Barbeque Nation Q2 Results Review - Weak Same-Store Sales Growth Hurts Earnings: Motilal Oswal

Motilal Oswal Report

Barbeque Nation Hospitality Ltd reported a weak performance in Q2 FY23. Its revenue and Ebitda declined 3% and 24% YoY, respectively, primarily due to an 11% decrease in same-store sales.

Improvement in gross margin (+190 basis points QoQ) cushioned the decline in Ebitda margin, which contracted 460 bp YoY. The net store additions were subdued in Q2.

Given the soft demand environment, management has cut its new store addition guidance to four (net) in FY24 from 31 in FY23, shutting down lossmaking stores.

Barbeque Nation plans to revive its store expansion strategy in FY25. It indicated that the last fortnight showcased early signs of recovery, which will be key to reviving the store-level profitability.

The stock is currently trading at 14 times FY25E enterprise value/Ebitda (pre-Ind-Accounting Standard).

We reiterate our 'Neutral' rating on the stock with a target price of Rs 650, based on 15 times FY25E EV/Ebitda (pre-Ind-AS).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.