Shares of Westlife Foodworld Ltd., which operates McDonald’s chain of restaurants in the western and southern regions of India, gained on Friday after the company announced that it plans on adding 250-300 stores in the next 5 years.
The management also said that work on the next 200 stores has already commenced and that the long-term potential for total stores stands at 1,000.
The company is also planning to at least double the pace of store addition to 40-55 stores over this five-year period from the historical rate of 23-24 new stores per annum.
Westlife also envisions tripling its annual sales under its vision 2027 plans. It expects to achieve a sales figure between Rs 4,000 crore to Rs 4,500 crore from the Rs 1,576 crore figure it achieved in financial year 2022. The management expects revenue growth to be backed by high single-digit same store sales growth (SSSG).
On the operating margin front, it looks to achieve 18-20 percent EBITDA margin compared to the current 12.8 percent.
As there is no material change in numbers, brokerage firm Motilal Oswal has maintained its neutral rating on the stock given its fair valuations, scheduled increase in royalty rates to 2x from current levels and limited gross margin levers. It has a price target of Rs 805.
