Westlife Foodworld Ltd. share price target

We attended supply chain familiarisation event conducted by WESTLIFE and met with the top management of Vista Processed Foods Pvt Ltd (produces frozen products for McDonald’s; McD) and Radhakrishna Foodland (distributes key raw materials required at McD stores). We were impressed by the high-quality and hi- tech-focused capabilities of both the companies to handle backend support for WESTLIFE.

Recommendation With a 27% upside potenital from the CMP, we maintain a BUY rating on the stock.

Westlife Foodworld (Westlife) continues to outperform on execution. It had a good
performance in 3Q on all key metrics with 20% SSSG (on a stable base), highest- ever operating margin and store throughput. Relative success in the meal menu (with launch of big mac and gourmet burgers), rise in the availability of McCafe within restaurants (84% stores now have McCafe) and upgrade in existing stores to EOTF format (70% stores now have EOTF model) helped it (1) drive higher customer footfalls, (2) higher average check/bill-value (more customers per bill). We expect this to be one of the top performances in QSR sector in Q3FY23.

We maintain our BUY rating on the stock with a unchanged TP of Rs 930/share (30x Sep24E EV/EBITDA), implying an upside of 29% from the CMP.

Strategy Day: Vision 2027 filled with delicacies

Westlife’s Strategy day provided visibility towards long-term growth drivers of store throughput (AUVM), network expansion and margins. It aspires to increase store throughput to ~Rs90-100mn (implied store throughput in CY27 is ~Rs70mn which is slightly higher than current Rs63mn) though it did not provide a guidance.
on that unlike last meet.