CORPORATE VALUATION & RESTRUCTURING

Submitted by:

Dashika Kartikey Vij Khushboo Agarwal Mohd. Suheb Alam Upanshu Mahawar
PGP39074 PGP39192 PGP39193 PGP39196 PGP39219
1
 Executive Summary

Recommendation: SELL We recommend a SELL rating for Westlife Foodworld. The stock’s current value
appears to be high relative to its earning potential. There has been a decline in
Target Price (as per DCF) 675.03 profitability of Westlife in FY24 owing to accelerated store expansion leading to
Target Price (relative valuation) 594.17 higher overheads on new stores. Sales were impacted by sustained poor
Current Price (16 th Aug 2024) 805.7
sentiments in some geographies (70-80 stores) led by weaker consumer
demand and external issues (Geopolitical/cheese issues).
No of Shares (Mn) 156
However, the long term growth drivers of Westlife Foodworld remains. These
Dividend Yield (%) 0.43
are – 1) Scaling up fast-growing categories, 2) Leveraging omnichannel strategy,
MCap (₹ Cr) 12,563.78 3) Increasing store opening guidance to 580-630 stores in CY27, and 4)
52W High 1,024.95
Improving operating margins to 18-20% by Dec’27. 5) focus on loyalty programs
– for 1st year, management is trying to make repository of customer data and
52W Low 708.95 will try to leverage it once decent database is ready. Moreover, the long-term
prospects of the overall QSR industry remain bright on account of favorable
trends such as formalization, rising disposable income, and eating-out culture.
Key Ratios This will further aid in the company’s growth. There were more than 30m
FY23 FY24 cumulative app downloads, and there was a 12% YoY rise in monthly active
users. Westlife Foodworld now has a total of 397 restaurants, including 81
PROFITABILITY (%)
Drive-throughs, 360 McCafés, and 292 Experience of the Future (EOTF)
EBIT Margin 9.1 6.4 restaurants.
RoE 29.4 19.9
Same Store Sales (SSSG) for FY23 declined to 36% from 58% however the Guest
RoCE 22.2 16.1 count growth was positive, signaling market share gains. Overall Eating out
VALUATION
trends remained broadly stable on a sequential basis.
P/E (x) 97.5 129.9

EV/EBITDA (x) 45.0 50.2

FCF/EV (%) 0.6 0.44

Same Store Sales Growth (%)

FY23 36.00%
FY22 58.00%
-24.40% FY21
FY20 4.00%
FY19 17.00%
FY18 15.80%

Key Financials
Values in INR Mn FY20 FY21 FY22 FY23 FY24 FY25E FY26E FY27E FY28E FY29E FY30E FY31E FY32E FY33E FY34E

Op. revenues 15,608 10,303 16,042 22,985 24,103 30,213 37,748 46,421 54,130 62,332 70,737 78,358 85,640 93,455 101,838

Growth (%) 10.2% (34.0%) 55.7% 43.3% 4.9% 25.3% 24.9% 23.0% 16.6% 15.2% 13.5% 10.8% 9.3% 9.1% 9.0%

EBITDA 2,270 912 2,170 3,944 3,878 4,952 6,702 8,831 11,024 13,410 15,695 17,746 19,694 21,803 24,082

EV/EBITDA (x) 60.4x 150.2x 63.2x 34.8x 35.4x 27.7x 20.5x 15.5x 12.4x 10.2x 8.7x 7.7x 7.0x 6.3x 5.7x

PBT 78.5 (1,329.2) (20.7) 1,494.5 958.4 1,692.9 2,635.7 3,894.6 5,477.0 7,480.8 9,330.9 10,895.1 12,306.1 13,826.8 15,467.0

Stores 319.0 305.0 326.0 357.0 397.0 460.0 523.0 586.0 614.0 642.0 670.0 698.0 726.0 754.0 782.0

Yearly Rev / 50.0 31.3 49.3 66.2 62.8 66.0 72.9 80.2 88.0 95.7 102.9 109.3 114.8 120.5 126.5
Store

