Neutral Westlife Foodworld; target of Rs 600: Motilal Oswal

Moneycontrol • 6 days ago

Original source

Key Investment Pillars

  • Strong same-store sales growth (SSSG) of 10.1% YoY, driven by the everyday value platform, indicating traffic-led recovery.
  • Broad-based growth across channels, with on-premise sales growing 17% YoY and off-premise sales increasing 15% YoY.
  • Operating leverage and cost optimization are expected to drive margin expansion, with management guiding for 100-150bp annual improvement in pre-Ind AS EBITDA margin.
  • Store network expansion, with a target of 580+ restaurants by March 2028, is expected to improve overall store unit economics.

Thesis Validation Checklist

  • Monitor same-store sales growth momentum, particularly in the festive season, to assess the sustainability of the traffic-led recovery.
  • Track the company's ability to maintain its gross margin and operating leverage in the face of ongoing inflationary pressures.
  • Watch for the successful execution of the store expansion plan and its impact on overall store unit economics.
  • Assess the company's progress in improving its digital presence and the contribution of digital sales to overall revenue.