries coming into our restaurants. But, you know, as we pedal through these headwinds, we have a slight drop in our gross margins of about 0.4, but not a very significant amount. And most of those efforts have been through fantastic work our supply chain is doing. And the efficiencies we are getting as we are building more restaurants around those DCs, which were, you know, low populated with restaurants. So as we continue to do that, we see those efficiencies. And those are the ones we are using to tackle the headwinds on pricing as well. On the other end, we continue to work. Nitin Bhayana and his team continues to work on broilers, on efficiencies, on solar, installing new equipment, which is energy efficient, all the way from lighting and all other tools that we are putting in place so that we reduce energy costs. One of the things you're saying is as energy costs are going up, we are actually bringing down the energy spending, and that's thanks to all the work that he's doing over there. So this basically, you know, tightening up the P&L, getting a better, you know, flow through coming out of the P&L on the EBITDA line, the fact that we are working on the CapEx as well, you know, helps us, you know, expand from building, you know, what we were building in the past 50 to 70 restaurants to potentially go up to 80 to 100 restaurants in the future. So you will start hearing more from us as we go into the next few quarters. Now let's go to the India strategic, Indonesia strategic slides. Again, Indonesia, we have been at the value, you know, trusting value in several markets. We have tried a few programs, and finally, we finally did hit the nail on the head with this Super Hemat that we launched. We launched this in late September, and we have seen some fantastic results. In fact, we have added about 35 to 40 additional traffic per day per restaurant with just this program, and we are extremely excited about this. I think this program, as we continue building this over the next few years, will become one of the cornerstones of recruiting back customers that we had lost in the past. So a very, very strong platform. Well done to Sandeep and his entire team. Namita and Aditya have pulled this value platform very well, and they continue to kind of get this strengthened as we move forward. Innovations, you know, Indonesia has always been strong in innovation area, whether it comes to the whole chicken, which they launched about a year ago, Nusantara. But now, you know, the premium selection with the Boss Whopper and the Boss Collection is something that they're working on, and it's doing very well. And I think this is a platform we're going to continue to build. Just like in India, we had Korean 1.0, Korean 2.0, the Peri-Peri, and then you'll now see the Avengers platform. We have started this platform here with the Boss Whopper, and then you will see this continuing to build over there. Digital assets, we started installing SOKs a few months back in Indonesia. We have seen some significant progress with that. We will be completing this project by March with some additional SOCs installed, and then we are instilling the same software and the same kind of customer journey that we're doing in India, also in Indonesia. So that's going to continue strengthening that. And then the levers of CRM and our app in Indonesia, those will be very much aligned to what we are doing here in India as well. On the profitability front, we had worked and I've been sharing with you a lot of work that we have done on profitability. But the stuff that we have done in India, whether it comes to energy efficiency, equipment efficiency, solar, and the profitability that we are working in the India market, we're now transferring those learnings over to Indonesia and a lot of progress. And I think we will make significant changes to that by the end of November. And then the last quarter, which is January, Feb, March, I think we will finish most of those changes that we are doing there in the profitability and align it very much close to India. So, a lot of work over there, and we'll keep informing you, keep updating you as we do the work over there. Asset upgrade is a pillar that's going to be there in Indonesia for the next six months, maybe even slightly longer. And what we're doing over there is, again, some of the equipment, energy-efficient equipment that's going in there, We have air conditioning units, which were all being removed and replaced with the right new energy efficient HVAC units, kitchen equipment upgrade. Also, the front of the house, customer touch areas, where, you know, lighting, when it comes to signages, where it comes to, you know, washrooms and so forth. A lot of work is going on in upgrading the asset over there. We have got a very strong value platform that's working, a strong innovation program that was working in the past, but getting stronger with every quarter. Digital that we have just recently launched and that we are going to continue to strengthen. Profitability pillar to be aligned with India with all the work that we're doing here will be transferred by Nitin over to the team in Indonesia. And then the asset upgrade. I think a very strong recipe for a very strong parking, you know, Indonesia turnaround and progress over there. So with that said, I think I will turn over to, and I'll come back and then take all your questions, but I'm going to hand it over to Sumit to kind of walk you through the financial numbers. And then we will address any questions after Kapil finishes up with the marketing section. So over to you.
