Neutral Barbeque Nation Hospitality; target of Rs 600: Motilal Oswal

Motilal Oswal's research report on Barbeque Nation Hospitality

Barbeque Nation (BBQN) delivered 6% revenue growth in 4QFY24, led by the expansion in both dine-in and delivery services. The company delivered SSSG of 1.4% YoY vs. -2.6% in 4QFY23 and -4.9% in 3QFY24. Dine-in revenue was up 3%, while delivery revenue rose 19% YoY. GM was healthy at 68.9% (+310bp YoY/100bp QoQ) and supported the overall operating performance. EBITDA margin improved by over 410bp YoY to 18.4%. The company posted PBT loss of INR9m vs. loss of INR125m in 4QFY23. The management is looking to add 25-30 stores in FY25 and 100 stores over the next three years.

Outlook

BBQN’s current valuation stands at 16.7x FY25E and 13.1x FY26E pre-Ind AS EV/EBITDA. We reiterate our Neutral rating on the stock with a TP of INR600, based on 16x FY26E Pre Ind-AS EV/EBITDA.