Sources: Company reports & presentations, analyst reports, team analysis 2

Company Overview
Westlife Foodworld Limited (WFL), formerly known as Westlife Development Limited (WDL), focuses on setting up
and operating Quick Service Restaurants (QSR) in India through its subsidiary Hardcastle Restaurants Private
Limited. (HRPL). The Company operates a chain of McDonald’s restaurants in West and South India, enjoying a
master franchisee relationship with McDonald’s Corporation USA, through the latter’s Indian subsidiary.
Footprint: In Telangana, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Kerala, Chhattisgarh, Andhra Pradesh, Goa,
and portions of Madhya Pradesh and Union Territory of Puducherry, Westlife owned and operated 357 restaurants
and 311 McCafes during the fiscal year FY 22–23. 11,596 workers were employed by the company, which served
more than 200 million clients annually. It has positioned itself as a one-stop shop and easily accessible brand.
Channels: To improve its omni-channel accessibility and convenience, Westlife has expanded its service offering to
include dine-in, drive-thru, takeout, on-the-go, and McDelivery (online ordering via the app and website).

Store count Positioning

FY23 357
Westlife continues to hold a respectable presence in the Indian QSR market. The
following factors make the company well-positioned to profit from the changing
FY22 326
food-tech landscape:
• Brand: McDonald's, a company known for its history, accessibility,
FY21 305 affordability, exceptional quality, visibility, and reliability, is a brand that
Westlife greatly benefits from.
FY20 319
• Menu innovation: Westlife is a worldwide brand that has successfully
adapted to regional preferences and blended in with the local way of life.

Employee base • Omni-channel network: Whether a consumer is dining in a restaurant, placing

an online order, or making a drive-through transaction, Westlife's
FY23 11596
comprehensive omni-channel approach aims to deliver a seamless
experience. Westlife aims to provide a consistent brand experience through
FY22 10000
the integration of its digital and physical platforms. This covers using the
McDelivery app for online ordering, as well as using digital menu boards, on-
FY21 7883
the-go, self-ordering kiosks (SOK) at restaurants, and even table service.
• Footprint: Westlife's reach goes beyond major cities to include tier-II and tier-
FY20 9908 III cities in both West and South India, the two most developed and
economically active parts of the country.
Unique business model catering to various market segments
Gross revenues (in INR Mn)

FY23 22782

FY22 15765

FY21 9860

FY20 15478

Net profit (in INR Mn)

FY23 1116
Three strategic focus areas
-17 FY22
MEALS OMNI-CHANNEL NETWORK EXPANSION
Achieve market leadership in Integrate various channels and Penetrate unserved
-994 FY21
core day parts through brand touchpoints to a One geographies and fortify
relevance led by menu McDonald’s platform in order existing markets with renewed
FY20 366 innovation and marketing to provide consumers a aggression
seamless experience
Sources: Company reports & presentations, analyst reports, team analysis 3
ESG

Environment Social Governance

Energy efficiency Employee well being Board Structure

Westlife has implemented energy- It has been seen that Westlife Reports show that the board
saving initiatives, including LED prioritizes employee health and comprises a mix of independent and
lighting, energy-efficient kitchen safety by maintaining high standards executive directors hinting focus on
equipment, and automation systems in its workplace practices and balanced decision-making and strong
in over 309 restaurants. offering wellness programs. corporate governance.
Sustainable Packaging Community Engagement Sustainability Reporting
In the recent past, Westlife has Initiatives regarding skill CO2 emissions are recorded at
focused on promoting eco-friendly development programs and 59,786 metric tonnes, showcasing a
packaging through some initiatives supporting local suppliers hints decrease from the previous year’s
like using paper straws and towards “contributing to the 54,183 metric tonnes.
biodegradable packaging communities it serves”
Waste Management Customer Safety Ethical Practices
It has saved 213,000,000 liters of After the country moved out of Westlife follows stringent ethical
water through conservation Pandemic, it focused on Enhancing policies. Emissions intensity has
initiatives like waste segregation and safety protocols post-pandemic, been reduced to 3.38 tons of CO2e
recycling programs at its outlets, implementing contactless services per million rupees from 4.24 tons in
especially for kitchen waste and strict hygiene standards comparison to the prior year.

