Emkay Global Financial's research report on Westlife Foodworld
Despite a weak Q4 base, lower sequential pickup at 11% in Q1 (vs. 13- 14% historically) points to the demand environment remaining sluggish. With strengthening of its value platform (Rs69 combos), WESTLIFE remains hopeful of an SSG turnaround in H2 which though is already built-in, and a pent-up surprise would only motivate investors in our view. ‘Vision 2027’ target of delivering Rs40-45bn sales at 18-20% EBITDA margin is intact, but delivery at the lower-end is more likely, given near-term challenges. We like Westlife’s aggressive store-expansion drive, digital investments, and differentiated dinein experience, but would await a better entry point before turning constructive again. EBITDA estimate is trimmed 2-3%, to factor-in the Q1 disappointment.
Outlook
We retain REDUCE on WESTLIFE and Jun-25E TP of Rs 875, due to a lackluster Q1 (9-10% EBITDA miss) and sequential SSG moderation (-6.7% vs. -5% in Q4).
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