Burger King India makes stellar opening on bourses

Burger King India Ltd (BKIL) is one of the fastest growinginternational QSR chains in India which got positive response on its IPO

International quick service restaurant chain Burger KingIndia ltd (BKIL) began its journey on Indian bourses with a stupendous openinggarnering a premium of over 92 per cent on the first day of trade on Monday.

Against the issue price of Rs 60, Burger King stock openedat Rs 115.35 on BSE, while on the National Stock Exchange, shares made a debutat Rs 112.50, a premium of over 87 per cent over the IPO price.

At 1 p.m., the stock was trading at Rs 134.49 over 124 percent higher than the issue price on BSE.

The performance of the stock had even defied projectionsmade by analysts who had expected Burger King to list at around 70-75 percentpremium over issue price.

"Such listing was in line with our expectation as thecompany issue was priced at a significant discount compared to listed peerssuch as Jubilant FoodWorks (Domino's Pizza) and Westlife Development(McDonald). Short term investors can book profit. We advise long term investorsto stay invested in the company as there is ample scope available for thecompany to increase its business in India," Keshav Lahoti, AssociateEquity Analyst, Angel Broking Ltd said.

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"Even after such bumper listing, there is no issue withthe valuation of the company. In the future, we expect the company to gainmarket share by opening more stores compared to the competitors. As the storecount will increase, operating leverage will kick in and the company will beable to report profit and it will lead re-rating of the multiple for thestock," he added.

BKIL enjoys exclusive National Master Franchisee Rights inIndia till December 31, 2039, with an obligation to develop and open at least700 restaurants by December 2026. It is one of the fastest growing QSR chainIndia with 268 restaurants spread across 17 states/UTs and 57 cities. It hasalready garnered 5 per cent market share in India's Rs 34,800 crore QSR market.

According to Motilal Oswal Financial Services, Over FY18-20,BKIL's Revenue/EBITDA grew at a CAGR of 49 per cent/258 per cent led by 2x thestore strength. However, it continues to make losses at PAT level. The samestore sales growth stood at 12.2 prt cent/29.2 per cent in FY18/FY19 while itsurprisingly became flat in FY20. In 1HFY21, revenue declined 68 per cent YoY,while it made losses at EBITDA and PAT levels due to the Covid-19 impact.

(Source: IANS)