Monday, July 19, 2021
The quick-service restaurants (QSR) are in a comfortable position to tap the growth in the Indian foodservice industry, with Covid acting as a strong tailwind, say analysts. While they expect Jubilant Foodworks, the master franchisee for Domino's Pizza in India, to be the most profitable and efficient of the lot, its expensive valuations at 177x FY21 P/E is a key concern. They, however, find more comfort in Burger King India amid expectations of swift expansion in topline and margins.
Some analysts expect Burger King India to rise as much as 117 percent in the next three years. They have a target price of Rs 365 per share, assuming 25x multiple.
"Burger King will enjoy an attractive opportunity for both topline and margin expansion, led by a big shift in its business model through the introduction of 'barbell' product strategy and BK Café. In addition, aggressive store network expansion and capped royalty rate will also be key drivers of EPS growth," say the experts.