Key Risks and Mitigants

Risks Mitigants
Optimisation of pricing strategy by implementing menu modifications based
Inflationary risk- As it is price sensitive sector Inflation
on research results. The supply chain is optimised by efficient vendor facilities
resulting in higher prices for finished products can
and commissaries, while real estate costs are handled efficiently through long-
impact consumer demand and the visibility of a brand.
term contracts.

Environmental risk- Disposable packaging may

Westlife uses Forest Stewardship Council (FSC)-certified paper for packaging
contribute to increased waste and environmental
applications
congestion.
Regulatory and compliance risk- Failure to comply
The company's management solutions guarantee that all functions and units
with laws and regulations may lead to fines and
are kept well-informed about existing and forthcoming requirements.
criticism
Geography risk- Focussing exclusively on a specific
Westlife's network has gone through significant growth during the previous 5
geographical area may lead to an oversupply of
years, particularly in smaller towns
opportunities in that region while ignorance to others

Technology risk- Outdated technologies could have a Westlife invested funds towards the adoption of digital technologies in order
negative impact on productivity to improve the overall customer experience

Food safety risk- Consuming unhygienic or low-quality Westlife implements the Daily Product Safety Checklist (DPSC) three times a
meals may significantly affect customer's satisfaction day in restaurants to protect food freshness and safety

Human capital risk- The lack of ability to attract and

Westlife puts a high priority on recruiting competent individuals and
retain talented individuals have a negative effect on
facilitating their professional growth
company's growth

Finance & Liquidity risk- Engaging in Balance Sheet Westlife has a strong balance sheet and liquidity, while also supporting the
stretching could impact liquidity growth of its stores

Sources: Company reports & presentations, analyst reports, team analysis 4

Indian QSR Market
Over the past few decades, there have been significant developments to the QSR industry in India. Global giants
like Pizza Hut, Domino's, and McDonald's joined the market in the 1990s. Numerous more QSR competitors joined
the market in the 2000s, but many of them were unsuccessful. QSR chains began to expand deeper into tier 1 and
tier 2 cities, as well as into rural areas, in the 2010s. As a result, there was more competition, which drove some
brands out of business.
Some companies, like Domino's, KFC, and Pizza Hut, have, nevertheless, been able to successfully adjust to the
shifting market dynamics. Numerous international companies still have a chance to break into the Indian QSR
industry, particularly in the chicken category. In India, there are various operating models used in the QSR industry,
such as company owned, franchisee, and joint venture. The most widely used model is the franchisee model.

Timeline of QSR chains starting in India Evolving Indian market

450+
INR bn, value of the Indian online food
service market in 2022
1996 2012 _______________________________

1995 2001 2014

800
Mn, Indians with access to the internet
_______________________________
1200
Mn, Indians likely to access to the
internet in the near future
Stages of QSR in India
Phase I (1991-2001) Phase II (2001-2010) Phase III (2010 Onwards)
Penetration in newer segments
High focus on Metro & Mini Thin Penetration in Tier I & II
Market and increased penetration in
Metros Cities
Tier I & II cities
Ownership/ Franchise Model & Continuation with franchisee Emphasis on contracts more
Model
Management contracts model & JV’s centered around revenue sharing
Expansions under brands &
Partnerships/ JVs with related
Funded by personal capital & emergence of new
Funding business interest, Initiation of PE
conventional means brands/concept. PE driving
funding
expansion
Customer engagement, format
New Opportunity areas with
Customer acquisition, sustainable diversification & product
Customer Focus on CRM, Expansion &
revenue growth enhancement, investment on
extended capacity building
digital and technology

Brands and its formats

Multiple Franchise Master Franchise Micro Franchise

Joint Venture

Sources: Company reports & presentations, analyst reports, team analysis 5

Industry Analysis
Porter Five Forces Analysis
Competitive Rivalry (High): The Indian QSR industry is characterized by intense competition due to:
• Large number of players: The industry is fragmented with a multitude of both international and domestic
players.
• Aggressive expansion: Players are aggressively expanding their footprint to capture market share.
• Product differentiation: Companies constantly innovate and introduce new products to attract customers.
• Price wars: Competitive pricing strategies are common to gain market share.

