Westlife FoodWorld reaffirmed its plan to expand the store network to 580-630 outlets by CY27, from 450 stores currently across 72 cities. The company remains on track to add 45-50 stores annually, with a focus on South India, smaller towns, and drive-thru formats.
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Dolat Capital Report
Westlife FoodWorld Ltd.’s Q2FY26 Revenue was in line, while Ebitda and APAT came below our estimate. Amid a challenging environment, Westlife FoodWorld reported a 2.8% same-store sales growth decline (vs 6.5% drop in Q2 FY25), while revenue grew 3.9% YoY driven by affordability initiatives and store additions. Encouragingly, SSSG showed MoM improvement in October.
The on-premise revenue grew by 5%, while off-premise business performance remained stable in Q2. The average annualized sales per store decreased by 2.4% YoY on TTM basis and stood at Rs 61.5 million.
We have downward revised our FY26/27E Ebitda estimate by 4.0/3.4% to factor in Q2 performance and challenging demand environment. We have also introduced FY28E Ebitda estimates.
We believe that demand would improve gradually from here on, supported by favorable base.
Valuing the stock at 21x FY28E EV/Ebitda, we arrive at a target price of Rs 666 (earlier Rs 793). Considering sharp correction in stock price since our last report, we upgrade to ‘Accumulate’ rating.
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Also Read: Gland Pharma Q2 Review — Motilal Oswal Hikes Target Price Post Inline Revenue; Maintains 'Buy'
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