3 QSR Brands for a Delicious Portfolio!
The concept of Quick Service Restaurant or simply QSR is rapidly gaining popularity in India. The increasing trend of grabbing a quick snack due to time shortages or a proper meal with highly affordable prices has boosted the demand for QSR outlets.
Now, in the age of quick delivery services, all thanks to Zomato (NS: ZOMT ), Swiggy, etc., and the Covid-19-induced lockdowns out of the way, these restaurant chains are raking up higher revenues year-on-year. If you are bullish on the QSR trend in India, here are 3 stocks that you can have a look at.
Westlife Foodworld Limited
You might not have heard of Westlife Foodworld Ltd (BO: WEST ) (formerly, Westlife Development), but there’s absolutely no way that you haven’t heard of McDonald's. Well, Westlife Foodworld owns the master franchisee rights to run McDonald’s (NYSE: MCD ) in India and had 324 outlets in the country, as of FY22 closing. The company has a market capitalization of INR 11,502 crores and clocked a loss of a mere INR 1.67 crores in FY22, but a significantly better performance than the previous year’s loss of INR 99.42 crores.
Since the Covid-19 pandemic hit the shores, the entire restaurant space fell like a house of cards but Westlife Foodworld has rapidly caught up with the rising QSR trend. For the last 4 quarters, it has been net profitable, clocking a profit of INR 31.54 crores in Q2 FY23. This quarter’s profit alone is higher than the yearly profit of every profitable year since FY14, at least. Let that sink in!
Jubilant Foodworks Limited
Jubilant Foodworks Ltd (NS: JUBI ) owns the master franchisee rights for Domino’s Pizza in India, Bangladesh, Sri Lanka and Nepal and has a market capitalization of INR 36,397 crores. Apart from Domino’s Pizza, the company also runs franchises of Dunkin’ Donuts, Hong’s Kitchen, ChefBoss, Ekdum, and Popeyes.
It’s one of the very few profitable companies in this space, recording a net profit of INR 420.38 crores in FY22, the highest ever for the company. Although it is not trading very cheap, with a P/E ratio of 86.58, if you are looking for profitable QSRs, you barely have options and that’s why Jubliant Foodworks commands a high premium.
Devyani International Limited
Devyani International Ltd (NS: DEVY ) has a market capitalization of INR 22,455 crores and runs QSR brands’ outlets such as KFC, Pizza Hut, Costa Coffee, Vaango and the food street. However, one thing to note is that it is not the master franchisee and a listed peer Sapphire Foods India also runs the outlet of the first two brands mentioned above.
But, the reason for including Devyani International over Sapphire Foods is a relatively cheaper valuation, with the former trading at a P/E of 143.64 and the latter being at 182.01. After the pandemic, FY22 was the first year that the company returned to profits, reporting a net income of INR 156.33 crores which is a record-high income since FY14, at least. In fact, profit on a TTM basis is even higher, at INR 272.1 crores.
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Aayush sir your article are giving very clear and simple analysis.Like 1
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Thank you so much Atul :)Like
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started reading your analysis late but found them professionally very powerful in Simplicity Brevity and Clarity. Hardly any use of Complex Jargon technically sound analysis backed by good research and inherent risk well explained. Appreciate your Work Ayush ...Like 2
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exactly my thoughts... Aayush is absolutely brilliantLike 1
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That's so heart-warming, folks! Anything for my lovely readers :)Like
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Aayush you have a very simple yet powerful analysis, much appreciatedLike 2
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Thank you Capt. :)Like
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Aayush sir Monday will Gapup or Gapdown ?Like
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Don't know :)Like
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unda analysis ... as usualLike 2
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Shukriya :)Like 1
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Aayush, your view on Biocon, is this heading above 290 or again back to 250? Thanks!Like
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Not sure, but the short-term trend is positive, as long as the stock is trading above the lower trendline support.Like
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Right guidance at right time Aayush! This is what compels me to see and note important points from your every video. please keep it up congrats.Like 2
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Anything for my lovely readers :)Like
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Jubilant food is always good. Every body likes domino’s pizza.Like
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That Chicken Fiesta 😋Like
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