POTENTIAL RISK – Restaurants active with Zomato have increased to 48 times the total branded QSR stores in FY24. This number was 22 times in FY19. “With more restaurants partnering with food delivery platforms, we think consumers now have more options, leading to fragmented sales. This is likely playing a part in the weakness in ADS of the QSR industry besides the general weakness in demand due to elevated inflation,” said Kunal Vora, Head of India Equity Research at BNP Paribas in a report.

GUIDANCE – The local out-of-home consumption in Thailand is eight to nine times a week. This is way higher than in India, where out-of-home consumption is once every 35-40 days, said the company’s management in its Q3 FY24 conference call. KFC is the market leader in Thailand with 1,000 stores, it added.

The newly acquired 283 KFC stores in Thailand albeit have lower EBITDA margins now at around 15 percent and Devyani expects to turn it around to the 20-22 percent which is seen in India, said Abraham. Considering the average Thai citizen eats out once a day, while the average Indian eats out once a month, the overall fried chicken market seems larger in the former, thereby boosting Devyani’s overall performance, said the analyst.

Though I have position in Salzer, I feel company is diworsifying for its size.

Unless I overlooked, there was no prior hint by the management on this new product line, how they are funding it, and how can it start commencement of first batch of smart meters just in a few months (Q1 FY25). Is it really that easy? If it is, why would established players not increase their capacity?

I wish them good luck but one needs to be careful beyond a point, especially in this heated market.

Hi Hitesh sir,

I would like to request you to please share your views on HBL Powers valuations. The scrip is trading at 50 + PE and has done very well for us investors. I feel the company can continue to do well with its various revenue streams in defence and railway sectors. But due to no concalls and no quarterly commentary from the management for investors, i wonder what’s the estimated FY25 or FY26 forward PE for HBL should be? It would be of great help if you could please share any insights here please.