Investec has initiated coverage on Westlife Foodworld Ltd with a 'buy' rating and a target price of Rs 923, which indicates an upside of nearly 25 percent over the March 14 closing price.
Shares of Westlife closed 3.4 percent higher at Rs 740 on March 14.
Investec said that the fast food restaurant holding company has built a sustainable flywheel of growth which includes store expansion, product innovation, format extension, and cost management.
The broking firm said that although FY24 has been a reset year due to a slowdown in demand and a high base, growth can be seen resuming from FY25.
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Investec sees an attractive market potential for Westlife and room for margin expansion. The longer-term store expansion and same-store sales growth (SSSG) opportunities also remain attractive, said the brokerage.
Investec expects Westlife's revenue and profit after tax (PAT) to record a compound annual growth rate (CAGR) of 17 percent and 43 percent over FY24-26.
Although shares of Westlife have gained over 10 percent in a year, they have fallen by nearly 25 percent in the past six months.
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