Emkay Global Financial's research report on Westlife Foodworld
We upgrade Westlife to BUY (from Add), as it offers an improving growth/margin trajectory at an attractive entry point. Q3 EBITDA came at a marginal 4-5% miss on higher marketing spends, but strong initiatives toward enhancing its Value (meals), Chicken (South), and Café offerings should drive better growth/margins here-on. The company’s strategy is seeing initial signs of success, as Q3 SSG of ~3% was a mix of strong traction across specific regions and a lull across the rest, where it is taking corrective actions. Despite a muted FY24/25, the company upheld its 5-Y Vision 2027 which implies topline CAGR of 17-22%, along with annual margin gain of 150-200bps over FY25-28. Given historical precedents of strong turnarounds,
Outlook
We currently factor in the lower end of the outlook (35% EBITDA CAGR) and upgrade to BUY. We make no material earnings revision, and maintain TP at Rs875 (33x Dec-26 EBITDA).
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