Thank you. Thank you, Raj. This is our first attempt to do a video conference so that when we are talking, participants are also able to see the numbers as we speak. We are really happy to share with you a very strong performance for the quarter. It is the second consecutive quarter with a very strong SSG growth of 14% for the quarter with a radius of like 31,000, similar to what we had achieved in quarter one with revenue now crossing 700 crores with a year-on-year growth of 24%. What we are really proud of, and we will continue to build on, is the 55 crore company EBITDA number that we've achieved for the quarter. It's at 7.8% of our heavily. While we kind of share with you the numbers that we've achieved for quarter, just to take you through the journey that we've taken over these last five quarters as far as Burger King India is concerned. As you all can see, we've got to 600 restaurants. We have a very strong pipeline to continue to take this journey forward for growth. As Raj earlier mentioned, we are already at 619. This month, we've already opened 12 stores, and we'll continue to kind of grow at a good pace going forward. This is obviously supported, and the confidence to grow is also strongly supported by our overall growth in profitability that we've seen, almost doubling the profits at the company level from what we had last year, from 28 crores to 55 crores, with very strong SSG of 12.6% and 14%. We do understand that strong SSHC performance is strong growth. We need to make sure that we are able to build on to that. And that was one of the reasons why the strategic pillars rather becomes very, very critical for us. We are able to build on to the momentum that we have on our side, and we don't want to make it to a level where we start, we are not able to build any further, which is one of the reasons why we've added one more pillar of family starting from this quarter. And you will continue to see the effort that we would put as a team to make sure that we are able to continue to grow this business going forward. As far as restaurant appetizer is concerned, as you can see, we had a very strong 13% levels now over the last few quarters. But if we look at it from the perspective of last year, a very clear 2.5% improvement in profitability at a restaurant level and 2.8% improvement in profitability at a company level. Going on to the Indonesia side of the business. In Indonesia, as you all know, we've got two brands, total store count of 162. We've just added one store, which was more transfer of a store from one part of the mall to the other part of the mall, since it just took longer, and that's why it's showing it as one more new store added. In terms of INR value, both the brands ADS stands at 96,000, with consolidated revenue for Indonesia business at 139 crores. At a restaurant level, obviously, we were closer to break-even, a little higher than break-even, with a marginal INR 8 million restaurant capita that we made, which is still a big shift because last year during the same quarter, We were negative in terms of our restaurant EBITDA, and we continue to kind of also improve or perform better over last year at a company EBITDA level, while it is a loss of 12 crores, but an improvement by 5 crores or 551 million over last year's importer. Just quickly diving into the two brands' performance. As Raj mentioned, we are obviously very, very strongly focusing on the Barrier King side of the business. We've already launched the value campaign of Super Amat, showing very good results in terms of transaction growth in Indonesia, Barrier King Indonesia. And we believe that with the other layers on the innovation side and the investment on digital side, we should be able to kind of start moving towards improving overall performance as far as Burger King Indonesia is concerned. And it is now consistently over the last three quarters generating positive habitat at a restaurant level. So at least it is clearly showing the early signs of building on or early signs of showing improvement and overall results. Quickly, going further into the Popeyes part of the business, this is one business where obviously We continue to have the drag, and the ADSs have been sliding down. Last quarter, we were at 64,000, revenue at around 15 crores. So it's very marginal in terms of overall revenue side is concerned. But our bigger issue that we need to address is the performance of the brand at the restaurant EBITDA level, which is what we are currently working on. To get to a resolution as far as Popeyes is concerned, we are in active discussion with the brand owners as well, to find a suitable answer as far as Popeyes is concerned. So, all in all, if I was to just quickly summarize before I could, before I hand it over to Kapil, is that India will continue to grow strongly. Obviously, with the floor EBITDA and the company EBITDA continues to perform at good levels, plus over 50 crores of floor EBITDA even for the quarter. But I think Indonesia is starting to show signs of improvement and early results in October. From ADT perspective, our indications, obviously, we're not sharing those numbers with you, but very clear indications of improvement in that. And Popeyes is something we need to find. We need to make sure that we have answers to that quickly enough. So with that, I'll just hand it over to Kapil to take us through some of the focus areas that we have on marketing.
