Report
EUR 93.06
For Business Accounts Only
As of Jun 21, SFL operated 209 KFC restaurants in India and Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and Maldives and two Taco Bell restaurants in Sri Lanka. In total, it operated 311 restaurants in India, 63 in Sri Lanka and two in Maldives. In India, it has a non-exclusive right to operate KFC restaurants in ten states and Pizza Hut restaurants in eleven states. SFL has non-exclusive territory rights for KFC in five out of India’s top eight cities and for Pizza Hut in six out of India’s top eight cities.
SFL’s FY21 revenue was impacted owing to COVID-19, like its other peers but it has registered a strong bounce back in 1Q22. As compared to its main listed peers, Devyani International Limited, it is smaller in size in terms of number of stores and earnings. It also lagged Devyani on the margins front, as well.
In our view, it should trade at a discount to Devyani given its shorter operating history, smaller size and lower margins.
Sapphire Foods IPO
Sapphire Foods Limited (SFL), one of Yum Brand’s franchisee in the Indian subcontinent, aims to raise around US$280m via its Indian IPO. Its core business is to operate KFC, Pizza Hut and Taco Bell in the Indian subcontinent.As of Jun 21, SFL operated 209 KFC restaurants in India and Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and Maldives and two Taco Bell restaurants in Sri Lanka. In total, it operated 311 restaurants in India, 63 in Sri Lanka and two in Maldives. In India, it has a non-exclusive right to operate KFC restaurants in ten states and Pizza Hut restaurants in eleven states. SFL has non-exclusive territory rights for KFC in five out of India’s top eight cities and for Pizza Hut in six out of India’s top eight cities.
SFL’s FY21 revenue was impacted owing to COVID-19, like its other peers but it has registered a strong bounce back in 1Q22. As compared to its main listed peers, Devyani International Limited, it is smaller in size in terms of number of stores and earnings. It also lagged Devyani on the margins front, as well.
In our view, it should trade at a discount to Devyani given its shorter operating history, smaller size and lower margins.
Underlying
SAPPHIRE FOODS INDIA LTD
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.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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