Threat of New Entrants (Low to Medium): While the initial investment required to set up a QSR outlet is relatively
low compared to other sectors, several factors deter new entrants:
• Brand loyalty: Established players like McDonald's, KFC, and Domino's enjoy strong brand recognition and
customer loyalty.
• Supply chain and logistics: Building an efficient supply chain and logistics network is challenging, especially in a
vast country like India.
• Real estate costs: Finding suitable locations with high footfall can be expensive.
• Regulatory environment: The food and hygiene regulations are stringent, requiring significant compliance
efforts.

Threat of Substitute Products (High): The Indian QSR industry faces intense competition from substitute products,
including:
• Unorganized food sector: Local eateries, street food vendors, and home-cooked meals offer cheaper and often
culturally relevant alternatives.
• Organized food delivery platforms: Services like Swiggy and Zomato have expanded the food delivery options,
increasing competition.
• Changing consumer preferences: Growing health consciousness and demand for diverse cuisines can shift
consumer preferences towards healthier and more exotic options.

Bargaining power of supplier (Low to Medium): Suppliers in the Indian QSR industry, such as food producers,
packaging material suppliers, and equipment manufacturers, generally have limited bargaining power due to:
• Multiple suppliers: The QSR industry has a diversified supplier base, reducing dependence on any single supplier.
• Standardized products: Many inputs are standardized commodities, limiting supplier differentiation.
• Large volume purchases: QSR giants often purchase in bulk, giving them leverage in negotiations.

Bargaining power of Buyer (Medium): Customers in Indian QSR industry have moderate bargaining power due to:
• Price sensitivity: A significant portion of customer base is price-conscious, especially in tier-II and tier-III cities.
• Multiple options: With a plethora of QSR options available, customers have the luxury to switch brands based on
price, taste, and convenience.
• Growing health consciousness: Increasing awareness about healthy eating habits can influence customer
preferences and bargaining power.

Overall Industry Attractiveness

The Indian QSR industry presents a mixed picture. The large and growing consumer base, rising disposable
incomes, and increasing urbanization offer significant growth opportunities whereas intense competition, changing
consumer preferences, and the threat of substitutes pose challenges.

Sources: Company reports & presentations, analyst reports, team analysis 6

 Industry Analysis
Industry Classification
The QSR industry in India is part of the broader food services sector, which includes various types of restaurants,
cafes, fast food joints, and other food establishments. Within the QSR segment, the industry can be further
classified as follows:
1.Fast Food Chains:
• These are the prominent national and international QSR brands with a large number of outlets across
India.
• Example - McDonald's, Burger King, KFC, Subway, Domino's Pizza, Pizza Hut, etc.
2.Casual Dining Chains:
• These QSR chains offer a slightly more upscale dining experience compared to fast food outlets.
• Examples - Café Coffee Day, Costa Coffee, Starbucks, etc.
3.Regional/Local QSR Brands:
• These QSR chains have a strong presence in specific regions or cities within India.
• Examples - Jumboking (Maharashtra), Bikanervala (North India), etc.
4.Standalone QSR Outlets:
• These QSRs are independent, single-location QSR establishments that are not part of any major chain.
They often cater to local preferences and offer a more specialized menu.

The QSR industry in India has seen significant growth in recent years, driven by factors like rising urbanization,
increasing disposable incomes, and changing consumer preferences towards convenience and on-the-go dining
options. The industry is highly competitive, with both domestic and international players vying for a larger market
share.

