Target: ₹790
CMP: ₹724.60
We recently hosted Westlife’s management, represented by executive director Akshay Jatia, for a roadshow in Singapore. Akshay spearheaded the digital journey at Westlife while launching and growing the McDelivery and On-The-Go channels. He played a crucial role in accelerating EOTF format and consolidating brand extensions like McCafé and McBreakfast.
Overall, we like Westlife’s strategy of: increased focus on meals (2.5x the market size of snacks); omni-channel strategy of increasing consumer experience across touchpoints (100 per cent stores to be EOTF, focused on own app and drive-thru); accelerated plans of network expansion (40-55 stores per annum vs 23-24 historically); and margin expansion to 18-20 per cent through product mix improvement, cost savings and operating leverage.
Westlife today is a result of great execution (a real turnaround compared to about eight years back). Westlife was not in the top-tier of a ‘great executor’ back then. The journey has been long and it’s all adding up now. Long-term benefits from expansion of India’s food service market remain intact.
Improved execution engine and potential for accelerated gain in market share (due to preference for hygiene) keep us positive.
Key downside risks include sustained weak consumer sentiment impacting restaurant throughput, and likely higher competitive intensity in the near term.