Buy Restaurant Brands Asia; target of Rs 150: Sharekhan
Sharekhan is bullish on Restaurant Brands Asia has recommended buy rating on the stock with a target price of Rs 150 in its research report dated August 08, 2023.
Sharekhan’s research report on Restaurant Brands Asia
Restaurant Brand Asia (RBA) posted mixed performance in Q1FY24 with revenues growing by 25% y-o-y to Rs. 610.8 crore, while EBIDTA margins expanded by 193 bps y-o-y to 7.3% (lower than our expectation 10.1%); Loss stood at Rs. 54 crore in Q1FY2024. Management has maintained guidance of 10% SSSG for FY2024 and 8% SSSG for FY2025; it targets 67% gross margins in FY2024 for the India business. Indonesia business to break-even in FY2024; Popeyes to lead the growth in medium term along with consistent improvement in the burger business in the Indonesian market.
Outlook
The stock currently trades at 26x/19x its FY2024E/FY2025E EV/EBIDTA. With favourable risk-reward, we maintain Buy rating on the stock with an unchanged price target (PT) of Rs. 150.
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