Westlife Development nears record high; stock surges 9%

In past 10 trading sessions, the stock outpaced the market by surging 29 per cent, as compared to 5 per cent gain in the S&P BSE Sensex.

Shares of Westlife Development have rallied 9 per cent to Rs 444 in intra-day trade on the BSE in otherwise range-bound market on Thursday. The stock is trading close to its record high price of Rs 464, touched on May 8, 2018 in intra-day trade.

In the past 10 trading sessions, the stock outpaced the market by surging 29 per cent, as compared to 5 per cent gain in the S&P BSE Sensex. 

The firm -- master franchisee of McDonald's restaurants -- focuses on putting up and operating Quick Service Restaurants (QSR) in India through its subsidiary Hardcastle Restaurants.

During the October-December 2018 (Q3FY19) quarter, the company reported strong Same-Store Sales Growth (SSSG) of 14.5 per cent, making it the 14th consecutive quarter of positive sales growth. Revenue grew by 21.5 per cent to Rs 371 crore while net profit surged to Rs 13.66 crore, up by a whopping 76 per cent from last year, same quarter. Operating ebitda (earnings before interest, taxation, depreciation, and ammortisation) margins expanded by 113 basis points to 9.8 per cent.

Going forward, the management is confident of maintaining momentum and improving all round business performance.

Rajat Vohra, an analyst at Asit C Mehta Investment Intermediates believes that QSR industry in India has huge potential given the current tailwinds. Apart from industry tailwinds, constant innovation in menu, smart brand extensions and competitive price has made McDonalds’ one of the most popular brand in the country and the same is expected to continue.

“We expect the company to post revenue growth of 18 per cent over FY18-21E, driven largely healthy growth in SSG complemented by growth in McCafe and McDelivery. We expect the Company to open close to 50 new stores (from 292 currently to 342 stores by FY21) and further believe that company’s cost reduction platform ROP (Restaurant Operating Platform) 2.0 is likely to aid margins expansion,” the brokerage firm said in initiate coverage on the stock with ‘accumulate’ rating. The stock was, however, trading above the target price of Rs 401 per share.

At 01:52 pm, Westlife Development was quoting 8 per cent higher at Rs 442 on the BSE. In comparison, the S&P BSE Sensex was trading flat at 37,745 points. The trading volumes on the counter jumped three-fold with 189,000 shares changed hands so far; against an average sub 59,000 shares were traded daily in past two weeks, the exchange data show