The share of Restaurant Brands Asia ie RBA (earlier Burger King) is at an attractive valuation compared to Pierce. Good returns are expected in the future.
Best Stock to Buy Below rs 100: The IPO of Restaurant Brands Asia ie RBA (earlier name Burger King), a well-known company selling burgers, has proved to be a profitable deal for investors. Listed in the name of Burger King in the year 2020, this stock has given 65 percent return to the investors compared to the issue price. Although it is trading at a significant discount from its record high. Brokerage house Motilal Oswal is bullish on the stock. The brokerage says that RBA is a dominant QSR player in India. The business of the company has returned to normal after recovering from the challenges of COVID 19. Further, the upside potential of around 55 percent is visible in this stock.
Expect good growth in margins
Brokerage house Motilal Oswal has given investment advice giving a target of Rs 150 for the stock. The stock closed at Rs 97 on March 29. In this sense, it is expected to give 55 percent return in the future. The brokerage house says that post COVID 19 recovery is being seen in the business of the company. The company’s average daily sales per store has been Rs 114000 in 3QFY22. This is higher than the FY20 level of Rs 110000. 50 to 55 percent of the company’s stores are in metro cities or shopping malls. There is a recovery in the business of the company, but when the footfall will be completely normal in the future, the business will accelerate further. Due to which good growth is expected in the margin of the company.
Share valuation attractive
RBA launched the first BK Cafe in India in 3QFY22. The company had 18 BK cafes as of the end of the quarter. The company has given a guidance to open 75 BK cafes in the country by March 2023, which seems to be being completed. This will further improve the gross margin and EBITDA margin of the company. The company’s India business is strong. The company is also doing better in Indonesia. Sales growth is in double digits. The valuation of the company is also attractive in comparison to Pierce.
Network of 294 stores in the country
The company was listed in India on 14 December 2020 as Burger King. The company had kept the price band of Rs 60 under the IPO. Whereas it was listed in the stock market at Rs 115. On listing day, it closed at Rs 138 with a premium of 131 per cent. Presently the share is at Rs 97, i.e. the share is still at 65 per cent premium to the issue price. The company has a network of 294 stores in the country by the end of 3QFY22. 9/65 stores are under construction or in the pipeline. The company has a target of opening a total of 320 stores in March 2022. The company’s products are popular among youth as well as people of all ages.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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