Westlife Foodworld Ltd. share price target

Westlife continues to deliver good performance on all key metrics. SSSG-driven revenue outperformance (14% 4Y CAGR vs 5% 4Y CAGR retail expansion) is impressive and is likely to be one of the top performance in QSR sector.

Store additions accelerate; margin robust

We recently hosted Westlife’s management, represented by executive director Akshay Jatia, for a roadshow in Singapore. Akshay spearheaded the digital journey at Westlife while launching and growing the McDelivery and On-The-Go channels.

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.