20 Aug , 2021 By : Kanchan Joshi
After making a strong market debut last year in December and giving impressive returns within days of listing, Burger King India shares have lately been losing momentum. The stock of the fast-food chain has been an underperformer this year as it is down over 6% in 2021 (year-to-date) as compared to a 16% rise in benchmark Sensex. This month, shares of Burger King have plunged around 9%.
Though, brokerages seem to be bullish on the stock as they see recovery trends to continue. Motilal Oswal in a note said that despite dine-in restrictions due to the second Covid wave, Burger King delivered a strong 1QFY22 performance, led by the delivery channel. The recovery trends in July-August 21 continue to remain encouraging. The brokerage has maintained its 'Buy' rating with a target price of Rs210 per share.
Burger King India reported a sales growth of 289% YoY, however, plunged sequentially. The fast-food chain opened five stores whereas closed none. It has a total store count of 270 at the end of 1QFY22.
Another brokerage ICICI Securities also has a Buy rating on the stock as it sees multiple short-to-medium-term tailwinds and a good recovery play. Its target price is Rs200 per share. "We see multiple short-to-medium-term tailwinds: likely sharper revenue recovery (once consumption normalize) given the over indexation of mall stores, young store maturity provides operating leverage and addition of BK Café as incremental growth," ICICI said in a note.
However, it said that BKI may go-through a steep learning curve of expansion (and some potential failures) in tier-2/3/4 cities and potentially higher competitive intensity in north, east India could act as key risks.
Burger King, one of the Quick Service Restaurant (QSR) chains in India, is the domestic arm of US-based Burger King. Burger King India shares made their stock market debut on 14 December 2020 by listing at a strong premium of nearly doubling to Rs115 from its IPO issue price of Rs60 per share.
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