Revenue growth for fiscal 2023-24 is expected to be seen between 18 to 25 percent and margin expansion will be similar to previous fiscals in FY24, said Westlife Foodworld's Vice Chairman Amit Jatia while speaking to CNBC-TV18. "Will see margin at a new high next year with expansion of 100-150 basis points," he said.
Mcdonald's India franchisee Westlife Foodworld has reported a broadly in-line operating performance, supported by 14 percent same store sales growth (SSSG) and 10 percent store adds. While the operating performance was robust, a slight miss in revenue and EBITDA resulted in an 11 percent miss in PAT.
Jatia further said that the company has added as many as 35 new restaurants in FY23, and it plans to add 40 to 45 more new restaurants in FY24. "Incremental restaurants will be added in smaller towns," he added.
According to analysts, the management anticipates a high single-digit SSSG and plans to add 40-45 new restaurants in FY24, with a target to reach 580–630 new restaurants by 2027.
Also, in the third quarter, Westlife converted 17 restaurants (to 220, 72 percent of total) to EOTF (experience of the future) format. In the next 24 months, 100 percent stores are likely to be converted to EOTF model.
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.
The current or guided retail expansion rate at 12 percent on an existing base is healthy. The journey of an execution-driven outperformance continues to add up for Westlife.
Brokerage Motilal oswal has reiterated its 'Neutral' rating on the stock with a target price of Rs 800. Meanwhile, ICICI Securities maintains its 'Add' recommendation on the stock with a revised target price of Rs 850 from Rs 790 earlier.
Westlife Foodworld has an average broker target of Rs 838.67 per share, implying a potential upside of 9 percent from the current market levels, according to data from Trendlyne.
Shares of Westlife Foodworld Ltd were trading 0.27 percent lower at Rs 766.25 apiece in Wednesday's trade. The stock rose 9 percent in the last one month, while it fell 1 percent on a year-to-date basis.
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