Thanks, Amit, and very good evening to all of you. Just reiterating our focus on the key strategic pillars, value remains a key priority for us. The highlight is that with 2479.99 available on app, we've consistently driven this program over the last couple of several years. And this is our 14th consecutive quarter of positive dine-in traffic growth. In the environment that we've seen, this is a fairly strong performance on the dine-in traffic side. The other dimension of our value program is the app, which is our dine-in crazy app deals. Now, we've seen 7% increase in frequency year on year in the same quarter of people using our app to, you know, Claim these deals that are available only on Berkling app. That's on the value front. On the innovation side, we've continued to drive flavor innovation on the premium end to build our trade credentials. Now, Korean Season 1 was a strong performance. Korean Season 2 that came in quarter one this year was 30% better volumes than Korean Season 1. And PeriPeri helped us deliver 30% better volumes than Korean Season 2. So this journey now continues on flavor innovation. And as, you know, Raj mentioned, the one that's coming soon, I'll sort of, you know, share a little teaser with you. Please look up on working app in the next few days. You will see a pre-book of a partnership with Avengers. This is a full integration of product, packaging, you know, a complete program. And I'm hoping that you'll be at our stores to experience this starting tomorrow. The pre-booking starts and third, we actually launched a program across all our stores. The other piece we want to continue to build on is our awareness around trust and taste, our program around quality initiatives. In this heightened awareness around this subject, we continue to share with our consumers and our stakeholders that our food has no synthetic colors or artificial flavors. It matters a lot to today's consumers, the Gen Z and the Gen Alpha, and we continue to reiterate that promise to our guests who come and enjoy their food at working. We continue to build, if you go to the next slide, please, we continue to build restaurants, so 600 stores. We celebrated that this quarter. This was a store in Delhi, and we launched the store with a lot of fanfare and reached a big milestone of 600 restaurants in the country, and the growth continues from here on.
So, we've just put the financial performance for the quarter, which I'm sure you all would have gone to. I've already spoken about the numbers through which we measure our performance. Obviously, we've also shared the reported numbers. So, with that, we would rather open up for questions.
Yeah, thanks. We will now begin with the question and answer session. Please use the raise hand option to join the question queue. It will also be great if you can mention your company name before asking your question. The first question is from the line of Dwanil Desai. Dwanil, we've unmuted you. Please unmute yourself and ask your question.
Hi. Good evening, everyone. Am I audible?
Yes, Vanil, you're audible. Please go ahead.
Yeah, so first, congratulations for a very, very strong numbers, you know, through both consecutive quarters, and kudos to the entire team for that. So my first question is, you know, I think last four or five quarters, you know, I think our SSSG has been doing progressively better. But our restaurant EBITDA has remained in that 13% odd range. So, if the environment remains supportive, do we see the path to 15% kind of EBITDA margin and double-digit, you know, company-level EBITDA, you know, how should we look at that path going forward in next four to six quarters? Yeah.
Mr. Desai, thank you for your question. Appreciate it. Yes, you're right that we have been hovering at the EBITDA level around that mark of 13%. Look, SSSG is one of those top revenue numbers, but we continue to also open new restaurants that come in at lower radiuses and lower margins that continue to kind of dilute that number. But more importantly, we have been scaling some of the headwinds, whether it was on the gross margin line or the utility line. And all those effects, I think, will start to see some positives. But I think the future volumes increases through our family program and the kids program that's coming in December. Those volumes will leverage those numbers.
So, those numbers, you know, top-line numbers will provide the leverage that you will see as you move forward. Efficiencies will continue, but I think do not expect that the rate will be the same. I think we have made a very efficient system, as you would appreciate, that at our current volumes, we rally the same industry numbers that others do. So we'll continue to improve on them, but you will now start seeing EBITDA number hovering over 13%, And then, like you said, getting to 15%, coming through volumes as we kind of start to build volumes.
Very clear, Raj. And the second question is on the overall environment, I think across all QSR companies, the commentary is that the environment continues to remain supportive even in October, and we're expecting good festive. So, do we expect this kind of a double-digit SSSG momentum to continue going into Q3 and Q4? Your thoughts on that?
Danil, I can't make a forward-looking statement right now. We just started the quarter, but I can just tell you that we are very happy with the way we started the quarter.
Operator
Great. Thank you. I'll come back in the queue. Thank you, Danil. The next question is from the line of Ankit Gupta. Ankit, please go ahead. Ankit, would you like to ask a question? Okay, we'll move to the next participant. The next question is from the line of Viraj Mehta. Viraj, you're left on mute.
Yes, Viraj, we can hear you. Please go ahead.
Yeah. Hi. So, my first question is on gross margin. We saw slight dip quarter on quarter in a gross margin, probably a few basis point. Can you talk to us about what steps are you taking for the gross margins to kind of improve from here on? Or is it that you don't think our gross margins will really improve, but it is only operating leverage which will kick in and improve our EBITDA margins to 15%, as you mentioned?
