Broking Firm Initiates Buy On Midcap Stock, Sees 17% Upside, Hit 52-Week High, Jumps 9.19% In 1 Week

Nirmal Bang initiates coverage on stock of Westlife Foodworld Ltd. (WFL) (Formally known as Westlife Development Ltd.) with a positive outlook. The brokerage recommends Buy on the stock with a target price of Rs. 985 apiece. The brokerage claims a potential upside of up to 17% from its current market price, considering the stock's target price.

WFL is Restaurant & QSR sector firm. It is a midcap stock with a market capitalisation of Rs. 13,128.27 crore.

Outperformance likely to continue

Nirmal Bang said, "We recently hosted Mr. Saurabh Bhudolia, CFO and Mr. Chintan Jajal, Lead IR, Westlife Foodworld (WFL) to get an overall business update."

Key highlights from the conference: (1) High density of highway stores and value proposition offered by the company have been a bulwark for WFL in the current uncertain environment, leading to better performance compared to peers. (2) While the unorganized market in Food Services has gained back some share post the covid shock, the value proposition offered by the McDonald's brand has served WFL well to curb this impact relative to others. (3) Incremental expansion in South India and Tier-2 cities with the Chicken offering has led to narrowing of AUV between the West and the South markets. (4) Outlook on the cost front is now better compared to the preceding quarters. WFL is not planning any price hikes currently but lower end of the average 3-5% price increase could happen in FY24 if required. (5) The company expects the beverage part of the business (McCafe) to see significant growth in future."

Buy for a Target Price of Rs. 985/share

The broekrage said, "The stock is now trading at ~33x/28x FY24E/FY25E Pre-Ind AS EBITDA. We assign a multiple of 33x on March'25 EBITDA (Pre Ind-AS) and arrive at a target price (TP) of Rs985. WFL has been our top pick in the Consumer Discretionary space and has yielded relatively healthy returns, backed by strong financial performance on a consistent basis. We continue to have a positive view on WFL over the medium term and maintain our BUY recommendation on the stock."

Stock Outlook - Current Market Price & Returns

On NSE, the last traded share price of the stock is Rs. 841.90/share, up 0.87% from its previous close. It hit the fresh 52-week high today i.e. June 07, 2023, at Rs. 866.70/share. While the 52 week low of the stock is Rs. 435.65/share recorded on 22 June 2022.

The stock jumps 9.19% in the past 1 week. It gave 9.44% positive return in 1 month and 25.92% in 3 months, respectively. It gave 81.33% positive return in the past 1 year. It gave 173.21% positive return in the past 3 years and 135.46% in 5 years, respectively.

Disclaimer - The stock has been picked from the brokerage report of Nirmal Bang. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.