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Burger King

Discussion in 'Investment Analysis' started by manickarajan, Oct 26, 2021.

  1. manickarajan

    manickarajan Responder

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    Low ROCE ,negative PAT margin and low interest coverage ratio..whether it's passing our investment checklist?? IMG_20211026_055739.jpeg
     
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  2. shabbir

    shabbir Administrator Staff Member

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    Good comparison but the number of stores being opened by Burger king is not in the figures. What Jubilant did earlier is what Burger king is trying to do.

    They will open 700 stores from currently 250ish odd till 2025 and westlife will open 500 from 300 odd.
     
    Last edited: Oct 26, 2021
    muraleekaushik likes this.
  3. muraleekaushik

    muraleekaushik Member

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    What is west life?
     
  4. shabbir

    shabbir Administrator Staff Member

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  5. muraleekaushik

    muraleekaushik Member

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    Thanks Mr. Shabbir
     
  6. laveshdixit

    laveshdixit Responder

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    Why shouldn't we be looking into Devyani (KFC, Pizza Hut, Costa, Vaango) instead of Burger King?

    1. As on September 30, 2021, we operated 309 KFC stores, 351 Pizza Hut stores and 45 Costa Coffee stores in India. Our total system store count across all our
    operations stands at 803.
    2. Healthy EBITDA margins at 23.9% for the quarter.
    3. PAT at Rs. 466 million
    Reference - http://dil-rjcorp.com/wp-content/uploads/2021/08/DIL-Investor-Presenation-Q2-FY-2022_compressed.pdf

    What are the key reasons why you prefer BG @shabbir

    Regards
    Lavesh
     
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  7. shabbir

    shabbir Administrator Staff Member

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    @laveshdixit that is a very good question and I prefer BK because of the following reasons.
    • Growth of past three years for Devyani is 6.02% 18.01% 15.70% whereas for BK it is 64.44% 67.34% 32.95%. Management is much more aggressive to growth because they are late entrant and are trying for high growth engines.
    • Devyani is not a unique play. Saphire foods and others also operate the same stores. Jubilant is but then it is well established and I like to invest in a new QSR which is growing faster.
    I like to take a higher amount of risk here because of high growth. It all depends on your risk appetite. I have high appetite for QSR.
     
  8. laveshdixit

    laveshdixit Responder

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    @shabbir , happened to revisit this post again. I did build positions in Devyani and Jubilant Foodworks after discussions here, and I am continuing to do so.
    As risk is much higher in BK, I have a small position in that too. Risk to reward is higher in BK.
    I will have 2:2:1 positions in Devyani, Jubilant FW and BK as I want to keep it distributed in QSR industry.
     
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  9. shabbir

    shabbir Administrator Staff Member

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    Perfect. One shouldn't take unnecessary risk and one should avoid BK if it is too much of risk to your portfolio for sure.
     
    laveshdixit likes this.