So, of course, you would appreciate that the leverage will not change the gross margin, but it will, of course, as you said, move the EBITDA number forward. But there's a very strong, nice forward plan on gross margin as well that we are working on. Like I said, as we build these restaurants and we have got, you know, a whole bunch of openings that will be coming this quarter and the next quarter, these will bring down transportation costs and actually provide some, you know, relief to some of the markets which have higher food costs because of, you know, distribution costs. Those markets will experience a lower distribution cost and hence a better gross margin. So that leverage will continue. That continues. Usually you do see those things come around as we build more and more restaurants around those DCs. But there's also kind of a long-term strategic thinking on both the proteins, chicken, as well as, you know, the vegetarian menu, where we have got some work in process that we will continue to do. So we do see some progress there. We had some, you know, dip. It was a very small dip, but it was a dip. And this dip was, you know, because of the headwinds that we saw on chicken that happened suddenly in the entire market. I don't think this is going to be long term. I think we will see this recede back and we should be able to get you some kind of leverage moving forward as well.
Sure, sure. And so my second question was, and I know for us, it is a little less relevant, but for a lot of other USIs, Navratri is a festival which is important because the footfalls drop in Navratri. So, and they also gave SSG number, which was X of Navratri, this, and so just wanted to understand for us, even though it matters less, but given the Navratri has been shifted from Q2 to Q3, if we were to see like to like, how much lower the SSG would have been if Navratri was in the same quarter?
So, you know, to be honest with you, you know, we have just started this quarter and Navratri fell in this quarter in October. Last year it was in September and so was Shrad. Shrad also kind of moved here. But like I was telling earlier to the other speaker, we actually have started the quarter very well. We are very happy about it. We'll share the numbers for this quarter when the quarter is over.
No, no, I'm not asking for Q3. I'm asking if Navratri would have been in Q2, your SSG would have been 14%. It is 14 right now. So, would it have been like 12, 13, 11? Do you have any sense? Because for most QSRs, the footfalls dropped by anywhere between 15 to 25% in Navratri. So, how does it impact us given that Navratri was not there in Q2 and it gave a bump up to our SSG is what I want to understand.
Yeah, so Navaratri doesn't have that kind of impact. I know where your question is coming from. See, we have a very balanced menu with veg and non-veg, and so we don't see that big a dip during Navaratri. You see a small, you know, receding, but this year, I can tell you that the impacts have been minimal and, you know, the upflow, the increase in the traffic into the restaurant has overcome all those significantly. So, you know, I don't think our numbers would have been any different than what we have reported if Navaratri was there as well.
Right. And my last question is on capability building. You talked about significant increase in opening of the restaurants, especially next year, and a large increase when you look at, you know, when we did such a large expansion last time, there was a disproportionate increase. And I understand it was a different management, but there was a disproportionate increase in the rental costs, and some of the stores were much less profitable than earlier expectation. What have we done this time that we do not see a large part of those mistakes repeating next year? And what capabilities are we building in terms of people, in terms of checks and balances, so that that doesn't happen again?
Look, first of all, I'll just make one comment and then turn it over to Sumit, who leads the growth function, to make a significant contribution to this question. First of all, the management is the same. We haven't changed the management. The promoters are new. Look, we have always, as a company, grown responsibly, right? We call it responsible growth. We're not going to go away from that. We're not going to suddenly go a cowboy approach on our expansion moving forward. And there's no intentions on going radical and doing expansion that's not thought out, not fully structured. Sumit will tell you in a minute how the pipeline is built and how the pipeline is already ready for next year. So it's not that we are kind of rushing to build restaurant. It's because we find the opportunity, and it's the right thing, and it's going to help this brand actually grow stronger with more EBITDA and more, you know, company-level EBITDA margins. That's why this potential opportunity of potentially going from, you know, 70, 60, 70 restaurants to maybe 80 to 100 restaurants somewhere in that neighborhood is potentially possible. Sumit, you want to add something?
