Updates based on a couple more results
Devyani
Price is trading around previous peak post listing. A close above 200 with volumes on the weekly should take this higher. The results were quite strong with 100% topline growth YoY and bottomline from a loss of 29 Cr to 74 Cr. 70 new stores added during the quarter taking the total to 1000+ stores. KFC ADS at all time high, above pre-pandemic levels at 1.27 Cr. Also nice is the 30% SSSG in Pizza Hut. These small format delivery focused stores are firing really well. P/E dropped from 114 to 85 levels post results. The runway here is long and hopefully they can continue to execute like they have done with Varun Beverages
Manyavar
The breakout on the weekly last week is showing signs of continuation this week. 105% topline growth and a strong 123% bottomline growth with strong EBITDA margins of 51%. Store expansion as well is on track as they have expanded from 1.1 million sft to 1.28 million sft in the last few months. Here again the strong performance drops the P/E from 102 to 86 levels despite the big runup pre-results. The TAM here is huge
and unlike tech startups talking of TAM, here its actually meaningful in the hands of a business model with strong moats and a capable management. How they scale Mohey, Manthan and Twamev will tell us if their success with Manyavar is replicable.
Domestic consumption, especially discretionary consumption continues to remains strong across businesses here from VBL, Metro to Devyani and Manyavar. IDFC First’s retail loan book growth also points to the same. The wage hikes across IT are entering the economy through these discretionary spends and will very likely continue to remain strong across the festive season till end of year at least I think. So far signs are pointing to the same (1 lakh scorpio-n bookings in 30 mins for eg.). Margins should improve as well going forward with easing inflation. Let’s see.
Disc: Have positions in Devyani around 155 and Manyavar around 1100.
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