Competitive Landscape in India

Franchisee based Franchisee based Franchisee based Franchisee based

Business Model Own + Franchisee Own + Franchisee Joint Venture
model model model model

Number of
1540 520 771 628 225 90 212
Outlets

Average rev/
2.5 cr 3 cr 2 cr 1.5 cr 2 cr 1.8 cr 2.2 cr
outlet (INR)

Average ticket
500-550 300-400 400-450 250-300 400-500 350-400 400-500
value (INR)

COGS 25-30% 34-36% 36-40% 25-30% 38-42% 36-40% 28-32%

Gross Margins 70-75% 64-66% 60-64% 70-75% 58-62% 60-64% 68-72%

Advertisements 3-5% 4-6% 5-7% 2-4% 4-6% 3-5% 2-3%

Royalty 5-7% 6-8% 6-8% 8-10% 5-7% 6-8% 3-5%

Store EBITDA 18-22% 16-20% 15-19% 20-24% 14-18% 16-20% 22-26%

Capex per outlet 100-150 L 150-200 L 120-180 L 80-120 L 140-200 L 160-220 L 200-250 L

Average store size

1000-1500 2500-3500 1500-2500 800-1200 2000-3000 2200-3000 2000-3000
(in sq. ft.)

Average sales/
0.60-0.80 L 0.8-1.0 L 0.5-0.7 L 0.4-0.6 L 0.6-0.8 L 0.55-0.75 L 0.7-0.9 L
day (INR)

Sources: Company reports & presentations, analyst reports, team analysis 7

Industry Dynamics
Growth Drivers
• Population growth: With a population of 141.7 Cr at the end of 2022, India overtook China to become the
world's most populous nation in 2023.
• Demographic shift: The average age of Indians in 2022 was 28.7 years. The majority of people in India are under
25 years old. The millennial generation (ages 15 to 34) dominates the consumer market since they are more
digitally savvy, accustomed to eating out or ordering in, and adventurous with their food, which makes them a
perfect fit for the QSR concept.
• Increasing income of the middle class: From 432 million (31% of the population) in FY 20–21 to 715 million
(47% of the population) in FY 30-31, the middle class is predicted to grow. This implies that by 2030, India's
economy will have gained roughly 140 million middle-class households.
• Traction in food services sector: By 2025, 1 Cr people are projected to be employed in this sector.
• Popularity of food delivery and take-away: The population's busy lifestyle has greatly aided in the expansion of
these businesses. At a CAGR of 17% between 2022 and 2027, the online meal delivery industry is projected to
reach a value of over Rs. 990 Mn by the end of 2027.
• Outside of major cities: Well-known food technology companies are currently operating in more than 500
Indian cities and are growing quickly. Well-known delivery services have branched out into tier 3 cities and
formed partnerships with nearby hotels and restaurants to offer meal delivery services.
• Menu localization: By adding regional flavors to their menu, the Indian QSR sector has transformed the QSR
format. Indian food ranks sixth in the world's favorite cuisines, supporting the concept of "glocalization" in
menu items.

Risks and Concerns

• Economic risk: Pressures from inflation may impact consumer demand
• Supply-chain risk: Unexpected delays in transportation could degrade the quality of food
• Technical risk: Technical issues could lower the quality of the service
• Inflation risk: Higher inflation could lead to higher raw material prices
• Competition risk: Entry of food franchises with international backing could increase competition
• Market risk: Entering new markets does not always yield the expected outcomes
• Regulatory risk: Operations may be impacted by changes to governmental rules