Yeah, just a couple of things, Viraj. Well, firstly, we have made certain ways in which we've been looking at growth. One is, first, obviously, we started with resizing the overall opportunity, which gives us a confidence that there is sufficiently large opportunity that is existing as far as the countries. Secondly, we've kind of obviously invested in the team to make sure that the growth becomes much more uniform right through the years. You would have seen the growth that we have in this quarter, and it has started to kind of becoming much more balanced starting from August, August, September. And then, as we mentioned at the beginning as well, October, we've already opened 12 stores. So we are kind of going in with much more linear growth approach rather than the bulked-up growth approach towards the end of the quarter, which ensures that there is enough concentration that happens in every single site that gets opened. And obviously, we've always had our own evaluation matrix with respect to payback and return. And those continues to be there. And then we started building the pipeline way ahead in terms of our plan. So we are literally now starting to look at pipelines for over six to eight quarters, then to kind of trying to address the growth for the year. There are substantial shifts that we made which make sure that we can not only grow at a better pace, But make sure that the decisions of investments are also in the right directions. And what also happens, Viraj, is that you've obviously seen now our store EBITDA is at 13%. Obviously, there is upside to be taken with respect to leverage. But if you see the focus on profitability with working on various other lines on utilities, It will also help us improve the overall performance, building more confidence and to be able to grow more confidently as we go along. So, there is enough checks and balances and overall improvement in business, which makes us believe that we will be able to grow profitably.
Operator
Thank you so much. And that's enough, Laksha.
Operator
Thank you, Viraj. Next question is from the line of Devanshu Bansal.
Devanshub, please unmute yourself.
Yes, Devanshub. Go ahead.
Congratulations on very strong performance. Sir, I wanted to check the SSGs are pretty strong, whether there is a difference between SSTG and SSG for us, and how has this difference sort of panned out over the last four, five quarters for us?
Yeah, Devanshu, as you know, we don't share SSTG numbers, but I can tell you that all our growth is coming through traffic as it has been for the last 14 quarters, as Kapil was pointing out earlier. We continue to grow through traffic, and that's the discipline of the first pillar that we have, which is value and recruiting more and more people into the value and innovation, which continues to recruit more people. So we continue to grow through traffic, not through check. In fact, I think for the last many quarters, our check has remained there or thereabouts the same. So it's all coming through traffic.
So, why I asked this question was to better understand if there are mining opportunities. Obviously, you are getting very strong footfalls at your stores. So, can mining be the next lever of SSG growth is what I wanted to maybe qualitatively understand.
You mentioned mining. We didn't get you there.
Mining in a way that, suppose, a customer is coming and spending, say, $100, whether we see him spending $105, $110, from that perspective, I was asking.
Devansh, the next, you know, maybe several years or so, I think the focus of this company and this team is going to be on trafficking rates. I think there is potential to continue to do that for a long time to come. And I think that's where our focus is going to be. The appreciation on check is contingent to the 4-5% that industry takes in pricing on an annual basis. That will continue. There's no two ways about that. We continue to think in the same tune as we have done in the past. But our focus as a team, this company's focus will continue to be building traffic and building sales through traffic. That's where we are going to be focused. We do have the family's pillar. We do have the premium pillar that we have on the LTOs, which we run. Those continue to kind of build up, and you will see some check appreciation as more and more people kind of indulge in that pillar of our business. But that's not the intention, is not to try to drive, you know, more out of the same customer. It's about to bring different types of customers into our business, and families will give you some check. The innovations pillar will give you some check because Peri Peri and Korean, we're all in the 200 rupees range as products. So those will give you a check. And as those burgers continue to grow, as Kapil was saying, there was a 30% increase in the quantity we sold year over year from season Korean 1 to 2 to Peri Peri. And as that grows, that will continue to drive more check in there. But the intention of the team is to continue growing it through traffic.
Got it. And just a small bit, I wanted to check if in our P&L, the cost inflation is largely baked in in Q2 numbers or there are certain line items where it has not been fully booked in? And if you could just comment, because inflation is around food, employee and utility, right? So if you could just throw some comments there.
