Khambatta Securities has given Buy recommendation for Burger King India with a target price of Rs. 217 in its research report issued on May 28, 2021
Khambatta Securities’ research report on Burger King India
Burger King India Limited’s (BKIL’s) revenues revived further in 4Q FY21 (+20% q-o-q). Monthly average daily sales (ADS) recovery continued to witness strong upward momentum during January to March 2021, clocking 85%, 92% and 111% on a y-o-y basis. Same store sales (SSS) growth regained powerfully with 4Q FY21 SSS declining by only 4.9% (vs -34.8% in 3Q FY21). The company achieved its FY22 target of 65.5% gross margin in advance in 4Q FY21 as successful negotiations for lower rental rates contributed to EBITDA margins.
Based on a target Price-to-Sales (P/S) multiple of 6.0x FY23 operating revenue (~20% discount to Westlife), our price target of Rs 217 informs a BUY rating with a 43% upside.