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EUR 88.49
For Business Accounts Only
BKI’s no. of restaurants have increased by 2.3x over FY17-3M20, while its revenue has grown even faster at 66% CAGR over FY17-19. Although BKI hasn’t managed to break-even, however, it has narrowed its losses to just 0.8% over 3M20.
Despite the lack of profitability, the fees that BKI pays to Burger King have progressively been increasing. Furthermore, it’s not clear how much more margins can improve as some of the expenses, like ad expenses, are already at their lowest possible. Furthermore, the share of revenue derived from using third-party delivery services appears to be rising rapidly. Should this trend continue, it might make BKI overly reliant on one of the two main delivery service providers in India.
Burger King India Pre-IPO - Has been growing fast and plans to grow even faster
Burger King India (BKI) plans to raise around US$150m via a mix of selling primary and secondary shares in India. BKI is the national master franchisee of the Burger King brand in India. As of Oct 2019, it operated 224 restaurants, including 8 sub-franchised restaurants, across 47 cities in India.BKI’s no. of restaurants have increased by 2.3x over FY17-3M20, while its revenue has grown even faster at 66% CAGR over FY17-19. Although BKI hasn’t managed to break-even, however, it has narrowed its losses to just 0.8% over 3M20.
Despite the lack of profitability, the fees that BKI pays to Burger King have progressively been increasing. Furthermore, it’s not clear how much more margins can improve as some of the expenses, like ad expenses, are already at their lowest possible. Furthermore, the share of revenue derived from using third-party delivery services appears to be rising rapidly. Should this trend continue, it might make BKI overly reliant on one of the two main delivery service providers in India.
Underlying
BURGER KING HOLDINGS INC
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
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Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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