Moneycontrol
Feb 14, 2017 06:23 PM IST | Source: Moneycontrol.com

Buy Westlife Development; target of Rs 260: Axis Direct

HDFC Securities is bullish on Westlife Development has recommended buy rating on the stock with a target price of Rs 260 in its research report dated February 09, 2017.

 
 
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HDFC Securities' research report on Westlife Development


Sales grew 13% in Q3FY17 despite demonetization headwind. SSSg at 5% was positive for the sixth consecutive quarter. Gross margin remained constant at 60.4%. Staff costs grew 20% (up 70bps YoY) and occupancy and other costs grew 16% (up 80bps YoY). Restaurant operating margin declined 110bps to 12%.


Outlook


Management remains committed to increasing the store network to 450-500 McDonald’s restaurants and 300-350 McCafe’s by 2022. We believe store footprint expansion along with brand extensions and menu innovations will result in 18% sales CAGR over FY17-20E.Maintain BUY with a DCF-based revised TP of Rs 260 (Rs 265 earlier).

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