Barbeque Nation Q4 Results Review - Improving Same-Store Sales Growth; Better Margin Delivery: Motilal Oswal

Motilal Oswal Report

Barbeque Nation Hospitality Ltd. delivered 6% revenue growth in Q4 FY24, led by the expansion in both dine-in and delivery services. The company delivered same-store sales growth of 1.4% YoY versus -2.6% in Q4 FY23 and -4.9% in Q3 FY24. Dine-in revenue was up 3%, while delivery revenue rose 19% YoY.

Gross margin was healthy at 68.9% (+310 bp YoY/100 bp QoQ) and supported the overall operating performance. Ebitda margin improved by over 410 bp YoY to 18.4%. The company posted PBT loss of Rs 9 million versus loss of Rs 125 million in Q4 FY23.

The management is looking to add 25-30 stores in FY25 and 100 stores over the next three years.

Barbeque Nation's current valuations at 18.7 times FY25E and 13.6 times FY26E pre-Ind AS enterprise value/Ebitda are comfortable. However, we are watchful of its operating margin profile in FY25 amid the challenging demand environment.

We reiterate our Neutral rating on the stock with a target price of Rs 600, based on 16 times FY26E Pre Ind-AS EV/Ebitda.

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