Buy Westlife Foodworld; target of Rs 1040: Emkay Global Financial

Emkay Global Financial's research report on Westlife Foodworld

Similar to JUBI, WESTLIFE reported a miss across all fronts – EBITDA came in 8-10% lower and PAT missed estimates by ~30%. SSG was weak at 1%, but relatively better than that of peers, as WESTLIFE indicated market-share gains. WESTLIFE expects gradual SSG recovery going ahead, but growth investments are likely to continue as the company sees this as a blip (2027 guidance was maintained). We remain confident about faster SSG recovery for WESTLIFE, given its historical SSG outperformance, multiple brand/channel extensions and focused strategy on catering more consumer occasions through the Burger, Chicken and Café offerings. Lower ticket size for WESTLIFE should also lend support in a weak macro environment.

Outlook

Our EBITDA estimates get cut by 6-11%, but we maintain our BUY rating with TP of Rs1,040/share (32x Dec-25E EBITDA), given our expectations of strong revenue/EBITDA CAGR of 15%/23% over FY23-26E. The stock has corrected 10% from its peak and further correction should be taken as an opportunity to enter.