FY19 FY20 FY21 FY22 FY23 FY24E FY25E Food inflation rate in India
Store expansion 10%
Jubilant 1,265 1,370 1,406 1,621 1,870 2,137 2,439 9%
8%
Devyani 533 575 655 892 1,184 1,373 1,592 7%
6%
Sapphire 311 361 365 495 655 775 895
5%
Westlife 296 319 305 326 357 397 447 4%
3%
Total 2,405 2,625 2,731 3,334 4,066 4,682 5,373 2%
Store addition (#) 1%
0%
Jubilant 105 36 215 249 267 302
Devyani 42 80 237 292 189 219
Sapphire 50 4 130 160 120 120
Rev. of Indian online food delivery mkt. (in USD Bn)
Westlife 23 -14 21 31 40 50
90
Total 220 106 603 732 616 691 80
Revenue in bn USD

Store growth (%) 70

60
Jubilant 8% 3% 15% 15% 14% 14% 50
Devyani 8% 14% 36% 33% 16% 16% 40
30
Sapphire 16% 1% 36% 32% 18% 15%
20
Westlife 8% -4% 7% 10% 11% 13% 10
*Projected values
Total 9% 4% 22% 22% 15% 15% 0

Sources: Company reports & presentations, analyst reports, team analysis 8

Decision Rationale
FY24 4Q results – below expectation
TTM Average Sales Per Store (in INR Mn)
4QFY24 results were below expectations owing to accelerated store
expansion (added 17 stores during 4QFY24) and weak SSSG. SSS
declined 5% YoY courtesy weak macros, intense competition, recent
controversy related to the quality of cheese, and boycott of
McDonald’s brand by certain communities on account of ongoing
geopolitical issues. Off-premises channel (43% of sales) grew 8% YoY
owing to an intense focus on driving digital initiatives clubbed with a
focus on loyalty programme. Dine-in sales (57% of sales) declined
2% YoY during 4QFY24 on account of customers downgrading to
value meals/certain offers, which are available for walk-in
customers.
Store-opening guidance
Op. EBITDA Margin (in %) Westlife Foodworld intends to open 45-50 stores during FY25 and
majority of the store addition will be in South India. However, the
growth can likely stagnate due to concentration of outlets in South
India. Aggressive store expansion could also strain operational
efficiency, leading to potential challenges in maintaining service
quality and customer satisfaction.
Increase in royalty rates
Royalty rates after FY26 not yet negotiated and they have already
planned to increase by 1% between 2022-2024
Price hike not expected
As of now no price hikes are expected since it recently increased its
prices but Westlife Foodworld usually takes hike of 3%-5% every
Cash PAT Margin (in %) year. Additionally, this is a price sensitive market with intense
competition so price hike might not be a good option.
Declining restaurant op. margin and op. EBITDA margin
Restaurant operating margins and Operating EBITDA margin were
lower by 510 bps YoY and 280 bps YoY respectively on largely
account of operating deleverage and marketing spends
Emerging Competition
Emerging players in the market are intensifying competition, which
could impact Westlife's market share and profitability. As rivals
expand their footprints and innovate, Westlife may face challenges
Revenue (in INR Mn) in maintaining its growth trajectory, particularly in key markets
where it operates McDonald's outlets.
Economic Uncertainty
Macroeconomic factors, such as inflation and changing consumer
spending patterns, may negatively impact discretionary spending on
dining out, affecting revenue growth.

Though the fundamentals of this company are strong

however the recent performance has been below the
mark. Therefore, we recommend to SELL this stock.

