Westlife Foodworld shares soar 11% even as analysts flag demand concerns

Shares of Westlife Foodworld Ltd. rallied nearly 11 per cent on Thursday, even as analysts cut the target price of the stock after it reported an 85 per cent dip in its December quarter earnings for the current financial year (Q3-FY26). 

 

The company's stock rose as much as 10.9 per cent during the day to ₹528.9 per share, the steepest intraday gains since September 29 last year. The stock pared gains to trade 9.5 per cent higher at ₹521 apiece, compared to a 0.52 per cent decline in Nifty 50 as of 10:49 AM. 

 

Shares of the company rose to the highest level since January 8 this year and currently trade at 42 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 7 per cent this year, compared to a 2 per cent advance in the benchmark Nifty 50. Westlife Foodworld has a total market capitalisation of ₹8,143.77 crore. 

 

Westlife Foodworld Q3 results 

The company’s revenue rose 2.6 per cent to ₹671 crore in the December quarter, compared with ₹654 crore in the corresponding period last year. Ebitda increased 10.6 per cent year-on-year (Y-o-Y) to ₹97.5 crore from ₹88.1 crore, aided by margin expansion.

 

Ebitda margin improved to 14.5 per cent in the quarter from 13.5 per cent a year ago. However, net profit declined sharply by 85.4 per cent to ₹1 crore in the quarter, compared with ₹7 crore in the year-ago period.  FOLLOW STOCK MARKET UPDATES TODAY LIVE

Analysts take on Westlife Foodworld earnings

Antique Stock Broking maintained its 'Hold' rating on the stock, citing continued uncertainty in demand. The brokerage said management has guided for gross margins to remain stable at current levels, supported by supply-chain efficiencies and an improved product mix, including higher McCafe offtake, despite an increased focus on value offerings. 

 

It added that Q4 is positioned better, aided by improving momentum and progress in partnerships with food aggregators. Antique revised its target price downward to ₹524 from ₹560.

 

Motilal Oswal said it has largely retained its estimates for FY27 and FY28, even as demand remained under pressure in the third quarter, with same-store sales growth declining on a Y-o-Y basis.   ALSO READ | Devyani International shares extend surge after 'positive start' to CY26 

However, the brokerage noted that the positive momentum seen in December has extended into January, with same-store sales growth turning positive, driven by a mid-single-digit increase in footfalls. It cautioned that soft underlying growth and rising costs linked to strategic initiatives could weigh on operating margins. Motilal Oswal reiterated its 'Neutral' rating and cut the target price to ₹535.

 

JM Financial said a gradual improvement in demand could support faster margin expansion, led by cost-saving initiatives. However, it flagged that the recovery has been slower than expected, prompting a cut in its pre-Ind AS Ebitda estimates. As a result, the brokerage reduced its target price to ₹535 from ₹650.

 

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