So the entire inflation impact, whichever lines that we've had, has obviously been completely taken care of in our quarterly results that we've announced. Rather, Devangshu, we would really want to kind of mention that the efficiency work or efforts that we've kind of put into our overall P&L, especially, let's say, the line of utilities, and we've been talking about this and we make some investments, we've literally been able to negate the entire inflation impact. And this is nothing to do with leverage. I'm talking purely from the perspective of the effort that the team has put in in order to offset the overall inflation impact. I did hear you talking about labor as well. And yes, this has been a point of discussion. I can assure you that in any case, when we always plan our year, we do reasonably kind of plan for inflation on the labor side, especially minimum wages, because we've seen the trends. So, they're absolutely fully taken care of, and we can tell you that it's not a number or an inflationary impact which upsets our P&L, because we plan accordingly when we really kind of start at the beginning of the year, including some of the higher impacts that could come our way. Efficiency is going to be one of the key levers for us to continue to grow with as far as our P&L is concerned. On the gross margins, we were at around 70.4%, 70.5%. We believe strongly about those levels, and then we will see how we take this journey forward to improve from that levels. We obviously have our at least path defined. Yes, it is unlikely to be linear, as we've always been mentioned, but we would take the journey forward when we kind of start to see the buildup to be being able to build up from the current level. But we do feel very strongly about the current levels of margins that we have.
Thank you. Thank you, sir, for these detailed answers. All the best to the team.
Operator
Thank you, Devanshu. The next question is from the line of Manjeet Buhariya.
Operator
Manjeet, please go ahead. Yes, Manjeet, you're audible.
You can just speak slightly louder. Okay.
Thank you. Good evening, everyone. And first, appreciate the consistent effort over the past many years. We came into a very strong franchise. Thank you for that. Just one question. How is the team thinking about allocating the excess capital which we now have after the primary race between seeding some new brand in India versus acquiring some existing platform? If you've had some chance to discuss this and have some framework around it. Thank you.
Thank you, Manjeet. I think this question came up last time as well. See, the promoters just came in in July, and the entire capital, so there's some capital to come in as well with the warrants. Yes. So we are working together with the promoters. We will come back, as I said, on the last quarter with a very robust plan on how we're going to move forward with that. But right now, you know, we are strengthening our business here. There's a growth potential over here. We are investing in our, you know, infrastructure in terms of, you know, utilities, efficiency in our equipment that we are using. That work is continuing. We are also making Indonesia business very strong. So we continue to do that, and we will come out with a plan for that capital. So, rest assured, we are very excited about it, but we will do a responsible plan and then we will share it at due time with you.
Okay. And just one more question on Indonesia. You know, I think I read in today's release that if I'm not mistaken, we are going to sort of put primary capital of 130 Indian crore rupees in that. Am I right?
So, you're right, Manjit. So, this was something which we had planned at the start of the year. We're just seeking approvals from the board as we kind of start to see some milestones being hit as far as Indonesia business is concerned. But some part of it was always planned from the perspective of supporting the business from loss and working capital improvement. One of the pillars that Raj was mentioning when he took us through the Indonesia part was to improve the overall quality of existing asset that we have in Indonesia. With a shift in performance in the Burger King side, the almost 35 ADT growths now visible in Nikkei Indonesia business, we feel that we should start looking at improving the quality of asset in Indonesia. And hence, we've set that money aside for improving the quality of asset. That's actually the plan. And obviously, we've taken the approval for the entire money that could go in. You would not see us remitting the entire block at one go. It will go in tranches based on the milestones or based on the performances that we would want the Burger King business to, Indonesia business to kind of continue to achieve. So, yes, what you read or what we have made an announcement is absolutely correct, Pajeej, from your side. But it is going to be done on the basis of need and as we take the entire Burger King Indonesia business forward.
And Sumit, we had sort of stopped expanding Burger King India because we wanted to fix the basics. And I think data is showing that, you know, we sort of have stemmed losses. Restaurants are, you know, consistently profitable at that level. So, do we envisage starting to grow Burger King Indonesia again in terms of stores, etc. over the next 3-4 years?
So, we are still not put up the plan for growth of any new stores in Burger King Indonesia, Manjeet. At this point in time, still the focus is going to be how do we strengthen the existing business there. We will, you know, once we've kind of completed the cycle of improving the overall asset quality and see how the overall performance of Indonesia kind of start to stack up, we will go back and then at that point in time, go back and revisit from the growth perspective. So, at this point in time, we still believe that growth by ending new stores is still not an immediate strategic priority as far as Burger King Indonesia is concerned.
Thank you. Thank you for taking the questions.
Operator
Thank you, Manjeet. Next question is from the line of Dheria Trivedi. Dheria, please go ahead. Dheria, we can't hear you. You're unmuted.
Yes, Dheria, you're audible now.
Yeah, so congratulations on a very strong set of numbers. All my other questions have been answered. Just had one bookkeeping question. What is the current cash on the balance sheet as of H1, FY27?