Sources: Company reports & presentations, analyst reports, team analysis 9

Assumptions

Revenue Growth
• We have used a top-down approach to forecast revenue growth. We have forecasted the revenue based on the
store expansion plan as mentioned by top management. In next 4 years Westlife is planning to expand stores by
1.5X (400-600).
• After forecasting the stores, we have grown the revenue per store at nominal GDP growth to arrive at the total
revenue for Westlife. We believe Westlife will be able to maintain its market share in the QSR space due to
strong innovation and tech capabilities and hence have used that in our assumptions. Overall we get a 15.22%
revenue growth
Margins
• During pandemic, due to issues in supply chain and low average order value, profit margins of Westlife fell
drastically. After covid was over, price hikes were passed and it has been recovering YoY basis.
Capex
• Due to the goal of store expansion from 400 to 600, capital expenditure is high in immediate years and stabilises
over the period of time.
Working Capital Changes
• Westlife operates mostly on negative working capital, as per its financials the trade payables are always high,
decreasing working capital.
• While forecasting Inventory days, Trade payable days & trade receivable days are calculated as per average of
previous years.
Discount rate
• We have used CAPM to calculate the cost of equity. We have regressed the returns to find our Beta. This is used
on a market premium. We have taken the current risk-free rate of 7%.
• For our terminal rates, we have used a real rate plus inflation assumption to find the terminal growth rate. The
terminal discount rate which we have taken has a lower risk-free rate which we believe is in line with developed
markets.
Lease liability
• Lease liability is estimated in proportion to number of stores (increasing with store expansion).
WACC %
Valuation Terminal Value Risk Free Rate 7.0%
PV of NTM unlevered FCF 19,363 Beta 0.5
Terminal
Discount Rate 12.3% Market Return 18.2%
Value 68,778
Perpetuity Growth Rate 4.0% Cost of Equity 13.0%
PV of
Interim Terminal Value 232,849
FCF 49,982 Pre-tax cost of
TV/LTM EBITDA 8.8
Total debt 8.5%
Enterprise Discounted Terminal Value 68,778 Tax rate 25.2%
Value 118,760
Cost of Debt 6.4%
Net Debt 12,104
Equity Sensitivity
WACC 12.3%
Value 106,656
Discount Rate
Value per
Share ₹ 683.97 $684 16.0% 15.0% 12.0% 11.0% 10.0%

Current LT 6.0% 445.2 516.3 878.4 1,098.5 1,430.7

Price ₹ 801.55 Growth 5.0% 421.4 484.5 788.5 960.2 1,202.5
% 4.0% 401.6 458.5 721.0 861.3 1,050.3
Upside/(D
ownside) 3.0% 384.8 436.8 668.5 787.2 941.6
to FMV (14.7%)
2.0% 370.5 418.4 626.6 729.6 860.1

Sources: Company reports & presentations, analyst reports, team analysis

Appendix

Focus Charts and Tables

INDIAN FOODSERVICE MARKET
Organised,
MV of Indian food service industry (in US Dollars) Unorganised, 69%
31%
*Projected values 125.06
QSR, 10% Burger,
Western 23%
Fast Food,
79.65 49% Chicken, 66% of the
69.8 market
26%
FSR +
41.10 Cafes, 90% Desserts,
17%
Indian Fast
Food, 51%
Other, 34%

2022 2023 2028* 2029*

Note: Data as of 2022

Avg order value of QSR in India (in US Dollars)

3%
*Projected values 4.88 IEO
10%
4.6
4.35
4.11 3%
3.89 Unorganised
3.68 9%
3.1 3.29 3.46
2.88 5%
Organised
12%

7%
QSR
13%

11%
WFF
15%

2020 2021 2022 2023 2024* 2025* 2026* 2027* 2028* 2029* Note: Data as of 2022
Last 5y CAGR Next 5y CAGR

WESTLIFE FOODWORLD
Operating EBITDA (in %) Restaurant Op. Margin (in %) Free Cash Flow (in INR Mn)

FY23 17.30% FY23 23.20% FY23 795

FY22 13.10% FY22 19.10% FY22 707

-0.20% FY21 FY21 7.70% FY21 801

FY20 9.70% FY20 14.60% FY20 737

ROE (in %) Shareholding Pattern and Group Structure

Public & Others,
FY23 19.70% 9.13%

-0.40% FY22 FPIs, 11.60%

-20.70% FY21

Promoter, 56.28%
FY20 4.40%
FIs & Local MFs,
23.01%

Sources: Company reports & presentations, analyst reports, team analysis 11

Appendix

Peer Analysis
3Y Revenue NTM EBIT
Company Name NTM EV/EBITDA LTM EV/EBITDA 3Y EBITDA CAGR ROIC
CAGR Margins
Westlife Foodworld Ltd 31.0x 59.5x 17.4% 54.1% 6.1% 8.4%
Sapphire Foods India Ltd 18.8x 24.3x 17.9% 25.6% - 7.1%
Jubilant Foodworks Ltd 26.9x 37.9x 9.5% 6.9% 43.1% 13.0%
Devyani International Ltd 24.4x 34.3x 23.8% 20.2% 17.5% 8.8%

