Khambatta Securities has given Buy recommendation for Burger King India with a target price of Rs. 217 in its research report issued on Nov 18, 2021

Khambatta Securities’ research report on Burger King India

Burger King India Limited (BKIL) witnessed good growth in its Revenues during the quarter. Revenue from operations stood at ₹ 245.4 crores (up ~154% y-o-y and 64% q-o-q). Ease in Covid restrictions led to increase in dine-in sales. The Dine-in: Delivery sales mix for the quarter was 47:53 as compared to 28:72 in the previous quarter. The Average daily sales (ADS) recovered by 165% and 65% for Delivery and Dine-in businesses respectively in 2QFY22. On a Pan India basis the ADS recovery for October 21 (on FY20 baseline) has been 101%. The region wise ADS recovery for 2QFY22 is 90%, 97% and 103% for North, West and South East respectively. The ADS recovery has been least in the Northern region as majority of the stores are at the Metro stations, where restrictions are not lifted completely. BKIL added 4 stores during the quarter, with the current store count standing at 274. The management is optimistic to deliver a total of 320 stores by FY22. EBITDA jumped significantly from ₹ 0.3 crores in 2QFY21 to ₹ 25.6 crores in 2QFY22 while the margins grew by ~1000 bps to 10.4%.


Based on our target Price-to-sales (P/S) multiple of 6x FY23E operating Revenue, We maintain our previous target price of ₹ 217, informing a BUY rating with a 40% upside.

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