Neutral Barbeque Nation Hospitality; target of Rs 870: Motilal Oswal

Motilal Oswal's research report on Barbeque Nation Hospitality

BARBEQUE’s 3QFY23 results were below expectations with subdued operating environment and higher-than-expected impact of new stores on margins, which led to absolute EBITDA declining ~6% YoY to INR620m (18% below our expectations). Management commentary on demand in Jan’23 did not offer scope for optimism from a near-term perspective.  Valuations are fair at 14.8x FY24E and 13.5x FY25 pre-Ind AS EV/EBITDA.

Outlook

We reiterate our Neutral rating on the stock with a TP of INR870, based on 14x FY25 Pre Ind-AS EV/EBITDA.