So, the idea of the capital that got infused by the primary capital, that is the level of liquidity that we have on our balance sheet. The amounts are obviously sitting, might be sitting in multiple lines in terms of cash and liquidity investments that we would have placed. But the total amount that we have on our balance sheet is close to 1,000 crores. And then, obviously, there is another warrants that could give us another 450-odd crores of cash. So, liquidity is at 1,000.
Sure. And how much of that are we planning to use it in expansion?
Currently, like you said, our EBITDA is going to provide us enough money to build restaurants next year. If we do plan to accelerate that growth, we will look at that. But currently, there's no plan to use that capital for growth in India at all. So, you know, we will make a plan, robust plan, we will share, you know, whether it is acceleration in BK front or whatever those strategies are, we will share with you. Like I said, the promoters are just in July and we are working very closely with them to formulate a forward strategy for those funds.
Sure. And just one last question. I mean, is our focus only on Burger King India with, you know, these funds? Or are we looking at something else also?
Daria, again, we will come back to you on that as we formulate that strategy. Currently, we are just having good conversations. Once we start solidifying conversations, we will put the strategy together.
Sure. Thank you and all the best.
Operator
The next question is from the line of Naveen Kaushik. Naveen, please go ahead.
Bye. Yeah, hi. Congratulations on a good set of numbers. So I just want to ask my first question on the gross margins. So essentially, my understanding is that for the last few quarters, the line items are rather the constituents that are helping us improve our gross margins have been pretty much consistent, you know, the broilers and like the energy efficiency initiatives and all that stuff. So and like, you know, what we've seen is we've kind of comfortably overachieved on the targets we set before. So, this is a small two-part question that I want to understand what went better than we expected when we set the targets for the 69% gross margin by FI29, if I remember correctly. And what other things do you see helping us kind of move the gross margin up from here? So, I'm not expecting any numbers, just want to know what you see on the table with respect to gross margins for the next three, four years, maybe.
Good thought process, Navin. You're thinking almost like how we are thinking here as a team as well, right? So see, some of this stuff that we are doing right now, whether it's on the solar, whether it's on the energy efficient equipment, this is continuing, right? We will start realizing a lot of this going into the next year. The lower part of these line items, you will continue to see margin improvement, expansion in every line item over there, right? Now, when it comes to gross margin, you know, because of a cluster approach, there is benefits on that cluster approach itself, right? When we build more restaurants around D.C., we find those benefits rolled down to those restaurants because the ship is becoming bigger and bigger. So when you see those in few restaurants, the magnitude on the entire P&L is smaller, not visible sometimes. But those efforts continue and those restaurants continue to add value as they kind of grow around the D.C.'s. But there is also, organically, you see, when you start buying for 800 restaurants versus 600 restaurants, your ability to leverage on scale kicks in. And those leverages will continue, right? Those will not stop. And we've got a very strong supply team. We just got Deepa into our team just recently. She has come in with some splendid ideas. Then there's always a constant work on improving our existing packaging and so forth. So those efforts continue. We have got internal targets. The supply chain has and the team has. And those are something that we take very seriously and continue to deliver on an annual basis. So you will see some progress in that direction as we move forward. And then a lot of stuff will come through leverage as we kind of continue to build volumes.
Thank God. That's been very clear. My next question and my final question is on the Indonesia business. Now, I just want to understand two different viewpoints on what's been going on, right? So I'm not trying to question our views on the potential for that market, our current views, and our views when we acquired the business. I think all that is very clear. What I'm trying to understand is, so we've infused a certain amount of, we acquired the business with a certain amount of money. We've infused a certain amount of money into the business, and we're at a particular position in the business that is not quite strong, in my opinion. Please feel free to disagree on that. And my entire understanding is how do we view this dynamic, you know, as a, you know, management and maybe some thoughts of the new promoters on this dynamic as well. So, you know, with respect to numbers, is there any expectation on how much this equity investment is supposed to do? Or is there any aspiration, target, like from that perspective? Thanks a lot.
