Neutral Barbeque Nation Hospitality; target of Rs 650: Motilal Oswal

Motilal Oswal's research report on Barbeque Nation Hospitality

Barbeque Nation Hospitality (BARBEQUE) reported a weak performance in 1QFY24. Revenue grew 3% YoY while EBITDA declined 34% YoY. Lower SSSG and a contraction in GM resulted in a sharp moderation of 800bp YoY in EBITDA margin. Additionally, it closed four stores on a net basis. Demand outlook remains bleak and the management has reduced its new store opening guidance at 10 (net) in FY24 vs. 31 in FY23.

Outlook

The stock is currently trading at 72x FY25E EPS and 15x FY25E EV/EBITDA (pre-Ind-AS). We reiterate our Neutral rating on the stock with a TP of INR650, based on 14x FY25E EV/EBITDA (pre-Ind-AS).