QSR Q2 Results Preview - Weakness In Demand, Margins To Persist: HDFC Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Institutional Equities.We believe that the quick service restaurant industry has multi-year growth potential, given India’s rising consumer base, eating-out frequency, quicker delivery and value-for-money proposition. However, given high inflation impacting consumer wallets, we do not expect growth recovery anytime soon. Moreover, the pressure on the operating margin will be significant. We are non-consensus in our estimates for FY24/FY25/FY26 and still see a downside risk to our estimates. We continue to like Westlife Foodworld Ltd. among its peers, a pure-play India QSR story with more legs for growth and margin improvement. We also like Jubilant FoodWorks Ltd. because of its reinvestment capabilities, superior delivery expertise, and best unit economics. Although we have 'Add' ratings on Westlife and Jubilant, the recent run-up also covers up the upside potential on both stocks. Devyani International Ltd. and Sapphire Foods India Ltd. both are seeing pressures on growth and margin, particularly for Pizza Hut. With superior control of KFC, we expect it to recover faster with limited downside risk. But Pizza Hut recovery is uncertain, both on growth and margin. Pizza Hut is still work in progress and the current demand environment will impact this franchise more than other settled brands. We have 'Reduce' ratings for Devyani and Sapphire..Click on the attachment to read the full report:.FMCG Q2 Results Preview - Muted Topline, Volume Growth Persists: Nirmal Bang.DISCLAIMERThis 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.

QSR Q2 Results Preview - Weakness In Demand, Margins To Persist: HDFC Securities

We continue to like Westlife Foodworld among its peers, a pure-play India QSR story with more legs for growth, margin improvement.

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