United Foodbrands Limited (formerly known as Barbeque-Nation Hospitality Limited) has reported a 2.6% sequential revenue growth to INR 305.00 crores in Q2 FY26, despite facing margin pressures. The company achieved positive Same Store Sales Growth (SSSG) of 0.8% excluding the Navratri impact, driven by transaction growth across both dine-in and delivery segments.

Key Financial Highlights

• Revenue: INR 305.00 crores (up 2.6% quarter-on-quarter)
• SSSG: 0.8% positive (excluding Navratri impact)
• Gross Margin: 66.2% (down 150 basis points)
• Restaurant Operating Margin (Pre-Ind AS): 8.2%
• Consolidated Reported EBITDA: INR 37.70 crores (12.4% margin)
• Adjusted Operating EBITDA: INR 3.30 crores (1.1% margin)

Segment Performance

Barbeque Nation India

• Revenue: INR 230.00 crores (0.5% quarter-on-quarter increase)
• SSSG: -1.1% (excluding Navratri)

International Business

• Revenue: INR 28.00 crores (27% year-on-year growth)
• SSSG: 8.4%
• Gross Margin: 72%
• Restaurant Operating Margin (Pre-Ind AS): ~18%

Premium Casual Dining Restaurant (CDR) Segment

• Revenue: INR 47.30 crores (17% year-on-year growth)
• Gross Margin: 73%
• Restaurant Operating Margin (Pre-Ind AS): ~13%

Expansion and Strategy

United Foodbrands added 6 new restaurants during the quarter, bringing its total network to 241 outlets. The company remains on track to open 35 restaurants in FY26 and is progressing towards its FY27 target of 300+ restaurants.

The company faced margin compression with gross margins declining 150 basis points to 66.2% due to value-based group offers and food festival costs. However, management maintained strict cost control, achieving a 6% reduction in overhead costs within the Barbeque India business.

Rahul Agrawal, CEO and Whole-Time Director, stated, "We are seeing some positive momentum in the consumption growth. Our focus remains on driving sustained volume growth across formats."

Outlook

Management expressed cautious optimism about future performance, citing positive transaction growth momentum and plans to focus on enhancing guest experience through culinary innovations and engagement activities. The company aims to improve margins through tactical adjustments to offerings, pricing, and cost structures, targeting mid-teens restaurant operating margins at a consolidated level.

United Foodbrands continues to see strong performance in its international operations and Premium CDR segment, which could help offset some of the challenges faced in the domestic market.

Investors should note that while the company is showing signs of recovery, it continues to face challenges in achieving consistent positive SSSG and margin improvement in its core Indian market. The management's strategies to drive transaction growth and control costs will be crucial in determining the company's financial performance in the coming quarters.

United Foodbrands Limited, formerly known as Barbeque-Nation Hospitality Limited, has taken a significant step to align employee interests with company growth by approving a substantial grant of Employee Stock Options (ESOPs). The company's Nomination and Remuneration Committee has greenlit the issuance of 1,88,500 stock options to eligible employees across the company and its subsidiaries.

ESOP Grant Details

The ESOP grant is structured across two existing plans:

All options under both plans are priced at Rs. 196.19 per option, which is based on the closing price of United Foodbrands' shares on the National Stock Exchange on November 10, 2025.

Key Features of the ESOP Grant

• Conversion Ratio: Each stock option is convertible into one equity share with a face value of Rs. 5.
• Vesting Period: 100% of the options will vest at the end of 3 years from the grant date.
• Vesting Conditions: The vesting is subject to fulfillment of pre-vesting conditions.
• Exercise Period: Employees will have a 5-year window from the vesting date to exercise their options.

This ESOP grant comes at a time when United Foodbrands is expanding its restaurant network. As of September 30, 2025, the company operated 241 restaurants, with a presence across metros, tier I, II, and III cities, as well as international locations.

The company's recent financial results for Q2 FY2026 showed a revenue from operations of Rs. 3,047.57 million, with a loss after tax of Rs. 225.02 million. This ESOP grant may be seen as a strategic move to retain talent and motivate employees during a period of expansion and financial challenges.

United Foodbrands' decision to offer ESOPs aligns with modern corporate practices aimed at fostering a sense of ownership among employees and potentially enhancing long-term value creation for all stakeholders.

As the company continues to navigate the competitive restaurant industry landscape, this ESOP grant may play a crucial role in attracting and retaining key talent, which is essential for executing its growth strategies and improving financial performance in the coming years.