Westlife Foodworld Q2 Results Review - Subdued Performance; Maintain 'Sell': Dolat Capital

Dolat Capital Report

Westlife Foodworld Ltd.’s Q2 FY25 profitability came below our estimate. The company reported 0.5% YoY revenue growth with 6.5% same-store sales growth decline in Q2 FY25 on a base of 1.0% growth.

On-Premise business de-grew 2.0% YoY, while off-Premise business grew 5.0% YoY in Q2. Further, average annualized sales per store decreased by 10% on trailing twelve months basis and stood at Rs 60 million.

We downward revise our FY25/26E Ebitda by 9.6/8.1% to factor in significant fall in SSSG and lower operating leverage in H1 FY25E.

While we believe that demand will improve in H2 FY25E supported by favorable base and demand revamp, these positives are already factored in the current market price.

Valuing the stock at 24 times FY27E enterprise value/Ebitda, we arrive at a target price of Rs 748 (earlier Rs 747). Maintain ‘Sell’ rating.

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