Neutral Westlife Foodworld; target of Rs 800: Motilal Oswal

Motilal Oswal's research report on Westlife Foodworld

WLDL (Westlife Foodworld) reported a broadly in-line operating performance, supported by 14% SSSG and 10% store adds. While the operating performance was robust, a slight miss in revenue and EBITDA resulted in an 11% miss in PAT. The management anticipates a high single-digit SSSG and the addition of 40-45 new restaurants in FY24. The easing commodity pressures and the company’s focus on growing average unit volume are the key positive factors. This could be partly offset by an increase in royalty. We reiterate our Neutral rating on the stock.

Outlook

Our valuation at 28x pre-Ind AS FY25E EV/EBITDA leads to a TP of INR800. The easing of commodity pressure and the company’s focus on growing its average unit volume are the key positive factors. This could be partly offset by an increase in royalty. We reiterate our Neutral rating on the stock.