Amid long road to recovery, QSR stocks have an edge over multiplexes

Discretionary spending may take 15-20 months to reach FY20 levels; delivery-model and market share gains to support QSRs, while attracting footfall will be a challenge for multiplexes

Against the backdrop of the lockdown hurting discretionary demand and its consequent impact on consumer behaviour — moving away from dine-outs and crowded places, such as malls and cinema theatres, experts believe a recovery to the FY20 (pre-Covid-19) levels could take at least 15-20 months. However, within the discretionary space, too, expectations are that quick-service restaurants (QSRs) may see a faster recovery than multiplexes.

The Street, too, believes so, given the outperformance of QSR stocks, such as Jubilant FoodWorks and Westlife Development, vis-à-vis multiplexes like PVR and Inox Leisure, since the start of lockdown on March 25.

According to Madan Sabnavis, chief