Domino's Pizza Enterprises Ltd 10.4x 12.4x 16.7% 6.8% 20.1% 9.4%

Restaurant Brands International LP - - 0.0% 0.0% - -

Haidilao International Holding Ltd 6.6x 7.2x 15.4% 17.8% 10.5% 14.2%

Skylark Holdings Co Ltd 8.2x 7.5x (4.0%) (6.2%) - -

Create Restaurants Holdings Inc - 12.2x 0.5% 12.4% - -

TORIDOLL Holdings Corp 9.3x 10.7x 6.1% 4.7% - -

McDonald's Holdings Company
12.5x 12.8x 4.0% 5.5% - -
Japan Ltd
Zensho Holdings Co Ltd 12.3x 13.1x 7.5% 18.5% - -
Alsea SAB de CV 5.4x 5.5x 22.4% 27.8% 8.2% 11.6%
Jollibee Foods Corp 8.8x 10.1x 13.2% 30.6% - 6.2%
Central Plaza Hotel PCL 10.2x 12.1x 3.2% 12.3% 1.8% 12.6%
Americana Restaurants
10.5x 12.8x 10.5% 12.5% - 11.7%
International PLC
Compass Group PLC 12.6x 12.5x 13.5% 15.8% 22.7% 7.3%
Greggs PLC 9.3x 10.2x 24.0% 28.0% 29.2% 9.6%
Domino's Pizza Group PLC 10.4x 12.2x 14.3% 6.2% 21.6% 17.6%
Mitchells & Butlers PLC 7.3x 7.9x 9.2% 3.1% 3.8% 11.5%
Chipotle Mexican Grill Inc 28.6x 33.6x 21.2% 44.9% 20.3% 17.4%
Wingstop Inc 48.6x 69.0x 28.8% 32.5% - 27.6%
Aramark 10.3x 10.8x 9.7% 3.6% 6.0% 5.5%
Brinker International Inc 7.5x 8.6x 10.2% 4.4% 54.8% 6.6%
Wendy's Co 11.5x 11.9x 10.6% 11.6% 8.3% 17.1%
McDonald's Corp 15.8x 17.3x 10.9% 12.6% 19.4% 46.5%
Yum China Holdings Inc 6.5x 7.3x 12.0% 8.8% 9.4% 10.3%
Darden Restaurants Inc 10.1x 10.8x 13.7% 26.5% 41.7% 12.2%
Domino's Pizza Inc 19.2x 20.9x 8.6% 9.0% 63.6% 18.6%
Krispy Kreme Inc 10.4x 15.3x 17.8% 13.3% - 5.3%
Dutch Bros Inc 27.0x 42.1x 46.4% 0.0% - 8.6%
Cheesecake Factory Inc 7.3x 8.3x 16.2% 37.8% - 5.2%
Yum! Brands Inc 17.1x 19.0x 9.8% 11.1% 59.8% 33.4%
Starbucks Corp 12.3x 13.8x 14.7% 23.4% 20.1% 16.3%

Papa John's International Inc 9.5x 9.6x 9.2% 39.8% - 7.3%

Restaurant Brands International Inc 12.2x 15.4x 13.1% 5.1% 13.9% 29.7%

Sweetgreen Inc 89.7x - 25.5% 0.0% - (8.9%)

Texas Roadhouse Inc 15.1x 18.1x 22.5% 37.8% - 9.5%
Shake Shack Inc 21.6x 33.7x 25.0% 41.0% - 3.1%

Sources: Company reports & presentations, analyst reports, team analysis 12