Yeah, I mean, very good question, actually, and feel free to ask that. Look, you know, we have worked very hard in Indonesia and in very difficult circumstances, right? We had the boycott number one, and then we had the boycott number two. Luckily, these things are so far behind now in Indonesia. I'm not just talking about our business. I'm talking about the industry at large. And I'm talking about the Western USR industry at large has started moving in the north direction quite rapidly. And this new, you know, promotion that we just started a few weeks back and a little over a month has started to give us kind of results that we never imagined, right? And some of it is because the industry is moving in the right direction and the effects of the boycotts are far and behind us from the customer perspective. Those sentiments are gone, long gone. So some of the tailwinds are from there, but also a very strong promotion that Sandeep and his team has put together, which is doing really well. Now, as we saw these things, we are now looking at the asset. And, you know, and a lot of the things that we're doing to improve the asset is going to help drive more traffic into the restaurant and more repeated frequency into those restaurants, right? So we feel very strongly about where we are now. You're right in saying that the business was not strong. In fact, it was far from being strong in the past. But we see these green shoots and we see this moving forward. We haven't made an investment into the asset in the past because we didn't see the traffic. We tried several, you know, value promotions and value, you know, strategies over there. We did not make any progress because every time we did something, there would be a boycott or there would be some kind of uprising there that would negate a lot of our efforts. But what we've seen in the last, you know, six weeks or so is a dramatic increase in traffic into our restaurant. In fact, the outskirt restaurants are doing far more than even 35 traffic per day per restaurant increase. And this is really good welcome news. If you go back and look back at this business when it was, you know, pre-COVID, this used to be a business that drove 15% restaurant-level EBITDA. This was a business that had an 80s of 27 million, you know, idea on a daily basis per restaurant. So we think that there is some good momentum, and we would like to now support that momentum by doing all the right things with our assets. And I think we can build this into a strong business. And we are doing this very disciplined, with a lot of sincerity, that we think that this is going to go in the right direction. We should actually stand behind the team and move this and capitalize on what we invested far along four years ago, over four years ago. Now, I think it's a good time for us to not shy away from this, but to double down and actually build a very strong business for the future.
That's very clear, sir. Just one small follow-up maybe on that. So, in addition to the strength in the business that you're seeing, is there any financial metric with respect to the return on The invested capital that we look at, like, is there something along those lines that we also judge before making capital allocation decisions for this business?
You know, the current, you know, like Sumit was saying earlier, we're not building new restaurants over there right now. We have no plans to do that this year. We have no plans to do that next year. There's no plans to do that. The plans are to fix the current assets, to get the sales as close as possible to where We used to be in the past to start to get the margins, the EBITDA margins, back to where they were at the past. The investment in marketing is to bring the sales back to where it was in the past. So those are the efforts. So our results will be, the efforts and the results will be tallied on the fact that how close we get there, how do we get back to that 15% EBITDA margin, And how do we get back to that 27 million ADS? The target that I'd set with the team over there before I came full, honest, you know, sharing with you is to improve every restaurant on a daily basis by 5 million IDR per day per restaurant. That's the target we have set with the team as we have come in. And all the efforts and all the investment that are going into the assets, into marketing, into all the promotions we're doing there, is to get first capitalized that $5 million. We're sitting at a ride of about $19-20 million 80s. That gets us to about $25 million 80s. That will give us a fantastic restaurant level.
Thank God. It's very clear. Thanks a lot. And all the best for a good quarter ahead.
Thank you, Naveen. That was the last question for the day. Raj, any closing comments?
Thank you. Thank you, Raj, for this. One is, we are as a team, honestly, very happy with the way your business is building. It's not just about the performance that you've delivered for the portal, but also the way we build, we are getting ready to make sure that we are able to continue to the momentum that we have on our side. We can only assure you that we are not kind of thinking that this is a result of the external factors purely at the back of the shift in the overall external factors. But we are getting ourselves ready. And you saw one of the glimpse of what Kapil mentioned about through the co-branded program that we are talking about. We are getting ourselves ready, not just for coming quarters, but for the quarters to come, saying that how do we continue to build onto the momentum that we have on our side? And that is something, is the thinking that we will continue to have, whether it is on the revenue side as we go forward or on the efficiency side as we grow forward. So we will not sit purely on the back of saying that the momentum is there on our side and so we will continue to do better. That's not the thinking with which we are going ahead with. We are going to push ourselves hard to make sure that the momentum adds on to the effort that we put at our team. With that, thank you very much for continued support that you've always had as investors or as friends or as guests or customers. Because the last thing that I would do is with all the effort that our team has put in, we would really want you all to see into our restaurants as we go into the festive season. And all the best and all the good news for the coming festive from everybody on this side. Thank you.
See you in our restaurants. Thank you very much.
Thank you very much. Thank you all for joining in. You may now disconnect your lines. Thank you.
Thank you. Thank you, everyone.
